damage the living standards to such an extent that they now want to acceptable so i'm beginning you know i'm not the lone voice anymore in this place but these policies are mad now greece is not alone in this situation we have a double dip recession now in portugal italy back in recession is the e.u. ready or even able at this point to be able to battle out all the states that are in dire straits briefly what i think the point about greece is that this is the second biologicals that we're talking about but she only comes to choose three percent in terms of size of the eurozone economy if we get to insulate we get to one of the biggest countries in the eurozone and in the european union and i don't think then we can print or invent another money to buy out italy italy is where this will end all right we have to leave it there nigel farage m.e.p. leader of the u.k. independence party thanks for your insight. take a look now at some other stories making headlines across the globe beginning in honduras a disaster at least three hundred prisoners killed by a fire sweeping through

a jail tuesday night they were either burned or suffocated to death some inmates managed to escape breaking through the roof jumping out from the building an electrical fault is thought to have caused the blaze. in turkey police use rubber bullets and tear gas to disperse a group of fifty people tossing molotov cocktails in the streets in the city of they're demanding the release of abdulla who is the founder of the outlawed kurdistan workers' party or p.k. k. who's facing the death penalty turkey the e.u. and the us regard the p.k. k. as a terrorist group two turkish soldiers and sixteen kurdish rebels have been killed in the past few days as tensions rise on the anniversary of his capture. nato has admitted its recent airstrike in afghanistan killed eight civilians the attack happened a week ago in a village northeast of kabul and has outraged afghan officials this in the wake of the latest u.n. report indicating the number of civilian casualties in the decade long war rose last year compared to two thousand and ten. returning now to the anti-government

rallies in the arab world last year protesters in bahrain thought they got what they wanted after being promised reforms including among the police but a year later activists trying to mark the anniversary of the uprising found the crackdown as harsh as before only difference this time around some tactics and arms the police used were brought from the west by those supposed to bring democratic change or bennett has more. tear gas and stun grenades supposedly the work of a reformed police force but one year on since the first anti-government protests were crushed in bahrain it seems not much has changed the only difference now the crackdowns been planned by one of britain's former top cops john the ates used to be assistant commissioner of london's metropolitan police he now works for bahrain's monarchy which says he's there to oversee police reforms the police have borrowed or behaving despicably their latest trick is to throw cancer tear gas into

homes of people they don't like shut the doors and people have died choking to death tear gas of use out of doors and i think for any british police officer overstimulate is retired to be associated in any way with that is it's his role yes resigned from scotland yard last year an early fictive of the phone hacking scandal he popped up in bahrain in december as part of the regime's p.r. campaign to clean up its image a campaign pushed hard it seems by yeats himself he recently told the daily telegraph his new charges had a well rehearsed plan for the anniversary of the uprising adding the concept of reasonable reaction to provocation has been reinforced. as for the uprising itself he said this isn't organized protests it's just vandalism rioting on the streets claims hotly disputed by london's bahraini community i mean you get thousands and thousands of people. demanding their rights. you seem to forget

sixty or sixty five people actually died from police brutality activists in bahrain insist their protest was peaceful their aim to reach the iconic pole roundabout in the capital manama they say they were met by tanks toxic gas and rubber bullets what we witnessed on the as not. the front of. this previously but it's been extended through the toxic gases and use of poisoning. mr john contributing we should see a positive things on the ground what we're seeing today is nothing acceptable it may not just be british tactics bahrain's using but weapons to government figures show the u.k. sold over one million pounds worth of rifles and artillery equipment to bahrain

from july to september last year long after blood was spilled that's despite insisting all licenses had been revoked as for yates his contract runs until april by which time he hopes to put in place concrete reforms on this evidence that seems a long way off either bennett r.t. london korean joins us next with the latest business news stay with us here on r.t. . thank you matt hello and welcome to business here in r t thanks for joining me as we've been reporting iran is denying reports it's cutting supply to six european countries earlier iran's state run press t.v. said the country was halting supplies to spain italy france greece portugal and the netherlands they call this cause prices to jump to six months high let's look at the figures now called all futures rally to the best level in five weeks light sweet is trading below one hundred two dollars

a barrel brant is trading at over one hundred eighteen dollars per barrel the euro is gaining a bit against the dollar after seeing some losses on tuesday and the ruble is high against both european and u.s. currencies following gains on the russian market stocks in the u.s. are mixed hovering between gains and losses dow jones gave up an already gain it was down thirty five points sharply after the opening bell major indexes have been poised for games until reports emerge that the e.u. finance ministers my own at least a portion of the next round of aid to greece. and here's europe where most markets advance on wednesday on better than expected growth data from germany and france and also amid signs of support from the region china and in other news the world bank president robert zoellick will step down at the end of his five year term which expires on june thirtieth. there were some markets closed in the black lifted by heart prices for oil both. six and it even let's check on the index well versed

in the my six as i've said most of the blue chips were higher oil majors were in the front line supported by stronger crude oil finished up under a percent spread bank ended higher as well the company finalized a deal to buy east european bank international truck make a buck the trend stocks fell over three percent after an unexpected thirteen percent jump on tuesday here's your getting which was are from alpha capital who is wrapping up the day for us. positive news today was the chinese pledge to hold asses denominated in europe so it's ruled the positive for the markets however it doesn't solve the greek problem. as far as market movers are concerned. the rising by four percent today is rule of the top story in local markets today yesterday's movers like severstal. energy transmission companies are more or less

flat. let a short drop of russian gas supply to europe spurred discussions on how to secure consumers from possible cuts in the future they have gas from export branch is that a big if says one of the ways it's increased storage capacity in the region. is a key. for security of supply for extreme situations like like to this winter so that's where we produce a program to. experience . between two hundred to three hundred million euros in the next five years to secure it opens. and that's all the business is for the cell but you can always find more stories if you just log on to our website r.t. dot com as business expo much.

of the.

resistance is not of politics but a culture. this could test. some. cultures of resistance. long martini.

wealthy british style. is not on the right side of the. market so why not come to. find out what's really happening to the global economy with max cons or for a no holds barred look at the global financial headlines tune into cars a report on our.

morning news today violence is once again flared up the film these are the images the world has been seeing from the streets of canada. giant corporations are old today. nine thirty pm in moscow these iraqi headlines iran says it's been considering cutting oil sales to six countries but wouldn't do so at the moment because of a cold winter hitting europe. syria's president announces a vote on a new constitution that would effectively end nearly fifty years of single party rule in the country amid rising turmoil. at rallies marking a year since the pro-democracy uprising in bahrain protesters face yet another harsh crackdown with police using tactics and weapons from the u.k.

. latest edition of art he's capital account coming up next stay with us. good afternoon and welcome to capital account i'm lauren lyster here in washington d.c. here are your headlines for tuesday february fourteenth the two biggest economies sat down to the table and missed an ongoing trade rift i'm talking about china's v.p. who is also next in line to president is in washington meeting with u.s. president barack obama at the white house as they do the diplomatic dance we've recently heard tough talk towards china from both obama and republican presidential hopefuls we will separate campaign rhetoric from reality meanwhile the eurozone meeting to talk about greece's bailout tomorrow has been cancelled meanwhile in moody's rash of european sovereign credit downgrades most were similar to moves we've already seen from other ratings agencies this surprise though was the u.k.

moody's is the first big firm to warn the u.k. could lose its aaa status it put it on negative outlook the heavily indebted u.k. is often left out of the euro zone crisis debt domino zone more look at how the chips are stacking up now and how they may topple finally our breasts the new mini skirts last week we talked about the headline indicator for the economy's direction but is that how things are breast implants really a better modern measure of economic mood will give you the evidence let's get to today's capital account. well folks we have a game changer today or it could be so the eurozone finance ministers were supposed

to meet tomorrow over greece's bailout after greece of course approved austerity measures reportedly they'll now hold a conference call the meeting was cancelled last minute reportedly showing the eurozone wants tougher guarantees from athens and here we were thinking and how you were weak this was a done deal once greece got this passed it was just smooth sailing from here it's really showing to us that economic solutions are a lot more complicated than they appear on the surface or than how they are portrayed in the press there's a lot of dominoes to get in order a lot that could topple to this wall of course we've seen more sovereign downgrades so here to help us figure out all of this is founder of credit write downs edward harrison in studio with us i'm happy to see you as always good to be here thank you ok so this new you know cancelling of the meeting when we thought this was a done deal with greece to me shows it to us shows the complexity of the situation

you know this was played as to the press and kind of i just think more broadly to the public as once greeks parlin monks once greece's parliament gets this through then this deals done and now you see there's all these other aspects they're set up there's the e.u. officials there's the i.m.f. there's the private sector creditors so what's the likelihood that this deal breaks down because of say private sector creditors wasn't that the deal will happen eventually mystic that it will happen because basically the alternative is an uncontrolled situation and so they'll do whatever it takes to at the last minute make it happen the rule in a day is as and you know both in the greeks what we've already seen that they have made it happen and then also on the german the fin is that. you know there are a lot of different constituents to get together there but again you know the alternative to getting the deal done is. the potential for a default credit default swaps contagion to portugal contagion to spain italy

excedrin so forth could private sector investors derail this deal they could potentially do real part of the deal i don't think i think eventually what we're going to see is a larger default i think the seabees probably will have to take a haircut i think that you know we're going to have to see greater public sector participation in the deal because we're not going to be able to get as much from the private sector as we initially had hoped oh gee what a shocker there and we're in the banks are going to make out better than everybody else even if there is a deal for refinancing though aig could not be over then i mean how many people how many private sector investors are going to take this to the courts and push for either c.d.'s or push for repayment or bonds of course i mean why would you do that why wouldn't you push for what you want i mean you want to get the best deal for your input for you as an individual the only investors that are going to actually go with this data are going to be the ones against whom the countries have leverage

like the big banks because those are the cons those are the the and it is that will be bailed out potentially if down the line and there's contagion with portugal etc and so forth so there's a quid pro quo there look you help us out you hook us up and we'll make sure that you know everything works out for you in terms of the long term refinancing operation by the e.c.b. in terms of bailouts going forward excessive and so forth sounds a lot sketchy to me you said you think this is going to go through because there's just too much at stake no one wants a default they will push this through why can't greece defaults and stay in the euro zone why is that considered to be you know two separate scenarios where you know the interesting thing in my default scenario. no pun intended originally was the right now you're there for you here default an area where you default scenario for the eurozone was is that the weakest that is. that would be greece and probably portugal would default but stay within the euro zone but we've gotten to

the point where basically the the mood the political mood will become so ugly as a result of the austerity measures that are being taken that the only solution i see as probable is a complete. removal from the euro zone because let's look at greece as an example right you stay in the euro zone one thirty six to the dollar is that going to be the sort of thing that is going to get your current account imbalance is that the sort of thing that's going to stop you from having more government deficits in the future no of course what you really want is you want to devaluation and the only way you can get that is by leaving the eurozone and so ultimately when the time comes after huge austerity that these politicians are going to it's not going to be the politicians that we see today is going to be much more extreme politicians much more nationalistic politicians they will have amended to do what's necessary for their people to stop twenty percent unemployment and they're going to

say we want a devaluation and they're going to go for the you know this is interesting because now we're talking about the political and the social and you know in the past when we've talked about this at work it's always been the banking crisis the financial crisis but now we're seeing more the political crisis and this social crisis and we've seen the political crisis so far papered over by technocrats ok will put technocrats into these governments to handle the financial business and the social unrest we've seen papered over with police of course on the streets of athens there's you know tons of police that are trying to you know do everything they can i guess to restore some kind of order but now that these are getting so big and we've you know papered over everything just to try and push through this financial agenda is it time to give these issues the bigger states the political and the social issues certainly in greece that that's the case and i think that what's going to happen is that going. who are the people who are saying let's do what's best for greece forget about everyone else let's get rid of unemployment let's stop

the riots in the streets those are the those are the voices that people will start listening to more and more and whether those voices come from within the party or outside ultimately what's going to happen is it's going to affect the political position of those in power you know you could see a splintering of parties you would see a reform you know more nationalistic extreme parties together to form a government but coming forward in the next few months there's a huge likelihood that we're going to see a new government and it's not necessarily in their interest to start the whole process with the exact same baseline as the old government they want to have some sort of difference this is why you should vote for us this is why you installed us we have a mandate to do x. and x. is to reduce unemployment and to stop this from happening do you think we're going to see that more broadly when there's elections in say italy and when there are other elections in other european countries where there is more of this nationalistic wave of politicians gaining steam but yeah definitely but the

question is how how does the economy have to go down before that happens you know greece is sort of the leading edge on this you know they have twenty percent unemployment spain is twenty percent unemployment also there their g.d.p. is in the cloud as much but i would look at spain as potentially a place where you could see nationalism coming to the fore as well and what about portugal this is something a country that we here compared to greece in terms of the situation it's in often but but what is really the deal in portugal i don't know that much about it basically portugal has a private sector indebtedness just like other countries that have her like are learned in spain and so they've had a very uneven recovery and i think in two thousand and ten they actually had plus g.d.p. and now they're going through a second round of austerity cuts and therefore. g.d.p. is going on employment rate is increasing so as far as the four countries

in the periphery that includes italy. or actually let's make it five including italy and spain they have the fourth largest amount of debt actually italy has more debt greece has more debt on the public sector. and ireland has more debt but are we going to see portugal look like greece and at that time i think the forward for whatever reason portugal is seen as the weakest link and they will probably be next in terms of a debt deflationary spiral the reason is because austerity is not a good solution what really happens is that cuts in the private in the public sector are met with cuts in the private sector because people in the private sector are indebted you know there's a high private sector indebtedness so when you cut over here suddenly the people over here who want to say who want to pay down their debt they have even less money

so what do they do they cut as well so get a clue. and the whole thing takes this cycle exactly is a really great point that you're making edward the one thing i want to ask you everyone talks about these common solutions that europe needs but as greece shows us you know very visually and very aggressively right now that's the situation in every country in the sense that greece's domestic politics are as different as italy's as germany's these are all different countries how in the world is there going to be one european solution that is going to actually deal with the situations in each of these countries. to do that is to automate the the fiscal integration you know i think that they're starting to try to move towards that that was you know if you think about the politics of california versus illinois versus florida or nevada those are states that have been hit hard by the fight it. crisis they have their own politics but you know at the national level

they're in civil we're insulated from that becoming a talking point because you know you have the fiscal transfers you have complete fiscal and political integration and so one of the keys for your going forward is to increase that that integration yeah we'll see if that happens a really quickly before we go i forgot to ask you about the u.k. that's really the standout from this moody's downgrade has all the other ones that happened from other ratings agencies negative outlook for the u.k. will it even matter their short term because even the u.k. has high debt i call this the u.s. in fact you know everybody else is doing so poorly and people want somewhere that safe to keep their money short term where they can print their own money so is the u.k. going to be ok really from the standard the short term the political reaction from oz born he's the chancellor is going to be look that means we have to double down on our own what we're doing in terms of austerity so short term it's going to actually be they're going to do the exactly what i told you before spain in the u.k. have the highest indebtedness of total debt is private and public sector together

so in an economy like the u.k. where you're cutting you're going to get cuts here and that's going to produce cuts over there so that's going to create a negative momentum but internationally because i've got to go further just mean in terms of the money going in there are people still moving cars because they can print through money that actually means yields will go lower so the reality is they're not in the same position as the eurozone countries exactly they can print money when the economy goes to the yields go lower and that's what's going to happen in the u.k. similar to the u.s. thank you so much for breaking this all down for us in a way that is very you know good and different at work it's nice to see you out of the united harris and he standard credit write downs. still ahead obama open the doors of the white house the oval office really to china v.p. to day but with the tough talk coming from obama and g.o.p. hopefuls to on china will separate fantasy from reality when it comes to the

world's largest economy but first your closing market numbers. well. it's technology innovations all the latest developments from around russia we've got this huge earth covered. wealthy british soil it's time to right let's go. to. market why not. find out what's really happening to the global economy cars a report on our. welcome

back u.s. president barack obama met with china's next leader today at the white house he's china's vice president xi jinping he's set to become head of the communist party later this year then take over the presidency in two thousand and thirteen now obama is reportedly having oval office talks with she this is usually reserved for the closest allies and the countries of course have an ongoing economic to fight over issues like trade and currency here is how obama played that one publicly today. but we want to work with china to make sure that everybody is working by the same rules of the road when it comes to the world economic system and that includes ensuring that there is a balanced trade flow very diplomatic said strong relationship with china is vital some other nice things it's a little more diplomatic than when he played to the state of the union crowd in an

election year just recently it's not fair one for manufacturers have a leg up on ours only because they're heavily subsidized tonight i'm announcing the creation of a trade enforcement unit that will be charged with investigating unfair trading practices in countries like china he singled out china there mentioned china four times during that speech we've heard republican presidential hopefuls like mitt romney do much the same as far as singling out china and saying similar to what president obama did there so here to separate campaign rhetoric from economic reality is an economics professor and author of this book what the u.s. can learn from china an open minded guide to treating our greatest competitor as our greatest teacher and thank you for being on the show are always happy to get your perspective on these issues so let's get straight into this from the top ok the currency manipulator thing the under valuing of the currency i have heard this forever from u.s. politicians.