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wide range of companies. what can we do for you? >> and now, "bbc world news." >> hello and welcome. >> the headlines. a united front, germany and france propose new measures to tackle europe's debt crisis, but will it work? more grief for the murdock, news says phone hacking was regularly discussed at the newspaper. >> could gaddafi's days be numbered? libyan rebels say they control most of the town of zawai and thousands of protesters flood the streets of india after an anticorruption activist is arrested. it is 9:00 a.m. here in sing more. >> it's 2 a.m. here in london. broadcasting to viewers on pshes in america and around the world. welcome to "newsday."

>> germany and france have called for much closer financial integration in europe to zone with the -- deal with the debt cry by -- crisis but even as they were meeting in paris there was grim news about the german economy which grew less than expected in the last quarter. investors didn't seem reassured by the leaders' proposals. the euro fell as did the u.s. stock market. from paris, our europe editor reports. >> the two key leaders of the euro zone met in paris today knowing they needed to restore confidence in their ability to fix europe's debt crisis. but the day began with some discouraging news, germany, the engine room of the euro zone, with a stellar manufacturing sector, saw its growth sharply reduced. >> everybody was expecting that germany will have a very good

year. so we are really deeply surprised and concerned about the german figures. >> in the past three months germany only managed growth of not .1%. for the euro zone as a whole, growth is bumping along at just .2%. when chancellor merkel met with president sarkozy, they agreed far reaching changes to the euro zone. there will be much closer economic integration including limits on debt. and although many details are missing, the french president spoke of economic government with an elected president. >> our first proposal is to create a real economic government for the euro zone. it will be made up of heads of state and government that will meet twice a year and more often if necessary. it will elect a stable president for 2 1/2 years.

>> some had argued that the only way out of the crisis was for countrys' debts to become common european debt with germany acting as the main guarantee or but angela merkel dismissed what are being called euro bonds for the time being. >> over and over again i feel people are looking for one idea, one fix that will solve everything and lift us out of the crisis and that is why people are urging euro bonds. >> despite all the talk here today about greater control and supervision of the euro zone economies, one big question remained unanswered. what happens if a major economy gets into difficulty? how will it be helped? how will it be rescued? and certainly the two leaders meeting here today made it clear there would be no new money for the current rescue fund. make no mistake, these proposals are a step towards a

closer union, sovereignty will be surrendered. but what was on offer today was a long-term political plan, not an answer to europe's current debt crisis. >> news international, fresh allegations suggest that the most senior staff at the news of the world knew more about illegal phone hacking than they've admitted so far. a letter from the newspaper's former royal editor, clive goodman, says hacking was regularly discussed at editorial meetings. >> clive goodman was once the royal editor of the news of the world. he was jailed in 2007 for hacking the phones of royal aides. but at the time of his trial, news international said he was just a rogue reporter acting alone. now, though, a letter has been given to parliament written by clive goodman to the human

resources department of news international shortly after his release from prison. in it he says phone hacking was widely discussed in the daily editorial conference until explicit reference to it was banned by the editor. he claims others new of his actions -- knew of his actions and he says he was promised he could return to a job at the paper if i did not implement cate the paper or any of its staff -- implicate the paper or any of its staff in my litigation plea. critics of news international says the letter raises more questions. >> i can only assume that there's been a coverup. this letter is absolutely devastating. clive goodman's testimony shows that he believes that others, every member of the editorial team, was aware of phone hacking and the police were not told about it. >> as for the company itself, it's released a statement saying it recognizes the seriousness of the material and is committed to working with parliament and the police in

their inquiries into illegal phone hacking. in a separate move it's looking likely that james murdock may have to revisit westminster to appear for a second time before a committee. some of his earlier evidence has been contradicted by other former senior staff at news international. >> forces loyal to colonel gaddafi continue to battle libyan rebels for the control of the town of zawai, rebels say they've cut major supply lines and senior figures in the u.s. government say colonel god's days are numbered. representatives of the libyan government have held several days of talks with rebel figures. our reporter says there's no sign of compromise on either side. >> there appears to be quite a bit of diplomatic activity but not a deal of diplomatic achievement, i'd say.

local media reports and other sources have been saying that on the holiday island which is near the libyan border, venezuelan envoice have been shuttling between a delegation from tripoli, apparently including the gas minister, and a delegation from the rebel side. they weren't talking directly to each other, though. also the u.n. secretary general's envoy has been here and i think he's been there -- i think his performance over the last three months of him doing the job shows how difficult it has been. he's been shuttling very busily between the two sides, he's been to tripoli i think seven times but he's no closer to bringing them together and that's because the job is really very hard to do and the two sides are away apart and it comes down to the same set of sticking points. the libyan government say they would like to have some kind of a deal, they're keen on a deal by all accounts but one that includes colonel gaddafi's staying in some guise.

but the rebels and their native backers are saying that colonel gaddafi has to go and then maybe they can talk about a deal. so that suggests to me that the question of who rules libya will be decided not by diplomacy but by the civil war. >> for more on the situation in zawai, i spoke to a rebel fighter who's from the city and wished to remain anonymous. >> basically the whole city is clear now. >> one side is totally free. the line between zawia and the mountains are all clear. they're not going anywhere, they're just guarding the city

and making no one coming in. the gaddafi forces, there's no more of them inside the city. most of them are indeed in the northeast side. they're using high buildings on that side and the northeast side. it's near the coast. and there's snipers trying to shoot everybody and they use missiles. all we do now is guard the exits of the city. there's another area in the city which is the hospital. the hospital base. and the forces are still in there, the gaddafi forces are still in there which make it difficult for us when we have to engage, the people who get

hurt, we can't, you know, take them to the hospital. so all we do is we give them first aid and small places which people made. >> syrian troops have opened fire on the port city for the fourth day. local residents and campaign groups say the machine guns sold have come to -- -- machine guns have claimed 34 lives. britain's foreign secretary has said president assad is fast losing the last strength of his legitimacy. another day of protests on the streets in india. >> that's right. a man was jailed because he was planning to starve himself to death, to try to force the government to tackle corruption. but news of his arrest brought thousands of people into the streets and a short time ago the police ordered his release but he is refusing to leave

prison until he is given permission to continue with his protest. >> this is exactly what the government had feared. an outpouring of public support for india's anticorruption crusader. his supporters do all they can to stop him from being taken away. the early morning arrest was meant to nip his protest before it got out of hand. in fact, it achieved exactly the opposite. this is the scene at the site of what was meant to be his planned protest. as you can see, the police are out in full strength, they've taken up position right around the perimeter of this public park. any protester who gets anywhere close to this area is being detained, herded -- herded onto a police van and taken away. bus load after bus load of supporters were driven off.

some tried to put up a show of resistance. others came streaming in. doing little to dampen their spirits. for its part, the government has defended its actions. >> we are not prohibiting a peaceful democratic protest. nowhere in the world is a protest allowed without any conditions. >> news of the arrest has brought more people out across india. showing their support and determined to have their way. >> this is india. india's a land of -- [inaudible] it will give a new idea that you can achieve whatever you want. >> [inaudible]

>> this is now a movement that's gaining momentum. and it may force the government to rethink its approach. >> in other news, thailand has announced new measures to protect tourists after five people died mysteriously in the a northern city earlier this year. the country's department of deceased control has promised to monitor bed bugs and other sprays used in hotels after three of the deaths were linked to chemical or pesticide poisoning. hospitals must also report tourist illnesses. you're watching "newsday" from the bbc. still to come, as the u.s. vice president begins a five-day visit to asia, we look at china's trade length with america.

>> and basketball is the first sport to be tested at london's olympic park. after weeks of protests, israeli members of parliament have held an emergency debate over the country's cost of living. netanyahu's government has been accused of dragging its feet. >> four weeks into this protest, at the height of the israeli summer, and tempers are flairing. outside the knesset, the israeli parliament, largely middle class protesters, showed their anger and disdain for the politicians inside. with national attention focused not on israel's long running dispute with the palestinians but internal economic issues, politicians debated the soaring cost of living. with many government seats empty, opposition leaders accuse netanyahu's right wing coalition of inaction. >> the latest has to provide a vision.

the nation elected representatives, not committees. the committees need to translate the vision to plans and numbers, that's fine. but they are not an alternative to the leadership that needs to lead this country. >> in cities across israel, thousands of protesters have taken to the streets. demanding change, they're fed up with the ruling elite and say their government is no longer listening to its people. and just like their counterparts in cairo's tahrir square during the arab spring, israeli demonstraters are counting out, vowing not to move until their demands are met. critics say that unrealistic, especially when there's a deeper global economic crisis. >> israel has the highest projected economic growth out of any country in the oecd for the coming year so you'd think people wouldn't be protesting on the streets but they haven't felt it and they're quite upset about it. >> deliberately nonpolitical, these israelis say the country is losing all sense of moral and collective responsibility. the government has promised to reassess its priorities and

tackle the high cost of housing, but even bigger marches are expected. >> good to have you with us. the headlines this hour, germany an france have called for more political integration in the euro zone. a proposal failed to impress the market. >> in britain, a former news of the world journalist says phone hacking was regularly discussed at editorial meetings. the u.s. vice president joe biden will arrive in china later for a five-day visit. the economic crisis in the u.s. has had a massive impact on china's export industry and mr. biden's trip will likely focus on ways the two countries are overcome the recession.

our correspondent reports from the congressional se in eastern china where manufacturers are worried about the future. >> merry christmas. >> it may be the middle of the summer but china's already gearing up for christmas. retail buyers from around the world flock here to choose this year's decorations. saleswoman shows me her company's best seller. despite the bleak global outlook, she says business is better than last year. >> we have customers and we move with the times. christmas is still like spring festival in china. everyone needs to celebrate it. >> christmas isn't marked here but the celebrations are crucial to china. and that's because as the economy thrivings on selling goods around the world. but the u.s. has long complained that beijing is

having a party at its expense. china exports far more to the u.s. than it buys in return. washington wants to reduce its huge trade deficit. >> what america was hoping is that china has got richer and that people have more money and more people can start buying goods and services from america that are made and produced in america. what china would like is for america to get out of recession, and for the export orders to start coming back to chinese manufactures -- manufacturers so they can start making money. >> as the world's largest exporter, many chinese manufacturers are worried. this factory saw its profits drop 30% during the global financial crisis. the company says it's now a better place to deal with any economic down turn. >> we're paying more attention to our domestic market to reduce our reliance on exports. in the last year we've seen domestic sales go up by 30%.

this way we can deal with a global downturn. >> but consumers here can't match the spending par fund in the west. china is hungry for more, it wants to become richer. but the jobs of these workers will continue to depend upon american demand. >> for more on vice president biden's visit i'm joined from washington by chang li, senior fellow at the brookings institution there. thank you so much for joining us. what do you think will both sides be hoping to come out of this visit? the u.s. focuses on politics but how important is the economy in these talks? >> well, each side has several pasts of issues in term of security, economics and also politics. in terms of security, u.s. is

concerned about china's organization. u.s. wants china to be more transparent in its military development and also concerned about the security of south china sea because china has the disputes with several countries include vietnam, south korea, japan, indonesia, etc. and also u.s. want china's cooperation regarding north korea nuclear proliferation an also iran. for china, particularly concerned about weapons sales to taiwan and china hope that the u.s. should reduce or even stop weapons sales to taiwan and also concerned about the military exercise. economic issues will also be an important part of the discussion, china is concerned about the investment, particularly china has $1.21 trillion of treasury bond in the u.s. it's very much concerned about security. for u.s. want china to be more more cooperative and continue to buy the u.s. treasury bonds and also to have more banners

that trade, rather than hoping that the china will appreciate its r&b. >> so, chang li, you mentioned about the south china sea disputes and the u.s. armed sales with taiwan, indeed a cause of tension for both sides. the hope that they'll be able to resolve these issues during this meeting. >> well, but of course both sides should listen to each other. and -- but also at the same time we should -- [inaudible] because both really need each other and economically, they are so much integrated. but also there are political issues because next year will be a political year for both countries, u.s. will have presidential election, china will have leadership succession and the vice president, whom vice president will biden will meet and spend time together, will be the successor to hue jing to you. the relationship to him is important. and also next year early on

will be the taiwan election which is also a very important event. >> a lot of topics to discuss for vice president biden and his counterpart in beijing. thank you so much for joining us. chang li, senior fellow at the brookings institute in washington. now there's been some action of the olympic park in london. >> it's almost a year to go to the start of the london olympics but the main site has seen its competitive action. six teams including the host have been competing in a basketball tournament at the olympic park site in east london. our sports editor was there. >> london's latest iconic olympic venue. the basketball arena. opened for competitive action for the first time today. for the 3,000 fans who paid for the privilege, it was the first real taste of what next year's games will feel like. so this is what greets you upon arrival at the olympic park.

airport-style security with metal detectors, bag scans and body searches. security officials say they don't want to spoil the fan experience but with the olympics such an obvious target for terrorists, security has to be a priority. >> it's no different from airports or anything else. i'm reassured that the security's there. >> it must be a stressful job obviously because you have a lot of people coming in. >> this week's event is also unfamiliar familiar territory for great britain's basketball players. next year will be the first time since 1948 that the country has entered a team. but london promised not to leave any white elephants so this 42-million-pound arena will be dismantled and sold off once the games are over. >> it's going to be exciting to actually be on this court and play in front of my friends and my family. playing in the olympics in your backyard is a big deal. so definitely going to be an

emotional time for me, yeah. >> basketball is the latest sport to be trialed with a year to go. over the last month sailing, beach volleyball, triathlon and road cycling have all hosted major test events. for london 2012 this dry run is crucial to planning for next summer. so how does the man in charge think it's gone? >> yeah, i'm very confident that what we tested, you know, will be able to move from, you know, a seven out of 10 to a nine out of 10 or a 10 out of 10. of course there are quite a lot of things that you can't really test in test events. the enormous crowds that you'll get at games time. >> china and australia made history today becoming the first teams to play in this arena. but this week won't matter if organizers miss the target next year. the test events london have been running over the last month are going well. but this time next year more than 1/4 of a million people will be coming onto the olympic park at the same time and of

course running runup events is one thing but running 26 olympic sports in one city at the same time is quite another. david bond, bbc news, the olympic park. >> and you've been watching "newsday" from the bbc. >> our main news, germany and france have called for much closer economic integration in europe to deal with the ongoing euro zone debt crisis. but the markets have been less impressed. the euro fell as did the u.s. stock market. and in britain there's been fresh allegations in the phone hacking scandal that closed down the news of the world. the former journalist at the newspaper said hacking was regularly discussed at editorial meetings. we'll have plenty more to come on both those stories and if you're onlike you can get in touch with us, both of us on twitter. the address this there on your screen. you've been watching "newsday" here on the bbc. good to have you with us.

>> funding was made possible by the freeman foundation of new york, stowe, vermont, and honolulu. newman's own foundation. and union bank. >> union bank has put its

global financial strength to work for a wide range of companies. what can we do for you? >> "bbc world news" was presented by kcet los presented by kcet los angeles.