:00:05. > :00:15.Those are the latest headlines. It is now time for the latest from
:00:15. > :00:17.
:00:17. > :00:27.the G20 in Cannes. A warm welcome to World Business
:00:27. > :00:29.
:00:30. > :00:33.Report. Eurozone leaders have cut off a
:00:33. > :00:38.pavement to Greece until the country decides on the future of
:00:38. > :00:41.its membership of the single currency.
:00:41. > :00:45.It is Mario Draghi's first meeting at the helm of the European Central
:00:45. > :00:51.Bank. He hits the ground running as the eurozone rescue plan threatens
:00:51. > :00:55.to unravel. Asian stocks, currencies and
:00:55. > :01:05.commodities retreat as the Greek bail out package has been put on
:01:05. > :01:08.
:01:08. > :01:12.hold. It is a pivotal moment for Europe,
:01:12. > :01:16.a summit that was supposed to present to the world a solution to
:01:16. > :01:20.the eurozone crisis is now thrown into disarray as leaders are forced
:01:20. > :01:24.to admit the possibility that Greece may have to leave the single
:01:24. > :01:31.currency. Everything hangs on a referendum in Greece early next
:01:31. > :01:41.month. We are going live to Cannes. We are there with the very latest.
:01:41. > :01:45.Angela Merkel and Nicolas Sarkozy are talking tough last night.
:01:45. > :01:52.They were dealt a very difficult hand, this referendum, which as we
:01:52. > :01:55.understand it, they did not anticipate as taking place. It
:01:55. > :02:01.becomes impossible for the Greek Prime Minister to retract that
:02:01. > :02:06.promise. They imposed three stings on him. They said that he had to do
:02:06. > :02:09.it quickly, right at the beginning of December, we are going to
:02:09. > :02:14.withhold any payments until we have a result of that referendum, and in
:02:14. > :02:18.addition to that, this is a question that you will ask, you
:02:18. > :02:23.would not be talking about the bail out package, you will be asking the
:02:23. > :02:28.Greek people if they want to or not remain in the eurozone. The
:02:28. > :02:33.prospect of more' and depending on the answer before and after the
:02:33. > :02:39.referendum is very large. And the prospect of contagion is becoming
:02:39. > :02:46.more real. Berlusconi arrives today in Cannes. He himself had a crisis
:02:46. > :02:50.meeting with his Cabinet last night. Yes indeed. Italy is a very good
:02:50. > :02:55.example of exactly how Greece could affect the rest of the eurozone. We
:02:55. > :03:03.have seen the value of Italian bonds plummet. A great deal of
:03:03. > :03:08.speculation about Italy's future. It also has budgetary problems. The
:03:08. > :03:13.problem is the amount of debt that is out there. French banks are
:03:13. > :03:20.exposed to 40 billion euros. When it comes to Italian debt, it is
:03:20. > :03:25.about 200 bn. We have come on the yields on those bombs, -- on those
:03:25. > :03:30.bonds, it is very high at the moment. It exacerbates the problem
:03:30. > :03:34.for Italy. Berlusconi is arriving today, and I imagine he will be the
:03:35. > :03:39.target of some pretty tough talking as well. President Hu Jintao of
:03:39. > :03:43.China is there as well. He was seen as perhaps the saviour of the
:03:43. > :03:49.eurozone, but they are holding back and watching what was it -- what is
:03:49. > :03:54.going to happen. Absolutely. It is impossible for China to make a
:03:54. > :03:58.decision how and if it would come to the aid of the eurozone, for
:03:58. > :04:03.example, by buying eurobonds, because the uncertainty is too
:04:04. > :04:08.great. If Greece were to exit the eurozone, how would it do that.
:04:08. > :04:13.Will it then default on its debt? It would be a fairly this orderly
:04:13. > :04:17.process. But the ramifications on other countries, which are seen as
:04:17. > :04:22.being weak, and within the eurozone, especially those which have already
:04:22. > :04:32.received a bail out, of which Italy is not one, will also come under
:04:32. > :04:41.pressure. The risk is too great, says China, to step in. It is not
:04:41. > :04:45.impressed. We will see through the morning
:04:45. > :04:51.throughout the BBC. She will keep us up to date with what is
:04:51. > :04:57.happening at the G20. How are the markets digest in all
:04:57. > :05:04.of this? I would imagine that investors are on edge. And they are
:05:04. > :05:10.very much on edge. Not a good day for Asian investors. Stocks,
:05:10. > :05:17.currencies, commodities are all in negative territory. It is because
:05:17. > :05:19.the Greek bail out package has been put on hold by France and Germany.
:05:19. > :05:25.All the stock markets are retreating for a fourth straight
:05:25. > :05:29.day. No reaction from the Japanese market as they are closed for a
:05:29. > :05:37.national holiday. Most sectors are declining across the board,
:05:37. > :05:47.financials, technology, commodity stocks. Emerging currencies are
:05:47. > :05:57.
:05:57. > :06:02.also at the declining. Oil prices are declining a wet -- as well.
:06:02. > :06:12.They are tracking the downbeat settlement in risky assets. --
:06:12. > :06:18.sentiment. Does the eurozone had a back-up plan if the Greeks turn
:06:18. > :06:23.their back on it? It will be what they have. Rather than continuing
:06:23. > :06:29.to support Greece with funds, they will probably have some support
:06:29. > :06:33.from the IMF, assuming what end a situation in shoes, the Greeks can
:06:33. > :06:38.put together an agreement with the IMF, not necessarily with the
:06:38. > :06:43.Europeans. The only thing that will come from that that is different to
:06:43. > :06:52.what we have now, the major one, is that they will go back to having a
:06:52. > :06:57.drachma. Instead of dying by 1,000 cuts, you can suddenly lower your
:06:57. > :07:07.costs, because you will be in drachma. But there will be massive
:07:07. > :07:13.
:07:13. > :07:17.defaults. Let's have a look at other news. As
:07:17. > :07:21.well as events in Cannes, Global investors will be looking to
:07:21. > :07:25.Frankfurt as the European Central Bank holds its first meeting under
:07:25. > :07:29.the leadership of President Mario Draghi. The ECB has been
:07:29. > :07:34.instrumental in keeping borrowing costs under control for highly
:07:34. > :07:40.indebted nations such as Spain. Markets will be looking for any
:07:40. > :07:45.clues as to whether it will wrap up this policy. With a new man in
:07:45. > :07:51.charge, they may need to learn a whole new language.
:07:51. > :07:56.It is essential that the recent rise in inflation... when the
:07:56. > :08:03.former boss made a pronouncement, economists stood by to decide up
:08:03. > :08:09.its own -- his special code words. Strong vigilance was an even
:08:09. > :08:18.clearer signal. Strong vigilance is warranted with a view to containing
:08:18. > :08:24.outside risks... accordingly, strong vigilance is... they are
:08:24. > :08:29.very alert to this particular kind of language. This will be in
:08:29. > :08:32.immediate reaction that they were going to put up rates next month.
:08:32. > :08:39.What will be the code words employed by the new man in
:08:39. > :08:45.Fringford, Italy's Mario Draghi? Mario Draghi will be thinking about
:08:45. > :08:49.rate cuts. For example, the phrase, downside risk, might mean a cut in
:08:49. > :08:54.December, whereas the phrase, if confirmed, would mean a cut in
:08:54. > :09:00.January. You have to listen very carefully to what he is saying,
:09:00. > :09:06.especially because he is new. Things might mean different things
:09:06. > :09:10.personally to him. He may use words differently. When Alan Greenspan
:09:10. > :09:14.was passed at the Federal Reserve, it said a heavy briefcase were
:09:14. > :09:19.shadow a rate change. It is important for markets not to be
:09:19. > :09:25.given surprises, so for central banks to give out a big hints
:09:25. > :09:30.without commitment. This is how the American markets
:09:30. > :09:36.did yesterday. They had a better session than the previous day. It
:09:36. > :09:39.is a roller-coaster ride. We saw some gains yesterday. Ben Bernanke
:09:39. > :09:47.indicated that more budgetary stimulus will be needed for the US