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