:00:02. > :00:12.an some stagey for the first time. Those are the latest headlines from
:00:12. > :00:19.
:00:19. > :00:22.Thanks for joining us on World Business Report. The stock market
:00:22. > :00:32.sell-off continues amid growing signs of stress in the banking
:00:32. > :00:35.
:00:35. > :00:40.system and fears of a new credit Asia's stocks are down for a fourth
:00:40. > :00:49.The first big test will crease's new Prime Minister as he tries to
:00:49. > :00:56.push through tax rises to stave off a default -- Greece's Prime
:00:56. > :00:59.The sell-off continues on global stock markets as fears grow about
:00:59. > :01:04.the eurozone debt crisis. Nerves were frayed further on Thursday
:01:04. > :01:08.after Spain was forced to pay almost 7% interest in an auction of
:01:09. > :01:13.ten-year bonds, that is the highest since 1997 and around the levels
:01:13. > :01:17.that forced the likes of Greece and Portugal to accept a bail-out.
:01:17. > :01:22.Equally worrying, stresses in the money market not seen since the
:01:22. > :01:26.collapse of Lehman Brothers in 2008. Banks are increasingly reluctant to
:01:26. > :01:31.lend to each other and short-term borrowing costs, overnight rates,
:01:31. > :01:36.are soaring. More on that in a moment but first let's find out how
:01:36. > :01:45.those Asian markets are trading. Rico is in the Singapore office
:01:45. > :01:50.today. Bring us up today with those So far not a good day for Asian
:01:50. > :01:56.markets, Sarah. In particular for the whole week. Down for a fourth
:01:56. > :01:59.day in a row. The steepest falls since September, Sarah. As Europe's
:01:59. > :02:04.funding difficulties have intensified. Analysts are saying
:02:04. > :02:13.these are serious tell-tale signs that global funding problems may be
:02:13. > :02:23.spreading to the region. Case in point, a three-month inflation low
:02:23. > :02:24.
:02:24. > :02:31.in yen. Resource in a pen and Australia down today by 3.6% for
:02:31. > :02:38.the week and around 16% for the year. The Nikkei falling 1.6%
:02:38. > :02:46.heading for a third weekly loss and lower by 18% so far in 2011. Most
:02:47. > :02:56.emerging Asian currencies from the Singapore dollar to various others
:02:57. > :02:57.
:02:57. > :03:02.Thank you very much from Singapore. Justin, you heard Rico's update
:03:02. > :03:06.from the Asian perspective. Why are we seeing these extraordinary
:03:06. > :03:11.stresses in the market? You can go back to what we saw a few is ago
:03:11. > :03:20.when we had the Lehman Brothers crisis. -- A few years ago. The
:03:20. > :03:24.banks did not trust each other. They spread the dead all around the
:03:24. > :03:29.world and people were concerned about who had the risk -- the debt.
:03:29. > :03:34.They did not know who else have the debt. Without that trust, that
:03:34. > :03:38.interbank market started to go. Many people start looking at banks
:03:38. > :03:43.as piggy banks. They are not, they lend out money so they are not a
:03:43. > :03:48.resource of endless cash. They need to trade with other banks. If that
:03:48. > :03:53.freezes, the interbank market fails and this is what you see. A lack of
:03:53. > :03:57.trust and presumably continuing lack of uncertainty while the whole
:03:57. > :04:01.debt crisis remains unresolved in Europe. At the moment we are
:04:01. > :04:06.standing on the flanks of Vesuvius. You can feel it shaking and nobody
:04:06. > :04:10.is doing anything. That is why you are seeing country-by-country
:04:10. > :04:14.concern going up. And this is going outside the eurozone. This is
:04:15. > :04:17.spreading around the world. You need to have some clear decisive
:04:17. > :04:22.leadership not to actually deal with the symptoms of Greece and
:04:22. > :04:27.Italy and Spain, but to deal with the fundamental cause which is the
:04:27. > :04:32.euro is not working properly. If there was some statesmanlike move
:04:32. > :04:37.to say this is how we now run this currency, with discipline, process
:04:37. > :04:40.and structure. That would not solve the problem immediately but it
:04:40. > :04:45.would at least give the market's confidence that they are heading in
:04:45. > :04:52.the right direction. Thank you for joining us.
:04:52. > :04:56.Investor focus will once again be on Greece today when the new Prime
:04:57. > :05:01.Minister, Nicholas Papademos, faces his first major task. He will
:05:01. > :05:06.present his first austerity budget including tax increases and cuts in
:05:06. > :05:10.spending. Greece's national unity government must convince the EU and
:05:10. > :05:15.IMF lenders to release the latest instalment in bail-out money to
:05:15. > :05:21.avoid defaulting next month as well as a second bail-out next year. But
:05:21. > :05:25.the task is looking ever more A week after being installed as
:05:25. > :05:35.interim Prime Minister Lucas Papademos, Greece's technocrat
:05:35. > :05:41.
:05:41. > :05:47.Despite opposition, Lucas Papademos will unveil a budget the cheering
:05:47. > :05:54.controversial tax increases. The European Commission's task force or
:05:54. > :05:59.Greece says the country has about EUR60 billion worth of unpaid tax.
:05:59. > :06:04.It is about 25% of GDP. The European Commission insists better
:06:04. > :06:12.ways of collecting tax must be introduced. First and perhaps most
:06:13. > :06:20.important strengthening debt- collection. But also to have better
:06:20. > :06:28.tax dispute resolution mechanism to improve the taxpayer audit function
:06:28. > :06:32.to have better control on large taxpayers. Talks are under way
:06:32. > :06:37.between Greece and the banks that it owes billions to. Negotiations
:06:37. > :06:40.aimed at writing off 50% of the debt. The managing director of the
:06:40. > :06:49.Institute of International Finance reluctant to comment on the talks
:06:49. > :06:53.so far. Nothing for now, thank you. The prospect of higher taxes and
:06:53. > :06:57.severe cuts in spending provoked more protest in Athens on Thursday.
:06:57. > :07:02.As thousands commemorated the anniversary of the collapse of the
:07:02. > :07:06.military dictatorship in 1973. A poll this week showed one in three
:07:06. > :07:14.Greeks do not believe any Prime Minister will be able to deal with
:07:14. > :07:18.After Greece and Italy, Spain is the next country heading for a
:07:18. > :07:22.political shake-up as it prepares for elections on Sunday. If elected,
:07:23. > :07:27.as opinion polls suggest, the centre-right Popular Party say it
:07:27. > :07:33.will step up reforms to ease the borrowing costs which have left
:07:33. > :07:41.Spain close to the financial edge. But with one in five now unemployed,
:07:41. > :07:46.getting things going may prove a Spain isn't working. Scenes like
:07:46. > :07:49.this have become emblematic of major European country where a
:07:49. > :07:55.tough year of austerity and the outgoing Socialist government has
:07:55. > :08:00.only added to joblessness, which now stands twice the EU average.
:08:00. > :08:07.Economic growth could help the country's lost generation, but it
:08:07. > :08:11.is not happening. Without it Spain is growing its deficit. In spite of
:08:11. > :08:14.the country's efforts the financial markets continued to shun Spanish
:08:14. > :08:18.bonds, making servicing the national debt nearly unaffordable.
:08:19. > :08:23.Whoever gets into power, they will try to set a new tone and break
:08:23. > :08:27.this vicious downward spiral. The new administration faces an uphill
:08:27. > :08:33.struggle in trying to avoid the need for a rescue from European
:08:33. > :08:37.partners who are running out of money. It does have a 100 point
:08:37. > :08:41.reform programme and included in that is a plan to speed up the
:08:41. > :08:46.clean-up of the banking system. Another priority will be radical
:08:46. > :08:50.reform of Spain's labour laws, which experts say discourage
:08:50. > :08:55.enterprise and makes paying uncompetitive. We need to end with
:08:55. > :09:02.temporary jobs -- makes Spain uncompetitive. We need to cut down
:09:02. > :09:05.firing costs by at least 50%. There is a large EUR200 minimum
:09:05. > :09:09.contribution to social security. That is preventing part-time jobs
:09:09. > :09:19.in Spain. Remove that and make social security contributions
:09:19. > :09:19.
:09:19. > :09:24.proportional to your wages and we will seek -- we will seek things
:09:24. > :09:28.change. Whoever wins after Sunday's vote will inherit one of Europe's
:09:28. > :09:33.most troubled economies. The only small crumb of comfort might be
:09:33. > :09:36.that Spain doesn't face a major bond redemption until April of next
:09:37. > :09:41.year. Let me just show you what those
:09:41. > :09:45.markets have been doing. We did hear from Rico that it has been a
:09:45. > :09:48.very difficult day yet again in Asia with the markets down for the
:09:48. > :09:52.Asia with the markets down for the fourth day in a row. But there's
:09:52. > :09:56.how the Dow Jones finished on Thursday. Despite some pretty good