:00:19. > :00:23.power of his office. Now it is time for World Business Report. The
:00:23. > :00:30.headlines: In the eye of the strong. The PCP prepares another cut in
:00:30. > :00:39.interest rates and new measures to ease the funding pressure on banks.
:00:39. > :00:49.-- the ECB. Companies draw up their contingency plans in case of a
:00:49. > :00:50.
:00:50. > :00:55.break-up of the eurozone. Thinking the unthinkable. On as you have
:00:55. > :00:59.been hearing, tonight sees the start of the EU summit where
:00:59. > :01:09.leaders will attempt to put in place a lasting solution to the USO
:01:09. > :01:13.debt crisis. But before the summit, the ECB will be taking centre-stage.
:01:13. > :01:22.They are expected to take action to ease pressures on the banking
:01:22. > :01:32.system. Another cut in interest rates is on the cards, most likely
:01:32. > :01:35.
:01:35. > :01:43.0.25%, taking borrowing costs to a record low of 1%. More details from
:01:43. > :01:51.Brussels. It is very important that the ECB does take steps today ahead
:01:51. > :01:57.of the meeting. Yes. BCP is the only European institution that is
:01:57. > :02:03.able to regain the confidence of financial markets. -- the European
:02:03. > :02:09.Central Bank. To what extent will it help economies like Italy and
:02:09. > :02:15.Spain when their borrowing costs are so why? A cut would clearly
:02:15. > :02:20.help their economies. That is a good thing because that point
:02:20. > :02:27.cushion the recession we are already in. Do think they should do
:02:27. > :02:32.more than a quarter-point cut? they did more they would send a
:02:32. > :02:38.clear signal that they are willing to do quantitative easing, willing
:02:38. > :02:46.to print money. Bake would say that interest rates are so let they have
:02:46. > :02:51.no other option than printing money. What is your view on that? Many
:02:51. > :02:58.have called for the ECB to do that quite some time ago. It is an
:02:58. > :03:03.ongoing debate. The mandate of the ECB calls for price stability. That
:03:03. > :03:09.is their main target. Printing money is for Big Ben by the
:03:09. > :03:18.European treaties Foster we aren't making a crisis situation. -- for
:03:18. > :03:24.bidden by the European treaties. Figures from the ECB yesterday
:03:24. > :03:32.showed that banks are scrambling for a dollar funding at the moment.
:03:32. > :03:40.Will they do something about that as well? They will relax the
:03:40. > :03:45.landing conditions for European banks. They will extend liquidity
:03:45. > :03:54.to be the lender of last resort for the banks. They will not do that
:03:54. > :04:01.for governments. Briefly, after the summit, do you think there will be
:04:01. > :04:10.more news from the ECB on bond buying? Yes. They are waiting for a
:04:10. > :04:12.fiscal compact to be delivered. If they do so, I would not be
:04:12. > :04:22.surprised if ECB announces something on Sunday evening of
:04:22. > :04:22.
:04:22. > :04:27.Monday morning. Thank you. China says it is still confident in the
:04:27. > :04:33.euro, but does this mean their economy is it willing to help the
:04:33. > :04:37.eurozone? We speak to our correspondent in Singapore. This is
:04:37. > :04:46.bringing a burst of confidence te EU leaders. China's timing is
:04:46. > :04:55.everything. You as. Essentially, these were quotes directly from
:04:55. > :05:02.China's Foreign Minister. -- yes. The website at sight seem as saying
:05:02. > :05:09.that China would use a variety of means to help the European Union
:05:09. > :05:16.and its sovereign debt problems. He was telling this to his German
:05:16. > :05:19.counterpart in Berlin this week. He said it would benefit every country
:05:19. > :05:27.in the world for the European economy to maintain stability and
:05:27. > :05:32.continue developing. These comments come just before the EU leader's
:05:32. > :05:37.summoned on proposals for tighter eurozone integration. China is the
:05:37. > :05:47.owner of the world's largest foreign exchange reserves. Its
:05:47. > :05:49.
:05:49. > :05:52.pockets are fairly deep. Europe cannot expect China to use a big
:05:52. > :06:01.portion of its foreign exchange reserves to rescue Europe's
:06:01. > :06:05.indebted nations. Questions also over how helpful China can be
:06:05. > :06:13.because it is estimated that two- thirds of their reserves are locked
:06:13. > :06:21.up in dollar assets and cannot be sold. Thank you for explaining the
:06:22. > :06:27.helping hand that might be coming from China. Financial markets are
:06:27. > :06:35.poised for the possible financial collapse. Businesses are also
:06:35. > :06:40.starting to plan for the worst. Our correspondent reports. Business
:06:40. > :06:47.life will be turned upside down for these small British business if its
:06:47. > :06:54.main suppliers in breeze dropped out all were thrown out of the euro.
:06:54. > :07:00.-- suppliers in Greece. Some organisations have already spent
:07:00. > :07:09.entire weekends doing planning of scenarios, working out what they
:07:09. > :07:12.would do if the worst case happened in various countries. They could
:07:12. > :07:17.face dramatic inflation and devaluation and would find it
:07:17. > :07:24.impossible to honour deals signed in euros. This company has a
:07:24. > :07:32.contingency plan. We would to renegotiate the contracts in
:07:32. > :07:36.drachma. There would be a devaluation and we would hope and
:07:36. > :07:43.to realise a reduction in the prices of our holidays as a result
:07:43. > :07:50.of that. If it did happen that they came out of the euro, it would give
:07:50. > :07:58.them a benefit to tourism. The instability it would cost would
:07:59. > :08:03.still be a problem with consumer confidence. Multinationals like the
:08:03. > :08:10.Diageo drinks giant have been running computer models, trying to
:08:10. > :08:16.second-guess what might happen. Some of their products would be 40%
:08:16. > :08:22.more expensive. The smallest companies, which depend on exports,
:08:22. > :08:28.might be the hardest hit. BBC News. Europe's banking regulator said it
:08:28. > :08:33.will reveal later how much extra capital the banks will need to ride
:08:33. > :08:43.at this crisis. The European banking authority will make its
:08:43. > :08:43.
:08:43. > :08:49.announcement at 700 GMT, just a 70 banks in the region needed to
:08:49. > :08:55.raise a combined $142 billion. That amount is expected to have
:08:55. > :09:02.increased. The Bank of England is expected to leave interest rates on
:09:02. > :09:09.hold at their record low of 0.5%. It is not expected to ramp up
:09:09. > :09:15.stimulus measures. That is despite signs that the UK economy is
:09:15. > :09:22.ticking back into recession. The markets today are fairly negative.
:09:22. > :09:26.In Japan manufacturing orders have dropped. That was unexpected. That
:09:26. > :09:34.gives you a sign that perhaps things are getting tougher for
:09:34. > :09:40.Japanese exporters. Elite next year, 2012, Japan will be hitting a tough