♪ >> welcome to the "journal" he on dw-tv. i am brian thomas in berlin. >> i am steve chaid at the business desk. >> calls for restraint after north korean artillery fire killed two soldiers on the south korean island. >> police in europe arrest at least 10 people suspected of planning a terrorist attack. >> at a new book about the pope goes on sale at the vatican says the use of condoms to prevent the spread of aids may be morally justifiable in some circumstances. ♪

>> north and south korea have exchanged artillery fire after the north island near the disputed sea border, killing at least two south korean marines. officials in seoul said the skirmish began after p'yongyang warned the south to halt military drills in the area. the u.s. says it plans to consult with allies, including cha, to develop a measured and unified response to north kor's artillery attack on south korean territory. >> this amateur video shows yeonpyeong island after the north korean artillery attack. the images show plumes of smoke over the island, dozens of houses were set ablaze. without warning, a garage of shells stricken are the base as well as residential areas. people ran to seek shelter in bunkers. yeonpyeong lies close to the disputed maritime border

betweenorth and south korea. it has been a frequent sight of naval skirmishes. people in south korea expressed concern about the threat of an escalating conflict. >> i think there will be war with the north. i live near the north, so i felt threatened. >> i do not think there will be full-scale war. the government should take stronger measures. >> after a security meeting, the south korean president was quoted as ordering stern retaliation should the north korean attacks continue. but he also called on officials to prevent the situation from escalating further. the exchange has alarmed countries in the region, notay china, which is one of north korea's few allies. >> we hope that the relevant parties will contribute their share to peace and stability on the korean peninsula. >> for its part, north korea has accused the south of provoking the attack. in any case, this latest border

incident leaves relations between the two koreas that a new low point. >> for some analysis, we're joined in the studio by my colleague, an expert on the situation on the korean peninsula. you have just been to south korea and have been there a number of times. what can you tell us about this island that was the scene of the artillery exchange? >> i was on a similar island of the south korean coast filming. it is normally idyllic and beautiful landscape. but in this case, the island of yeonpyeong has been the center point of tension already for a long time between north and south korea. there have been a number of serious incidents on that island. in 2000 two, two military vessels were opening fire on each other, leaving more than 20 soldiers killed in that last really serious incident. i mentioned people who live there, they already live with a strong military presence.

more than 1000 south korean soldiers on this island. and they live with this threat of military escalation. >> why the sudden escalation at this particular time? >> it is actually not a sudden escalation. over the past mths, there have been a lot of disputes and tense movements, gunfire at the so- called the militarized zone. and there is the ongoing issue of p'yongyang's nuclear ambitions. many signs of tension. but you have to look at the internal affairs of north korea. there is a handover of power going on. there are physically weak, old dictator's trying to hand over power to the youngest son to the there's a lot of speculation on how smooth this handover pros and if there are rivalries of clans. that is probably part of this car and escalation. >> thank you for that analysis. the united states has 28,000 soldiers in south korea and has

condemned the north korean artillery -- artillery attack. china has called for, urging both nations to do more to contribute to peace. the nato alliance, the european union, and britain have condemned the north korean attack. the german foreign minister has expressed his concern and called for restraint as well. >> i am extremely worried about this latest development of the fact that force has been used as something that is very worrisome to us in europe. we appeal for moderation from all those involved so that reason and conciliation may prevail. we want to an kenoly appeal to those involved to know act and respond calmly. >> the german foreign minister there. in other news, police have detained 10 suspected islamic extremists in belgium, the

netherlands, and germany. there will to a terrorist cell that was appointing an attack and belgium. there were also reported the reporting -- getting members for its shares provide chechnya. it follows a long-running investigation. authorities have rejected any link to recent terrorist warnings in germany. the european union has called on ireland to keep its budget on schedule so the country can access much-needed bailout funds. the eu monetary affairs chief said it was essential that ireland adopt this austerity budget on time in decembe© during a parliamentary session. the main opposition party called on the prime minister to bring forward the announcement of the 2011 budget to next week. the challenge was rejected as well as calls for a snap election. the embattled prime minister said he will dissolve parliament next year after budget proceedings are complete. over to steve. the german chancellor has been talking about the economy here

and the larger eurozone. >> yes, chancellor merkel has reiterated her support for the euro. she is facing a bill from german industry. she has highlighted the serious challenges facing the single european currency in the wake of the financial woes facing ireland and greece. speaking at the annual conference of german employers, merkel said the eurozone is in an extraordinarily serious situation and reemphasized the importance of restoring adherence to the stability and growth pact. meanwhile, the message from employers tohe chancellor was the german industry news the government to create a better business climate to help foster the economic recovery here. >> this cell phone controlled mini copter provided it amusement for delegates during breaks at the conference. but representatives from industry and more than just executive toys to smile about this year.

>> we are now creating new jobs, and the fall of unemployment is the first payck for all our efforts. >> the both business leaders and chancellor angela merkel are worried about the shaky state of the eurozone countries. as an export-driven economy, germany needs a stable currency and structures to keep it that way. >> we will make sure that the current crisis response mechanism, which we support in its present form, is replaced by a permanent system. we want more responsibility from those who earn a lot on certain government bonds. i will continue to insist on that. >> the head of the german employers' association called for harsh sanctions on eu countries to break the rules on financial stability, saying the

situation in some states was jeopardizing germany's economy. >> the european union and international monetary fund inspectors say greece has made enough of an effort to meet its 2010 deficit target to qualify for the next 9 billion euros installment of its emergency loan. greece will narrowly missed the target but pledged new fiscal measures to comply with its 110 billion euros bailout. meanwhile, a greek citizens continue to express their dismay at the austerity measures. >> strikes have become a common occurrence in greece recently. on tuesday, public-sector workers were out on the streets of the capital, athens. there were protesting cuts to their pay as part of the austerity package. many in greece say they're not prepared to shoulder the burden of the financial crisis. >> by cutting wages and benefits, the workers have no

other choice than to take to the streets and fight for what they have lost. >> strikes have hit most aspects of daily life in greece. ferry services between the mainland and the aegean islands were brought to a standstill again on tuesday. garbage has been piling up on the streets as workers at the municipal collection company have been on strike for several days. >> in germany, consumer confidence has risen to the highest level in more than three years. latest figures from the market research institute showed a bigger rise than expected, with people more confident of keeping their jobs and boosting earnings. that is a very good news for retailers ahead of the christmas shopping season. on tuesday's market action. german shares retreatedor the second day. amid renewed attention on the korean peninsula and continued concerns that europe's a debt cris will continue to spread. our correspondent says this summary from frankfurt.

>> investors did not manage to respond positively to a lot of positive economic indicators this tuesday. the gfk index for consumer climate came in stronger than expected. and the purchasing managers' indices for germany and eurozone, also. and the u.s. gdp for the third quarter was revised upwards to 2.5%. still, the news that artillery fire was shot from north to south korea overcast all of this. what also might have played a role is that the thanksgiving weekend in the united states is coming nearer. american investors are refraining from any risk ahead of this. >> all right, we stay in frankfurt for a closer look at the numbers. the dax index finishing sharply lower at 6705. the euro stoxx 50 experiencing an en more dramatic sell-off, sliding all the way down to 2739 points.

new york, the dow jones experiencing triple digit losses in the last hour of trading. the dow down at 1124. and the euro also down against other major currencies this tuesday. trading at a value of $1.3369. the german economy continues to grow, albeit at levels below the record numbers scored earlier this year. a rate of 2.3. sun was at the good news. gdp growth has slowed to just 0.7% in the third quarter. analysts say that exports continue to drive the german economy, but domestic consumers have also been doing their part by increasing their spending. back over to brian. >> flags in cambodia at half mast today. cambodians are mourning the 380 victims stampede in the capital. families arrive tiberi victims and pray with family members.

it occurred on the narrow bridge to an island where festivities were being held to mark the end of the annual water feival, which was attended by millions of visitors. pope benedict's statement that the use of condoms is sometimes morally justifiable to stop aids is valid not only for a gay male prostitutes but also for heterosexuals. that clarification has been called groundbreaking by some theologians, although the vatican says it is in line with the magisterium, the church's teachings on moral issues, and it has to do with actions of conscience and not with condoning enter marital sex and the use of condoms. it came at a news conference to launch the pope's new book. >> new insight from the pope's book have sparked plenty of discussion, some even consider the pope's, as revolutionary. it is based on interviews between pope benedict xvi and a german journalist.

>> for many years, i have seen a huge discrepancy between who this pope is, what he does, and what he says versus how he is reflected in the media. much of the media, though not all of it. >> pope benedict xvi has been considered an unwavering voice of conservative thought, especially questions involving sexuality. but in the book, he says condoms are acceptable in exceptional cases, like preventing the spread of aids through prostitution. until now, the pope had consistently opposed the use of condoms. but now the pontiff appears to be increasingly addressing the problems of the modern day, and he has even said he would consider resigning if he were no longer capable of meeting the duties of his office. meanwhile, the journalist says readers and not just focus on

the pope's comments on condoms, but also on his message on problems around the world and in that the church. >> the world's last wild tigers are close to catastrophe. that is according to the russian prime minister vladimir putin. he issued a warning at unprecedented summit aiming to save the animal from extinction. the global tiger summit in st. petersburg is the first-ever meeting of world leaders devoted to saving tigers and has worked out a plan to double the numbers. >> a century ago, an estimated 100,000 tigers still live in the wild. today, as few as 30 two hundred remain. the big cat's dwindling numbers have been the focus of an unprecedented summit in st. petersburg. >> this is not just about the tiger. it is about our understanding as government leaders how important it is to protect nature.

>> vladimir putin has announced tougher penalties for poachers and smugglers. russia also plans to partner with china in setting up a protected zone for the animals that spans the two countries' borders. china is one place where the booming trade in illegal tiger parts which are thought to bring good luck or have medicinal properties. >> we have to react, work together, and decide on concrete steps to save the tiger. >> but the clock is ticking. experts say if countries do not act now, while the tigers could become extinct within a decade. >> here in germany, winter has moved into the country. heavy snowfall caused chaos on some roads. trucks getting stuck in cars skidding off into roadside ditches. to rogers around freezing.

several centimeters of snow and icy roads, too. the weather may be rough, but the economy in germany is looking good. i will have more onhat in one minute. do not go away.

>> welcome back. the german economy has had a surprisingly good year. the hundreds of billions of the government spent on it stimulus packages to save the country's banks and deal with the financial crisis seemed to have paid off. orders and exports are up. companies are hiring again. people are investing in germany. consumer confidence is also back just in time for the traditional christmas shopping season. we will have more on the set of the german economy in just a moment. but first, we went out onto the streets toalk to people about how they see the economic upswing and what impact it is having on their lives. ♪

>> did you notice the upswing? >> you see it in the mood of the people. there is a good feeling now in germany. >> i am happy for everyone who is doing better and find work again. >> my family has not noticed it yet, but the business is doing much better than last year. >> you can see people are spending more. >> yes, they're spending more. ♪ >> you always tried to give a lot at christmas. it has nothing to do with the economic situation. >> my family always has enough. >> i would say about 200 euros for the family. >> at christmas, the kids should always get me presence as a

reward. -- should get some presents as a reward. ♪ >> we are an export-driven economy, and we will profit from china and other asian markets. >> i hope it always goes up and never down. >> germans are hard workers. that is why we're doing well. >> it will keep getting better. >> we hope there will be less unemployment. 7so that people have more and can spend more. ♪ >> well, that increased consumer confidence has played its part in the economic recovery. the german economy looks set to grow by more than 3% this year.

coming so soon after the financial crisis, such numbers are impresse, especially when so many other countries are still struggling to emerge from the global downturn. spain, portugal, greece, of course, and now ireland have all taken severe knox and is still in the doldrums. germany, by contrast, is beginning to look like a poster child for recovery. some nations criticized germany's trade surplus iwhat they say is an old reliance on exports. there are also fears that aid packages for countries like greece and ireland could put a damper on german growth. but for now, the numbers are looking very good. >> germany's economy is running smoothly again. from retail to industry and construction, and germany is back in business. the upbeat sentiment is reflected by the institute's survey of german business

confidence. german companies are confident in getting close to reaching record levels after bottoming out in 2009. large profits in full order books are helping to shape the german industry's positive view of the future. products made in germany are in high demand, particularly abroad. germany is the second strongest exporting nation, and exports are expected to increase even more this year. but domestic consumption is also growing. germans are buying more. and so doing, making their country less dependent on exports. this year finally saw domestic demand exceed export growth for the first time since the lows of 2009. domestic demand actually helped spur economic growth more than exports. private consumption is expected to have a bolstering effect on the german economy. contributing to that is the good employment situation with more and more germans finding work.

germany's unemployment rate is the lowest it has been in 18 years. and german workers have also been getting pay raises this year, putting more money in their pockets. and they are spending it. consumption has been growing steadily throughout the year, a trend leading economic institutes expect to see continue. experts are predicting that next year will see net wages rise yet again, while unemployment numbers go down. this will give consumers confidence that they will continue to have more spending money. retail is already looking forward to a busy christmas season. >> one sector that will also be looking forward to brisker cells that christmas is the advertising industry. during the downturn, advertisers have had a hard time trying to persuade consumers to part with their money. for much of the last two years, many have responded by focusing on affordable products and services. but the signs now that this is

starting to change. advertisers are beginning to make more use of the internet, and habits made popular by social networking sites. >> commercials are particularly good at seducing, persuading, luring. at least, they were in the past. but during the financial crisis, consumers saved their money and were less susceptible to ads. stinginess is sexy was a successful slogan in germany in the predominant sales strategy. throughout the crisis, a german consumers could only be lured by rock-bottom prices. that is slowly starting to change. >> quality is becoming increasingly important, and longevity is an important factor for most products. there have been some changes. but the price will surely remain the main focus, especially for us germans. >> [speaking foreign language]

>> the act applies that show- off's are still out of fashion. commercials increasingly feature ordinary, everyday people. >> the image of certain companies and that of people working in advertising was never as bad as it is today. it suffered markedly over the last few years. it is because many people are blaming communication. >> ads are beginning to speak directly to this loss of trust. >> [speaking german] >> new strategies and new channels are luring companies to invest billions in internet and

social networks. personal recommendations are the new game in town. >> product recommendations are the best thing ever. if a friend tells me that car is good or that one is not, i listen to what he says and at least take a look at the car. >> consumers were not the only ones hit by the crisis. agencies also suffered. >> let's make ads fun again so commercials become part of our culture once more. >> a new wave of entertaining ads have already hit the internet. >> [speaking german] [doorbell rings] [screams] >> advertise are optimistic and

businesses up. with luck, this could be the end of the crisis for the advertising industry. >> that is all for our "in depth." thank you for joining us. stay with us. ♪ captioned by the national captioning institute --www.ncicap.org-- ♪ ♪