Browse content similar to 02/11/2011. Check below for episodes and series from the same categories and more!
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follows UNESCO's decision to award Palestine full membership. | :00:06. | :00:16. | |
:00:16. | :00:19. | ||
Time for World Business Report. Welcome to the programme. The | :00:19. | :00:24. | |
headlines: Place your bets. Emergency talks under way in Cannes | :00:24. | :00:32. | |
in a be in to save the euro deal. At Europe sneezes, fears that the | :00:33. | :00:42. | |
:00:43. | :00:51. | ||
US could catch a cold. -- as. | :00:51. | :00:55. | |
One newspaper calls it Greek roulette. In his gamble to save his | :00:56. | :01:00. | |
own political credibility, the Greek Prime Minister's decision has | :01:01. | :01:06. | |
plunged and the entire eurozone back into crisis. George Papandreou | :01:06. | :01:13. | |
will meet his French and German counterpart later today. Other | :01:13. | :01:19. | |
signatories to last week's deal are also scrambling to hold it together. | :01:19. | :01:23. | |
International banks represented by the Institute of International | :01:23. | :01:28. | |
Finance had agreed to forgo 50% of the money owed to them by Greece. | :01:28. | :01:33. | |
They had hoped that the right of would avoid a default on the entire | :01:33. | :01:42. | |
debt owed it to private lenders. Ealing with this problem is like -- | :01:42. | :01:47. | |
dealing with this problem is like getting on to a roller-coaster. | :01:47. | :01:52. | |
There are sharp, unexpected terms and then you start to settle down | :01:52. | :01:55. | |
again. We remain focused on this deal and we are engaged in | :01:56. | :02:01. | |
technical discussions with our partners in Greek and the EU about | :02:01. | :02:05. | |
how the deal may be fleshed out. We look forward to doing that because | :02:05. | :02:09. | |
this is an historic opportunity for Greece to put aside a substantial | :02:09. | :02:19. | |
:02:19. | :02:22. | ||
burden of debt. We are joined by the former Greek | :02:22. | :02:32. | |
finance minister and an assistant professor in business. | :02:32. | :02:37. | |
First of all, can you give us your reaction when you first heard that | :02:38. | :02:44. | |
George Papandreou was calling for a referendum? I thought and still | :02:44. | :02:48. | |
believed that this was an irresponsible and reckless decision | :02:48. | :02:54. | |
that introduces massive uncertainty in an already uncertain environment. | :02:54. | :03:02. | |
I do not support his decision. will happen between now and if a | :03:02. | :03:07. | |
referendum were to take place? Some are saying that the government will | :03:07. | :03:10. | |
be voted out anyway and there will therefore not be a referendum in | :03:10. | :03:16. | |
the end. This is possible but what will probably happen will be a | :03:17. | :03:23. | |
severe slowdown in the way that Greece approaches its problems. | :03:23. | :03:28. | |
They have already been slow and they will become slower now. If you | :03:28. | :03:32. | |
asked me what I believe will happen, there will be an increase in the | :03:32. | :03:38. | |
deficit within the next few months until we reach a referendum. This | :03:38. | :03:43. | |
is all counter-productive and I think it is simply wrong. It should | :03:43. | :03:49. | |
not be happening. What impact has this had on the | :03:49. | :03:55. | |
perception of Greece from now on in? Obviously, deals have been done | :03:55. | :04:00. | |
and China has been seen as a possible helping hand. What impact | :04:00. | :04:06. | |
has this decision had? This is truly a disastrous decision and no | :04:06. | :04:11. | |
matter what the outcome of the referendum will be, all the | :04:11. | :04:14. | |
disciplines in the market for stakeholders like China are going | :04:14. | :04:21. | |
to be wondering in the future about the credibility of the Greek side | :04:21. | :04:27. | |
of any kind of a deal. We are looking at a sovereign debt problem. | :04:27. | :04:32. | |
Everything is negotiable at any point in time. This is not a | :04:32. | :04:37. | |
company that can close down and sell off their assets. Greece must | :04:37. | :04:42. | |
participate. The deal that was struck said that in 2020, the Greek | :04:42. | :04:52. | |
GDP level would be 120 % -- the great debt compared to GDP level | :04:52. | :05:01. | |
would be 120 %. Basically, we do not know what is going to happen | :05:01. | :05:06. | |
for example with the Greek government in 2013 and 2015. Will | :05:06. | :05:11. | |
they be sticking with this or not? Basically, people will be | :05:11. | :05:14. | |
questioning from now on the credibility of any kind of | :05:14. | :05:20. | |
arrangement on Greek debt with Greece participating. | :05:21. | :05:26. | |
From the point of view of the situation within Greece, do you | :05:26. | :05:29. | |
believe that George Papandreou is hoping that the referendum will | :05:29. | :05:34. | |
bring the citizens of Greece on board? Obviously it depends on the | :05:34. | :05:39. | |
questions in the referendum itself, but do you think this is his | :05:39. | :05:47. | |
intention? We still do not know what a | :05:47. | :05:52. | |
question of the referendum will be and if there will be any | :05:52. | :05:57. | |
implications of that question. But my supposed would be that the Greek | :05:57. | :06:02. | |
people are very much against George Papandreou and that puts the | :06:02. | :06:08. | |
referendum in danger and increases uncertainty. I cannot predict with | :06:08. | :06:12. | |
certainty how he Greek people will handle this. If you ask people if | :06:13. | :06:18. | |
they want to stay even the euro or leave the euro, most would say that | :06:18. | :06:22. | |
they want to stay in the euro but that has nothing to do with the | :06:22. | :06:32. | |
:06:32. | :06:33. | ||
specific question of debt. This is a dangerous situation because the | :06:33. | :06:39. | |
hatred against the government could influence the decision of the | :06:39. | :06:45. | |
referendum. The next few days are critical. The G20 Summit in Cannes | :06:45. | :06:50. | |
and an George Papandreou's meeting with Angela Merkel and Nicolas | :06:50. | :06:58. | |
Sarkozy tonight. At this stage, from the European side, Angela | :06:58. | :07:03. | |
Merkel and Nicolas Sarkozy need a deal very quickly. They want to | :07:03. | :07:11. | |
stop the further deterioration of Western banks. I doubt that there | :07:11. | :07:13. | |
will be any more concessions to Greece because the process of | :07:13. | :07:18. | |
granting the current deal was very painful. Slovakia did not have | :07:18. | :07:24. | |
voted it in on the first occasion, for example. He would require all | :07:25. | :07:29. | |
the eurozone countries to participate in such a deal. Second, | :07:29. | :07:39. | |
:07:39. | :07:41. | ||
the magical number of one and then 20% -- 120 %... Even assuming that | :07:41. | :07:46. | |
this were to take place on a one- time bassist... We have tea leave | :07:46. | :07:56. | |
:07:56. | :07:59. | ||
it there for now. Thank you for joining us. | :07:59. | :08:08. | |
And how are the markets digest in all of this today in Asia? -- di | :08:08. | :08:11. | |
jesting. This is quite his situation we are in, right now, | :08:12. | :08:19. | |
isn't it? Naturally, Asian investors have continued to react | :08:19. | :08:25. | |
to the referendum. Essentially, we have seen a third day of decline. | :08:25. | :08:33. | |
The Japanese yen has strengthened against the euro, which is bad news | :08:33. | :08:40. | |
for export rely it countries. And it was not just Asian investors | :08:40. | :08:44. | |
reacting, but we also had some comments from the Japanese finance | :08:44. | :08:49. | |
minister, who said that people do not understand Greece's decision to | :08:49. | :08:54. | |
hold a referendum. Nonetheless, it was not all entirely about Europe. | :08:55. | :08:59. | |
There are other concerns about the US and American manufacturing, | :08:59. | :09:08. | |
which grew more slowly in October. Many companies are making steep | :09:08. | :09:18. | |
:09:18. | :09:21. | ||
losses. Banking shares have also been hit. HSBC has fallen in the | :09:21. | :09:31. | |
:09:31. | :09:33. | ||
region. Thank you. | :09:33. | :09:38. | |
Is could plunge the entire eurozone reason -- region into recession and | :09:38. | :09:42. | |
there is a fear of contagion. On Wednesday, the US Federal Reserve | :09:42. | :09:49. | |
will announce its thinking. Violent demonstrations on the | :09:49. | :09:53. | |
streets of Greece. But the EU's dire financial problems are not | :09:53. | :09:58. | |
just a concern for Europeans. The turbulence is being closely watched | :09:58. | :10:04. | |
by America's central bank. Ben Bernanke has said that eurozone | :10:04. | :10:11. | |
crisis does impact the US economy. Marc Chandler explains why. What | :10:11. | :10:16. | |
happens in Europe affects the US, just as how what happens in the US | :10:16. | :10:26. | |
affects the EU. The economy in the EU is so fragile that the debt | :10:26. | :10:31. | |
crisis has the potential to paralyse the economy. And it is not | :10:31. | :10:37. | |
just Greece. There are problems in the UK as well. From high | :10:37. | :10:41. | |
unemployment to a stagnant housing market, which is stifling the US | :10:41. | :10:44. | |
economy. Even with a record low mortgage rates, many households | :10:44. | :10:49. | |
have been unable to borrow or remortgage. The Obama | :10:49. | :10:53. | |
administration has a new plan to help homeowners through finance but | :10:53. | :10:57. | |
the Federal Bank is under pressure to keep intervening, especially | :10:57. | :11:04. | |
given the political deadlock in Washington DC. This increases the | :11:04. | :11:07. | |
urgency for the gradual reserve to do more rather than less. Even | :11:07. | :11:11. | |
though there are dissenters, the majority in the Federal Reserve | :11:11. | :11:16. | |
feels that they would rather try to fail and a tie at all. The Federal | :11:16. | :11:20. |