>> hello and welcome. our headlines at this hour. china warns the u.s. about mounting debt levels and its worries about a downgrade. a former german media magnate dies at the age of 84. samuel sanchez of spain comes out on top as the tour de france heads into the mountains. captioned by the national captioning institute --www.ncicap.org-- >> global financial tensions are

deepening as u.s. talks on raising the debt ceiling and to their fifth agreement -- and -- their fifth day with no agreement in sight and the main creditor calls for a quick solution. >> the u.s. is running out of time. the u.s. needs to raise its 43 trillion dollar debt limit by august 2 to avoid default. >> they could drastically cut key benefits like pensions and health care. >> china has been calling for spending cuts as a way to protect its investment in u.s. treasury bonds. >> china would lose money if the u.s. credit rating is downgraded. they are the biggest u.s. creditor and hold more than $1 trillion in u.s. treasury bonds. china called on the u.s. to take steps to protect bondholders.

the ongoing budget debate in the u.s. congress has prompted moody's to issue a second downgrade warning of america's aaa rating. federal reserve chairman ben bernanke is adding to the pressure on lawmakers to raise the u.s. debt limit. >> clearly, if we went so far as to default on the debt it would be a major crisis. the treasury security is viewed as the most liquid in the world, the foundation for much of our financial system. the notion that it would become suddenly unreliable and illiquid would throw shockwaves through the entire global financial system. >> washington must raise the debt limit to service its debt. president barack obama opposes large cuts to social security and medicare. >> banking officials say ireland

is making good progress and is on track to meet its austerity targets. that is the word from bailout lenders including the european union. they delivered their assessment just one day after moody's downgraded irish that -- debt. officials from the eu, imf, and ec be have been in ireland checking if the government is worthy of receiving the next installment of its $85 -- its 85 billion euro bailout. ireland had been making good progress and there is no target unmet. the downplayed moody's decision to downplay irish debt. >> it is worth pointing out that rating agencies have got it wrong on the upside during boom times by underestimating the risks. it is entirely possible that are getting it wrong on the

downside by overestimating the risks. >> dublin was granted the bailout when its banking and fiscal crisis threaten to destabilize the europe. if the current program is to stay on track, dublin will have to cut at least 3.6 billion euros from next year's budget. italy is also trying to fight its massive debt. >> sweeping austerity measures have won the initial approval of parliament as part of urgent moves to reduce their huge debt. senators approved the 47 billion euro for your package by a comfortable margin. the lower house is expected to pass it on monday. the high debt burden has raised concerns italy could be the next eurozone nations to need an emergency bailout. our roving correspondent has been following that debate in the senate for us. -- our rome correspondent has

been following the debate in the senate for us. how does austerity look for ordinary italians? >> the big weakness of this budget is it puts off some many of the cuts and tax increases until 2013, 2014. that is not coincidental. there is a general election in june 2013. all of this will have to be done by the next government. in the meantime, there is going to be a gaming tax, increased health charges, cuts in pensions, but only for the highest pensions -- and in italy, pensions are pretty generous. this is not a budget which in the short-term is going to lead anybody into destitution. >> in other news, syrian pro- democracy activists say government forces have killed at least nine people as protests against the president continue.

reports indicate the military crackdown on opposition activists in damascus and hana. police have arrested members of opposition supporters. non-governmental organizations say at least 1600 people have been killed since the uprising began four months ago. 13 turkish soldiers have been killed in an attack in the southeast of the country. officials say kurdish militants ambushed troops. six soldiers were also wounded. it is the worst attack by kurdish militants since the separatist kurdistan workers party ended a six-month cease- fire in february. in southern afghanistan, at least four people have been killed in an attack on a memorial service for the brother of president karzai. a suicide bomber struck the red

mosque in kandahar. the dead included one of afghanistan's leading clerics. the president's brother was assassinated at his home on tuesday. the taliban claimed responsibility for that killing. the commander of nato forces in afghanistan, and general david petraeus, has been holding security talks in pakistan as divisions deepen between washington and islamabad. the u.s. is holding hundreds of millions of dollars in security assistance. pakistan has called for an end to u.s. drone raids that have been taking an increasing civilian toll. >> u.s. drones' fly it around the clock in pakistan, targeting fighters in the mountainous region bordering afghanistan. civilians are often killed in the attacks. pakistan has condemned the ground strikes as a violation of its sovereignty, although some

analysts believe they are carried out with the help of pakistan the -- pakistani intelligence. >> we are firmly against all terrorist groups. but we fight in partnership with other law-enforcement agencies. >> washington announced it was holding back a third of the military aid earmarked for pakistan, $100 million. airstrikes are putting more pressure on the already tense relationship between the u.s. and pakistan. >> give the pakistan government the drones. that is the way it should be. [unintelligible] >> the dispute shows no sign of easing. islamabad is threatening to pull its soldiers out of the region

along the border. >> human rights groups say more than 1300 people may have been killed when an arms depot blew up in turkmenistan last week. the blast was outside of the capital. the government initially blamed the fire at a fireworks storage facility. officials from the country say only 15 people were killed. the country's exiled opposition has posted images of the explosion, saying the true death toll is much higher. news corporation owner billionaire rupert murdoch has agreed to give evidence next tuesday to a british parliamentary committee investigating illegal activities at his british newspapers. murdoch and his son james will appear with rebecca brooks, the chief ceo of the british newspaper branch. she is also the former chief editor of "the news of the world," the tabloid which closed in the face of mounting evidence

that it and other newspapers gained information by illegal means such as hacked voice mails and buying of policemen. the planned merger of the new york and frankfurt stock exchanges has passed another milestone. >> a large portion of shareholders approved the deal, which creates the world's biggest stock exchange. the approval was one of the last major obstacles to the merger plan. nyse/ueor -- nyse/euronext shareholders already gave the approval last week. authorities 1 5 billion euros in long-term bonds, but only high yields, reflecting concerns over rome's ability to stabilize finances. european shares lost ground for the fourth time in five sessions.

the dax finished today lower. the same for the eurostoxx 50. the dow jones industrial also ended the session down by 0.4%. the euro is trading for $1.4149. russia is taking a step into the german energy markets. gazprom and german utility rwe have agreed on what they are calling a strategic partnership. for rwe, this insures a supply of russian gas. gazprom is to join its building and operating gas and power plants in and outside germany. more details are expected in the next few months. >> the end of an era in many ways. a german media mogul has died at the age of 84, ending his spectacular rise and fall.

he built an empire, only to see it crumble. he was an old fashioned wheeler dealer. he was also the modest son of a wine maker, a devout catholic who tended to avoid the glittering media world. >> these images of his 75th birthday are a rare private glimpse of the magnet. he tended to avoid cameras, having often found himself embroiled in controversy. >> i think you all for coming, my friends. if my enemies were here, we would need a lot more space. >> making enemies was part of the price he paid for his ambition. this was the heart of his media empire. he built the largest film library outside the united states. it all started with one film. in 1956, he bought the rights to "la strada." he went on to make a fortune

licensing american films to german television. when germany opened up television in the 80's, he helped start the first commercial broadcaster. at the height of his career, he owned the rights to football matches and formula one races, and held 30% of a media group. but in 2002, his empire collapsed under more than 6 billion year as in debt. his venture in pay-tv had simply cost too much. he blamed deutschebank and sued the lender. it has been one of the most bitter corporate disputes and was left unresolved at the time of his death. >> the tour de france has hit the high mountains for the first time this year as the race entered the pyrenees. 211 kilometers for a mountaintop

finish. these stages are a favorite of the basque suckling -- cycling fans. they were not disappointed. one of their team was first over the line. >> he and a belgian writer broke away on the last descent and opened up a lead of preparing for the final climb. the spaniard accelerated away and crossed the line first, a good day for the basques. but the french had plenty to cheer about on bastille day. one managed to keep hold of the yellow jersey after a strong performance in the mountains. >> i will keep taking it as it comes. tomorrow does not look as hard as today, but it is pretty tough later. i need to rest first. i am so tired.

>> this year's favorites kept their cards close to their chest on thursday, waiting and watching to see who wiggins' first. when luxembourg attacked, there was another half minute lost on the main contenders. a further toward a france victory is looking less likely for the spaniard. >> france is also celebrating bastille day to day, its national holiday, with the traditional military parades attracting thousands. this marks the storming of the bastille prison in paris on july 14, 1789, viewed as the start of the french revolution. >> of bastille day celebrations are always an elaborate display of military might. french fighter jets painted these guys and thousands recorded the regiments, marching

down the street. the death of five french troops in afghanistan a day earlier overshadowed the festivities. the president began the day with a visit to a military hospital in paris, where he strongly condemned the attack. >> the french soldiers were protecting the village gathering that aimed to facilitate the reconciliation of different groups in afghanistan. the attack was a terrorist act, not a military one. >> the day was supposed to be a happy one, dedicated to the overseas territories. the parade included musical and dance highlights from various groups, including a performance by soldiers from france's pacific regiment. but the appearance of fighter planes currently deployed in libya were another sobering reminder of a military intervention and has dragged on longer than expected. immediately after the military

ceremony, president sarkozy convened the security council for an emergency meeting to reassess the security of french troops in afghanistan. >> i will be back in one minute with more news.

>> germans have had it with the current government, from its unpopular bailout to its dithering on the shutdown of the nuclear reactors. a new poll shows 70% of germans are not happy with angela merkle's coalition, even though exports are up, tax revenues are increasing, and unemployment is at its lowest level in 20 years. what is the problem? eu officials have admitted some type of greek default is inevitable. that is in spite of billions in german taxpayer support. people are curious and are getting the impression they are being used as financial fodder for eu bailouts with no and

insight. here is a look of how people see team merkle as it reaches half term. >> summer in berlin, and many germans were cheering on their team in the women's world cup. in the and, the team disappointed, and that is exactly what many people feel about the current governing coalition as well. >> you would think they could word better together. i give them a yellow card. >> i am happy with them. >> they need to improve and do things with more dynamism. >> in my view, the only thing you can do with this government is send them off. >> if germans were to give their government a changing room peptalk, it would be harsh. 70% say they are not satisfied with the government's performance. only 29% say they are satisfied.

it has definitely been a weak first half of the year for the government. but coach angela merkle and her new assistant have not had it easy. two team members left the pitch and the captains had to switch around the team, trying to avoid relegation. in march of this year, the nuclear disaster in fukushima sent shockwaves through the government's nuclear policy, a game-changing challenge for the chancellor. >> as much as i committed myself last fall to extending the life span of german nuclear plants as part of our comprehensive energy policy, i have to say clearly to this house today that fukushima has changed my view on nuclear power. >> a tactical change. some cried foul. >> what do you think of the government's nuclear policy?

>> first exit, then extent? it definitely deserves a red card. >> there were jews from the stands as the chancellor and her center forward -- there were dears -- were jeers from the stands as the chancellor and her center forward presented a plan for renewable energy. >> it is this coalition moving ahead with this. at the moment, just 19% of our energy needs are covered by renewable. it is this coalition that organized the consensus we have now reached. >> players on the opposing team respecting feathers. after all, the government was suddenly pursuing policies the social democrats and greens put in 10 years earlier. many viewed the big change as an on goal. the government will have to deal

with displeasure at imminent changes to the german landscape. huge energy pylons did not go down well with the electorate. the next challenge came in the u.n. security council, where germany broke ranks with the u.s., france, and britain. there would be no german participation in the military deployment in libya. the majority of germans felt that was the right decision. only one in three thought germany was wrong to abstain in the libya resolution. 8% were not sure. this new tactic on the part of the german foreign minister caused a degree of irritation among european and transatlantic allies. it came under fire as a result. >> our problem is that as germany we no longer have a

common european role. we have not managed to keep all the european countries together. that is the point. >> spectators feel the overall performance of the foreign minister has been disappointing. only one in four germans is satisfied with his work. >> you do not really get the impression that he is certain anything out or doing anything for germany, or for international relations. >> the one thing he does fairly well is representing germany. >> he is the worst foreign minister we have ever had. >> the next big challenge -- the euro crisis. team spirit was needed to master this one across the whole of the european union, but the coalition played for time and ended up plundering the petty cash to pay for the bailout. >> if we do not pay the next tranche, there is a real danger

greece will go bankrupt. that would have serious consequences for the whole eurozone. >> a deal on saving the euro has to be in place by autumn, but there are growing doubts about whether throwing more money at the problem is the answer. germans are skeptical. only 10% believe greece will be able to sort out its economy even after the rescue package. a resounding majority say it will not. >> germany's debt is growing by millions of euros every day. at some point we will be in the same position. who will help us then? we need to be honest about the fact agrees cannot cope financially and we will need to write off their debt. there is no other option. the people in the banks need to be told the facts. but no one has the nerve. that is why a writ for the yellow card -- i reach for the yellow card. >> shortly before halftime, a

substitute in to the deputy chancellor position. the resorted to a practice strategy. >> what was crucial was to reach agreement on cutting taxes. we want to discuss the issue of progressive tax rates. we want to cut social insurance contributions. >> then came a counterattack from a teammate, the finance minister. he played offside. >> there are no secret reserves in the budget. the fact is, and this is a philosophical observation, the whole of the future is one big secret. >> the economy is booming. tax revenues are up. a perfect scoring opportunity for the ftp, which wants to seize the moment to push through

tax cuts. >> to hear them say it and would like to believe it, but at the end of the day it will not happen. >> tax cuts right now would be nonsense. that is a red card. >> it is too soon, shooting from the hip. a red card from me as well. >> germans are largely agreed on what should happen with the increased public revenues. only 24% want taxes to be cut. almost 3/4 say it should be used to reduce the national debt. no concept, no team spirit, and an unconvincing appearance over all. the spectators are harsh in their judgment of the government team, and there is not much on the positive side to balance out. the german women's world cup team disappointed their fans, dropping out of the tournament after losing to japan. but the government has another chance.

after this summer break is over, they will be back for the second half. there is plenty of time left before the final whistle. >> thank you for joining us. stay with us if you can.