06/12/2011 World Business Report


06/12/2011

Similar Content

Browse content similar to 06/12/2011. Check below for episodes and series from the same categories and more!

Transcript


LineFromTo

more than twice the size of the Earth. Those are the latest

:00:03.:00:13.
:00:13.:00:15.

headlines. Now we have the latest financial news. This is World

:00:15.:00:22.

Business Report. The headlines: Standard and Poor's warns that all

:00:22.:00:26.

eurozone countries could be downgraded depending on the outcome

:00:26.:00:32.

of this week's EU summit. Timothy Geithner heads to Europe to voice

:00:33.:00:42.
:00:43.:00:45.

his concern about the debt crisis. Controversial timing, the credit

:00:45.:00:50.

ratings agency Standard & Poor's has warned that Germany, France and

:00:50.:00:54.

13 other eurozone countries could have their debt rating downgraded.

:00:54.:01:00.

That means they have a 50% chance of a downgrade in 90 days. It would

:01:00.:01:04.

make it more expensive for those countries to borrow money. It comes

:01:04.:01:09.

just as markets were getting more optimistic about a resolution.

:01:09.:01:13.

European leaders have procrastinated for months, now they

:01:13.:01:19.

are getting a rap across the knuckles. Standard and Poor's has

:01:19.:01:26.

bought the entire eurozone under credit watch. Within 90 days they

:01:26.:01:30.

will review the finances of all of those countries, there is a 50%

:01:30.:01:34.

chance some could see their credit rating downgraded. A credit

:01:34.:01:38.

downgrade would be a severe blow to countries like Italy and Spain

:01:38.:01:43.

which have seen the cost of borrowing rise severely. Germany,

:01:43.:01:48.

which has been the economic powerhouse, it could set them back

:01:48.:01:58.
:01:58.:02:00.

severely. They have enjoyed a AAA rating. This warning by Standard &

:02:00.:02:04.

Poor's has put paid to the relief rally that we saw on global stock

:02:04.:02:08.

markets. It has put European leaders under severe pressure to

:02:08.:02:14.

come up with a -- a solution when they meet later this week. It is

:02:14.:02:19.

not that Europe's problems have been unexpected, but this is a

:02:19.:02:27.

warning that Europe needs to solve its problems quickly. It is good to

:02:27.:02:37.
:02:37.:02:40.

see you. What do you make of this move by Standard & Poor's? Timing

:02:40.:02:43.

is the big thing again. We were starting to see markets with a bit

:02:43.:02:49.

more optimism. We have been waiting for more details to come out. This

:02:49.:02:54.

is not the detail that we wanted to come out, but we have seen movement.

:02:54.:03:00.

Now, all of a sudden, a potential downgrade of 13 eurozone countries.

:03:00.:03:07.

That has struck fear into the market again. It is interesting.

:03:07.:03:12.

The news was out towards the end of Trade, there was not a severe

:03:12.:03:22.
:03:22.:03:23.

reaction. It has not caused a massive wobble? Because we have a -

:03:23.:03:32.

- had so much bad news from rating agencies, they and are doing

:03:32.:03:40.

anything but stating the obvious. - - they are not doing. It is nothing

:03:40.:03:50.

new. If on 9th December they do not come up with the goods, Europe's

:03:50.:03:59.

leaders yet again, if there was a downgrade, talk us through the

:03:59.:04:08.

implications. The EU is already struggling to raise money. If the

:04:08.:04:12.

downgrade happens for these countries, it is going to drive up

:04:12.:04:16.

borrowing costs. It'll make it harder to borrow at a sustainable

:04:16.:04:23.

rate. No-one is going to want to lend to these countries after

:04:23.:04:31.

having a downgrade. Thank you. We will see you later for a look at

:04:31.:04:35.

the newspapers. Underlining the seriousness with which America is

:04:35.:04:40.

watching this crisis, US Treasury Secretary Timothy Geithner is in

:04:40.:04:48.

Europe for crisis talks. He is worried about Europe's financial up

:04:49.:04:58.
:04:59.:05:11.

Havel's and the impact on America. -- upheaval. There are so many

:05:11.:05:19.

famous shops along this stretch. The financial crisis could be the

:05:19.:05:22.

creature that stock Christmas. These women are in their own

:05:22.:05:32.
:05:32.:05:37.

cosmetic companies. She is worried. Most of the people I sell to our

:05:37.:05:46.

small businesses. It will be shattering. Sales to Japan dried up

:05:46.:05:54.

after the recent earthquake, she's counting her in this -- inventory

:05:54.:06:03.

just in case. I am not going to stock up too much just in case. The

:06:03.:06:08.

shelf life is about two years. I do not want to be sitting on it too

:06:08.:06:14.

long. General Motors is counting the cost. Profits for the third

:06:14.:06:22.

quarter fell 15%. This Economist warns that if the crisis widens, it

:06:22.:06:32.
:06:32.:06:33.

will hurt the US economy. It could cut GDP growth by 0.5% depending on

:06:33.:06:38.

how serious the European downturn is. What is important at the

:06:38.:06:44.

financial linkages that could hurt the economy. President Obama's

:06:44.:06:49.

Treasury Secretary is in Europe again to one leaders to act quickly

:06:49.:06:59.
:06:59.:07:02.

and decisively to solve this crisis. -- warn. The Irish government will

:07:02.:07:09.

unveil the second part of its budget today. It will include

:07:09.:07:13.

measures to raise taxes. The Irish government is sticking with

:07:13.:07:23.

austerity. Ireland is halfway through its second bail-out budget.

:07:23.:07:28.

The Irish finance minister will unveil tax rises, totalling 1.6

:07:28.:07:33.

billion euros. Yesterday, his coalition colleague announced

:07:33.:07:40.

spending cuts totalling 2.2 billion euros. No government, whatever its

:07:40.:07:45.

numbers, wants to be the bearer of bad news. Our options are extremely

:07:45.:07:54.

limited. The public knows that. tough measures are winning praise

:07:54.:07:59.

from the international community. The austerity prescription seems to

:07:59.:08:05.

be working. For the first time since 2007 Ireland is going to show

:08:05.:08:11.

growth this year. We have very strong export performance. We are

:08:11.:08:16.

running a two speed economy. Exporters are performing very well.

:08:16.:08:19.

International credibility does not do much to assuage domestic

:08:19.:08:29.
:08:29.:08:33.

concerns. Ireland is into its fourth year of austerity measures.

:08:33.:08:39.

However, we find that today's budget is more bitter medicine.

:08:39.:08:44.

let it go over your head. You know what is coming. You have to get on

:08:44.:08:54.
:08:54.:08:55.

with it. It is just the way society is divided up. There are those at

:08:55.:09:00.

the top of the tree and those at the bottom of the tree. We need to

:09:00.:09:07.

cut back. Accepting your lot might be a Greek concept, but the Irish

:09:07.:09:17.
:09:17.:09:17.

have taken it to heart. Let's have a look at the markets in Asia. They

:09:17.:09:26.

are reacting to the Standard & Poor's potential downgrade News.

:09:26.:09:35.

Download Subtitles

SRT

ASS