:00:03. > :00:13.more than twice the size of the Earth. Those are the latest
:00:13. > :00:15.
:00:15. > :00:22.headlines. Now we have the latest financial news. This is World
:00:22. > :00:26.Business Report. The headlines: Standard and Poor's warns that all
:00:26. > :00:32.eurozone countries could be downgraded depending on the outcome
:00:33. > :00:42.of this week's EU summit. Timothy Geithner heads to Europe to voice
:00:43. > :00:45.
:00:45. > :00:50.his concern about the debt crisis. Controversial timing, the credit
:00:50. > :00:54.ratings agency Standard & Poor's has warned that Germany, France and
:00:54. > :01:00.13 other eurozone countries could have their debt rating downgraded.
:01:00. > :01:04.That means they have a 50% chance of a downgrade in 90 days. It would
:01:04. > :01:09.make it more expensive for those countries to borrow money. It comes
:01:09. > :01:13.just as markets were getting more optimistic about a resolution.
:01:13. > :01:19.European leaders have procrastinated for months, now they
:01:19. > :01:26.are getting a rap across the knuckles. Standard and Poor's has
:01:26. > :01:30.bought the entire eurozone under credit watch. Within 90 days they
:01:30. > :01:34.will review the finances of all of those countries, there is a 50%
:01:34. > :01:38.chance some could see their credit rating downgraded. A credit
:01:38. > :01:43.downgrade would be a severe blow to countries like Italy and Spain
:01:43. > :01:48.which have seen the cost of borrowing rise severely. Germany,
:01:48. > :01:58.which has been the economic powerhouse, it could set them back
:01:58. > :02:00.
:02:00. > :02:04.severely. They have enjoyed a AAA rating. This warning by Standard &
:02:04. > :02:08.Poor's has put paid to the relief rally that we saw on global stock
:02:08. > :02:14.markets. It has put European leaders under severe pressure to
:02:14. > :02:19.come up with a -- a solution when they meet later this week. It is
:02:19. > :02:27.not that Europe's problems have been unexpected, but this is a
:02:27. > :02:37.warning that Europe needs to solve its problems quickly. It is good to
:02:37. > :02:40.
:02:40. > :02:43.see you. What do you make of this move by Standard & Poor's? Timing
:02:43. > :02:49.is the big thing again. We were starting to see markets with a bit
:02:49. > :02:54.more optimism. We have been waiting for more details to come out. This
:02:54. > :03:00.is not the detail that we wanted to come out, but we have seen movement.
:03:00. > :03:07.Now, all of a sudden, a potential downgrade of 13 eurozone countries.
:03:07. > :03:12.That has struck fear into the market again. It is interesting.
:03:12. > :03:22.The news was out towards the end of Trade, there was not a severe
:03:22. > :03:23.
:03:23. > :03:32.reaction. It has not caused a massive wobble? Because we have a -
:03:32. > :03:40.- had so much bad news from rating agencies, they and are doing
:03:40. > :03:50.anything but stating the obvious. - - they are not doing. It is nothing
:03:50. > :03:59.new. If on 9th December they do not come up with the goods, Europe's
:03:59. > :04:08.leaders yet again, if there was a downgrade, talk us through the
:04:08. > :04:12.implications. The EU is already struggling to raise money. If the
:04:12. > :04:16.downgrade happens for these countries, it is going to drive up
:04:16. > :04:23.borrowing costs. It'll make it harder to borrow at a sustainable
:04:23. > :04:31.rate. No-one is going to want to lend to these countries after
:04:31. > :04:35.having a downgrade. Thank you. We will see you later for a look at
:04:35. > :04:40.the newspapers. Underlining the seriousness with which America is
:04:40. > :04:48.watching this crisis, US Treasury Secretary Timothy Geithner is in
:04:49. > :04:58.Europe for crisis talks. He is worried about Europe's financial up
:04:59. > :05:11.
:05:11. > :05:19.Havel's and the impact on America. -- upheaval. There are so many
:05:19. > :05:22.famous shops along this stretch. The financial crisis could be the
:05:22. > :05:32.creature that stock Christmas. These women are in their own
:05:32. > :05:37.
:05:37. > :05:46.cosmetic companies. She is worried. Most of the people I sell to our
:05:46. > :05:54.small businesses. It will be shattering. Sales to Japan dried up
:05:54. > :06:03.after the recent earthquake, she's counting her in this -- inventory
:06:03. > :06:08.just in case. I am not going to stock up too much just in case. The
:06:08. > :06:14.shelf life is about two years. I do not want to be sitting on it too
:06:14. > :06:22.long. General Motors is counting the cost. Profits for the third
:06:22. > :06:32.quarter fell 15%. This Economist warns that if the crisis widens, it
:06:32. > :06:33.
:06:33. > :06:38.will hurt the US economy. It could cut GDP growth by 0.5% depending on
:06:38. > :06:44.how serious the European downturn is. What is important at the
:06:44. > :06:49.financial linkages that could hurt the economy. President Obama's
:06:49. > :06:59.Treasury Secretary is in Europe again to one leaders to act quickly
:06:59. > :07:02.
:07:02. > :07:09.and decisively to solve this crisis. -- warn. The Irish government will
:07:09. > :07:13.unveil the second part of its budget today. It will include
:07:13. > :07:23.measures to raise taxes. The Irish government is sticking with
:07:23. > :07:28.austerity. Ireland is halfway through its second bail-out budget.
:07:28. > :07:33.The Irish finance minister will unveil tax rises, totalling 1.6
:07:33. > :07:40.billion euros. Yesterday, his coalition colleague announced
:07:40. > :07:45.spending cuts totalling 2.2 billion euros. No government, whatever its
:07:45. > :07:54.numbers, wants to be the bearer of bad news. Our options are extremely
:07:54. > :07:59.limited. The public knows that. tough measures are winning praise
:07:59. > :08:05.from the international community. The austerity prescription seems to
:08:05. > :08:11.be working. For the first time since 2007 Ireland is going to show
:08:11. > :08:16.growth this year. We have very strong export performance. We are
:08:16. > :08:19.running a two speed economy. Exporters are performing very well.
:08:19. > :08:29.International credibility does not do much to assuage domestic
:08:29. > :08:33.
:08:33. > :08:39.concerns. Ireland is into its fourth year of austerity measures.
:08:39. > :08:44.However, we find that today's budget is more bitter medicine.
:08:44. > :08:54.let it go over your head. You know what is coming. You have to get on
:08:54. > :08:55.
:08:55. > :09:00.with it. It is just the way society is divided up. There are those at
:09:00. > :09:07.the top of the tree and those at the bottom of the tree. We need to
:09:07. > :09:17.cut back. Accepting your lot might be a Greek concept, but the Irish
:09:17. > :09:17.
:09:17. > :09:26.have taken it to heart. Let's have a look at the markets in Asia. They
:09:26. > :09:35.are reacting to the Standard & Poor's potential downgrade News.