>> tonight, on "world focus." >> we knew the world's economy was fragile, but today another shoe dropped. this one in europe. how far will the damage spread. in afghanistan, nato commanders are on the vergef another major attack. the first since president obama ordered more troops there last fall. and more fallout from that american air strike last september which killed dozens of afghan civilians. new evidence on what went wrong. and finally tonight -- let it snow is e cry being heard around the jap nez city of

sapporo as they turn out to behold the city of ice. >> from the different perspectives of reporters and analysts around the globe, in is "world focus." major support is being provided by roslyn p. walter and the peter g. peterson foundation, dedicated to promoting fiscal responsibility and addressing key economic challenges facing america's future. and additional funding is provided by the following supporters. good evening, welcome to "world focus." i'm daljit dhaliwal in new york. over the past few months, you have heard the warnings when it comes to the economy. we are not out of the woods just yet. and today, there was another reminder of just how fragile the world's economy remains. the problem has to do with deficits, specifically those of greece, portugal, and spain. they belong to a group of countries that are known as the euro zone, that is they use the euro as their currency. in the past 24 hours, it's become clear those countries are

so troubled their woes could not only impact the rest of europe, but reach american shores. in tonight's fleet focus, we want to help you make sense of it all, beginning with this report from germany's deutsche welle. the changing of the guard outside of the greek parliament is a long-standing tradition in athens. the guards are known for their iron discipline, the virtue many feel greek lawmakers could learn from. the country had huge debts and is on the verge of bankruptcy. analysts say this could spell disaster for the euro zone. >> if a country in the eurozone goes bankrupt, that might trigger speculation which means other deeply indebted countries could also be pushed into bankruptcy. they would have to pay considerably more on the bond markets. it could even be possible for them to sell bonds and that

could lead to bankruptcy. >> asaid from greece with its budget deficit of nearly 13%, spain and portugal could be under threat with 12% and 8% deficits respectively. so, the fear is that greece's debts could trigger a domino effect in the euro zone. could german or french taxpayers be called in to pay off the debts an save the euro? >> from an economic viewpoint, it could indeed be sensible for the long-term sensibility for the euro to consider whether it's wise to leave each country to its own devices. >> that would mean greece would have to stop financing public building projects or propping up its inflated bureaucracy by running up more debts. but many europeans believe that won't happen and are wondering whether countries like greece should be excluded from the euro club. greece says it's well aware the situation is serious and has vowed to get its budget crisis under control. greek officials also feel that

the worries surrounding the euro are exaggerated and reject the need for outside intervention. >> we don't need someone to come in and save us, we know we're responsible for cleaning up our own finances. the crisis is an opportunity for us to finally introduce a better tax system, one that taxes high earners sensibly. we're not a poor country. the public finances are in a poor state. >> it seems it's time for greece to exercise fiscal discipline, otherwise it could find itself in trouble with the neighbors. an update to that report by deutsche welle. today, law makers in portugal defeated a plan to cut government spending, instead opting to increase that country's debt. the move is expected to further unsettle world financial markets. now for the person we turn to whenever we want to understand the world's economy, he's marcus mabry, the international

business editor of "the new york times." welcome back to the program. nice to see you. >> good to be here. >> explain to us why greece and spain defaulting on their debt will affect other countries, not just in europe, but the worldwide economy. >> well the fear here, and it is only a fear right now. the markets react to fear. it's not a reality of default. but the fear is both countries are highly leveraged. greece, they spent too much. social spending is too generous, the debt is too large in the case of spain, there was a huge housing bubble as we had here in the u.s. that has deflated as well as all their public social spending costs. that's created a national debt problem there. portugal is a similar situation. so you have a division between what they are calling the core economies in europe -- france, germany, switzerland -- and the economies are in much weaker states.

and there's bonds and other issued debt. it would create a massive knock-on effect that would spread not just throughout europe but potentially around the globe. >> could it also reach the u.s.'s shores? >> well, it's interesting. right now, the u.s. is actually benefitting somewhat from this. at least the dollar itself is strengthening, as people -- as investors flee to safer currency, and the dollar is considered a safe currency, a safe haven investment. whenever there's turmoil around the world, the dollar usually benefits from it. so that's a positive for the dollar. but long term, the united states -- we're talking about debt bombs. that's what we're calling these things, debt bombs, ticking time bombs of debt. the united states has a huge debt and it's growing. this year it will probably reach, according to the obama administration's own estimate, $1.6 trillion. that is a huge debt. now, the u.s. wants to bring that down over time. the administration projects to cut that in half in the next

decade, but can they actually do that? that's the question. no country can sustain this kind of debt. >> if these countries, greece and spain, end up going bankrupt, is this damage going to be confined to europe? or what will the ramifications be in europe? and how will it affect us as well? >> ramifications short-term in europe -- and again, you don't have to go to bankruptcy. you just have to get to a point where the markets don't have faith and the debt issued by those countries. the short term problem in europe would be almost certainly france and germany would have to bail out in greece. now, if it were to get to a spanish default threat, that's a much bigger economy. much larger than greece and portugal together, actually. that becomes a bigger problem. you might have to turn to imf bailout, which is scary for a developed industrialized nation. what this really shows if we look across the globe is asia, they have much less debt. china, for instance, is paying

down, retiring some of its debt. you look at asia which is so -- doesn't have this debt problem in the west which does, and you can see another example of how asia's economic might is going to grow. and how the west is going to continue to decline. >> all right. marcus mabry, thank you very much for joining us. >> thank you. >> that brings us to tonight's "how you see it." our question -- when countries get themselves in economic trouble, should the rest of the world bail them out? you can tell us what you think by visiting the "how you see it" section of our website. that's at worldfocus.org. in japan today, the president of toyota apologized for the problems that led to the recall of more than 9 million cars worldwide. acknowledging that my customers are wondering whether their cars are okay. toyota chief vowed to do whatever it takes to, quote, regain the trust of our customers, end quote. ecifically what the company ay plans to do about an alleged brake problem in some makes of the toyota prius.

the latest toyota model to come in to fire. we heard from a lot of you in response to yesterday's "how you see it" question, when we asked whether you would still buy a toyota after all of the bad news. in our admittedly unscientific poll, it was mostly good news for the japanese carmaker. anthony wrote, of course i would purchase a toyota. they will fix the problem and go on to making terrific cars. and joe told us, i have three toyotas and wouldn't buy another brand. he went on to add, this recall is overblown. nato commanders are signalling they're on the verge of signalling they're launching the first major offensive in

afghanistan since president obama ordered more american troops there last year. some 15,000 u.s., british, and afghan troops are expected to take part in the operation in helmand province. as we found in this report found late last night, the british are bracing for more casualties in a war that's already proved unpopular. >> reporter: this was operation panther's claw, the british offensive in helmand last summer which left so many soldiers dead that it sparked new debate on whether the cost was worth it. today the minister of defense braced for a new offensive which when it begins will be called operation mashtarak which means together in pashtun. in troop numbers, it will be roughly double the size of panther's claw, and british commanders say their forces will play a central role. the m.o.d. says the operation is high risk. the subtext -- prepare for more casualties. today, turo cathedral saw

captain daniel reed laid to rest. a 31-year-old bomb disposal expert with the royal logistics core in helmand. it was a roadside bomb which killed him. such devices are accounting for all six brish deaths in the last three weeks. the new offensive centers on the town of marja in helmand and up to 15,000 british, american, and afghan troops are expected to ke on the taliban there. it believes it area shelters between 600 and 1500 militants, including 150 foreigners. >> the afghan national forces and isap are preparing a major operation in centralelmand that will further separate the insurgents from the population and enable the afgn government to deliver proper governments and offer the alternatives. >> last friday, british and afghan troops killed three

insurgents in the town of lashkaga. commanders insist that afghan troops will play a greater role in this new offensive than ever before. and there's a new emphasis on avoiding civilian casualties. though commanders admit that some taliban fighters could slip across the pakistani border. >> that was jonathan ruddman for icn. we want to bring you an update on a story we first reported last september. it's about that nay major air strike in the northern afghan province of kunduz whichilled 140 people, many said to be civilians. as you recall, an american fighter jet struck after being called in by the german commanders on the ground. now serious questions are being raised about the conduct of those commanders. >> reporter: american pilots call it going kinetic, the moment they release their bombs or rockets on a target.