29/06/2012 World Business Report

2020. Those are the latest headlines from BBC World News. Now

for the latest financial news with Susannah Streeter and World

Business Report. The Euro surges as EU leaders agree measures to boost

the economy and ease soaring borrowing costs for Italy and Spain.

Mark its in any should bounce back up to the breakthrough at the use

summit. Investigators widen their net in an interest rate fixing

scandal that has the boss of Barclays fighting for his job.

There's been a breakthrough in Brussels after long hours of debate.

In the last hour European leaders seem to have agreed a deal to boost

growth in the EU and more importantly ease market pressure on

Italy and Spain. The agreement : To use the region's bailout fund more

flexibly. Also a growth pact, mobilising 120 billion euros of EU

money to boost struggling economies and create jobs. We'll get some

analysis from Brussels in a moment. First let's go straight to

Sharanjit Leyl in Singapore to see how all this is going down with

investors. It is going down pretty well with investors. Asian markets

are Clearing their earlier losses. The Nikkei shooting up over 1%

after its morning break following the news of that breakthrough.

Searching and over the psychological 9,000 mark, for the

first time in seven weeks. Markets had been something earlier in the

day. -- slumping. It is countering dismal news from Japan regarding

its industrial production numbers. The biggest fall since the

earthquake and tsunami last year. Weakness in European demand was

blamed for that, especially the automobile and output in Japan. The

EU is the biggest trade partner of many regional economies, including

China and Japan. Its health will have a big impact on Asia's export

reliant economies. The European move as well is having an impact on

currencies: The euro is rising against the yen. That is having an

effect on exporters, who rely on a weaker currency to lift their

competitiveness overseas. Thank you. Sony Kapoor is from the European

think-tank Re-define and he is in our Brussels bureau. Is this really

a breakthrough or do you think it could stumble again? It could

stumble again, but it is an unexpected development. The summit

was not expected to deliver much. But by this breakthrough it has

admitted being a complete disaster. We do not know the details yet and

they will be fleshed out over six months between now and December.

There are many people's and disagreements remaining in the way.

What appears to be key in the deal in its help from the bail-out fund

to recapitalise the banks. It is essential to reassure the bond

markets that the bail-out fund will not get preferential status above

other lenders. Is that right? is an important part of the deal,

but not as important as said. Timmy, the key is if the bail-out fund is

able to inject equity directly into Spanish banks, the rescue does not

add to the Spanish government and breaks a vicious link between

Spanish banks and the Spanish sovereign. There have been pulling

each other down. Seniority status seems to have been put on the shelf

now. We have heard about the 20 billion euros boost for growth

across the eurozone. Is these new money? Not really. There is some

new money, but less than meets the eye. This these small, 1% of

eurozone GDP, spread over the next two of three years. Secondly, the

single most important thing needed now is slowing down the pace of

austerity. This seems to sit alongside Dwight there austerity.

As long as the pace of tightening is said Dan 4% of GDP per year, a

1% of additional investment will not have growth restored. What is

needed in addition to this 120 billion euros is an agreement to

slow down the pace of adjustment and habit over an extended period

of time so growth does not contract in the short-term. Thank you.

Another potentially massive scandal is erupting in the banking world.

The full implications of the rigging of market rates by Barclays

banks are emerging. They closed 15% down. It has left bob Diamond,

Barclays' Consumer Electronic Association, fighting for his job.

So far, bob Diamond is toughing it out. David Cameron has called the

interbank rate fixing a scandal. Labour are talking of possible

criminal prosecutions. Bob Diamond has offered to face MPs on the

parliamentary Select Committee, saying that Barclays will have to

work every day to restore trust. At their branches it is business as

usual, the shares are falling and the company has been fined �300

million. Barclays tried to influence those setting be like all

rates. Some analysts now say the problem could be a management

masterstroke. Arantxa Rus legal -- Libor. Libor is not something

agreed by one party, but several. I would find it impossible that

Barclays was the only name in the frame. 20 other banks are being

investigated. Later, Sir Mervyn King, the Governor of the Bank of

England, will deliver the latest report. When the scandal first

broke, Barclays Prize actually closed up, but then it dropped like

a stern on Thursday. What make people realise it was serious?

Politics. Politicians K-Mart and said that if that happened with the

bank in their country they would explore criminal legislation to

make sure we did not happen again. That is an enormous threat to all

the banks. The Times report this morning that RBS could be next. It

reports it will be fined �115 million for its part. That has not

been confirmed by the Bank yet. This is not just a Barclays Bank

problem. Absolutely not. The top 25 banks in the world are somehow

involved in his. 100 people are managing this - not a large group

of people, but they are spread out among the banks. Bob Diamond has

said he will go before a parliamentary committee to talk to

them about what happened. He said he did not know anything about it,

but should he have done? It is the important. Eight. I do not think

they knew about it because they would have changed it if they did.

The fact he did not know is inexcusable. He is going in front