12/03/2012 World Business Report

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Welcome to World Business Report. Eurozone finance ministers meet in

Brussels today where they are expected to sign off Greece's

second - 130 billion euro bailout The Japanese stock market has

broken about 10,000. The former heads of eyes than's three main

banks are due to testify against the former Prime Minister. Eurozone

finance ministers meet in Brussels today where they are expected to

sign off Greece's second bail-out package. With the heat off Athens

for the moment - they will turn their attention to the worrying

state of Government finances elsewhere in the Eurozone. In

particular they are expected to focus on Spain, where Prime

Minister Mariano Rajoy has admitted he'll miss targets to cut the

budget deficit this year. They are also likely to discuss boosting the

Eurozone crisis funds from 500 billion euros to 750 billion euros.

This week, obviously there is some relief with the deals done on

Friday. But then they are looking at what is next? Yes, the main

problem areas are just as large. There is Portugal and Spain. The

focus might go from Greek bail-out to the lack of growth in the rest

of the eurozone. This is acute in Portugal and Spain. We have just

gone through the Greek club crisis. -- great crisis. What is the

situation like? People are up saying the fund is not big enough

to cope with another crisis. Yes, that has been a big issue since the

weekend, because the IMF is halving its contribution to the second

Greek bowl out. This puts pressure on European money. Spain and

Portugal are not as bad as Greece, but the real risk is crows.

Portugal will contract this year. Spain says it will miss its fiscal

targets. There is not much hope that these big idea is to break the

deficits are not working. There has been a stalemate for a long time.

At the last G20 meeting they said eurozone economies have to put more

money in the pot before they contribute more. Yes, it is

circular. The IMF will not give more money. But equally, Germany

will not contribute more, and Germany makes the most important

contribution to the fund. They would contribute more until they

see more fiscal consolidation in the eurozone countries. That is

what we are seeing with Spain - that will be very difficult. Either

Germany loosens its fiscal grip or there will be problems with

investors worrying that the bail- out fund is not big enough. Thank

you for talking us through that. Let's talk about Japan. The Nikkei

index has traded above 10,000 for the first time in seven months. It

is a symbol of the recovering economy after the earthquake one

year ago. Tell us more about these encouraging signs from Japan. Very

encouraging signs in early and late trading for the Japanese stock

market. It is down 26 points now but still very resilient compared

to other regions today. Construction companies are making

gains as rebuilding gains momentum. Also, you have the weakening yen.

It is at at 11-month low against the US dollar, helping the steel

makers. You also have improving Chinese demand for Japanese steel

and prospects of lower up iPhone or prices. Some still makers have

risen 4% today. The Prime Minister has been very vocal about the

currency, saying the yen is still overvalued. Many Japanese he does

believe fair value is between 90 and 100 yen to the dollar. The

Central Bank of Japan is meeting for its two-day meeting and I would

imagine is feeling more positive about the outlook given the growth

figures last week. Absolutely, but according to many analysts there is

still tremendous pressure to do more to stoke the group. Last week

the Central Bank surprised markets by boosting asset purchases by up

over $120 billion. Inflation is 1% after years of falling prices. The

Bank of Japan is on the brink of exhausting all efforts to confront

the economy, but they need The Help of the Government to improve

sentiment and release the reconstruction funding that will

boost the economy. -- the help. Six European airlines have attacked the

EU's carbon emissions tax. They say it would cost them billions in lost

orders and we took thousands of job losses. China has locked purchases

of planes in reaction to new rules about flies to the EU. Toyota it

will confirm it has made a profit of 16 being used. The debut was the

first car company to gain a firm foothold in China. -- Volkswagen.

The former heads of Iceland's three main banks are due to testify today

at the trial of ex-Prime Minister Geir Haarde. The banks collapsed in

2008 after running up debts almost 10 times the size of the annual GDP,

forcing Iceland to seek an IMF rescue. Haarde is on trial for

negligence in failing to prevent the crisis, a charge he has called

preposterous. He's the first world leader to face criminal charges

over the financial crisis. His plea is not guilty. Let's speak to

Magnus Arni Skulason, managing director of Reykjavik Economics.

Thank you for being on the program. I would imagine bear would be a lot

of interest in these three bankers speaking today, in terms of what

they will say about what happened. Yes, but of course there is some

evidence from the Special Investigation report from the

Parliament. What happened last Friday is that the current Prime

Minister, took the witness stand, and said the former prime minister

did his best and could not be blamed for the crisis. He not a lot

of air out of the case. What do you think the outcome of the case will

be? He calls it preposterous. difficult to say. This is not only

the Supreme Court but also ordinary citizens judging. I would guess

that at least so far there is no clear verdict. In terms of its eyes

loan's turnaround, how did she do that? -- Ice land's. -- Icelands.

The external adjustment came from the Icelandic currency, which made