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>> and now, "bbc world news." >> the sexual assault case against former imf chief dominique strauss-kahn may be close to collapse. the case is back in a new york court with a report suggesting prosecutors have doubt about their key witness. welcome to "gmt." also in the program -- the chinese communist party celebrate its 90th birthday. do mao and market capitalism makes? and well the king's political concessions satisfy his people? it is midday in london, 1:00

p.m. in paris and 7:00 a.m. in the morning in new york city where there has been another twist in the extraordinary legal case involving the former imf chief dominic strauss-kahn. he faces charges of sexual assault following accusations made by a cleaner and a manhattan hotel. according to "the new york times" prosecutors have grave doubts about the credibility of her -- and their key witness. a court in manhattan will consider relaxing the bail conditions imposed on mr. strauss-kahn. christian frazier is in paris. >> thank you very much. great anticipation building here in paris. everybody waiting to hear what the prosecution says in the the scheduled court appearance in new york -- on scheduled court appearance. there were not expected back until july 18 but extraordinary revelations quoting two senior sources close to the prosecution who investigated the key witness.

what they found is this woman had a close relationship with a drug dealer who has been convicted and is in prison. she had a conversation with him that was recorded a day after the accusations were made in which she stressed the importance of the case and the benefits of proceeding with the charges. it has been proven that the man in question put around 100,000 through her account along with others around the united states in the course of two years and questions that she lied in her asylum application. given she is the key witness, the prosecution suddenly has a major problem. already here in france, before the court case has been heard, on the basis of the report, the rehabilitation of dominique strauss-kahn is already under way. >> interesting you talk about the rehabilitation under way. what is the socialist party saying? he was tipped to be certainly the front runner for the

candidacy. socialists are looking elsewhere. it is a possible they could go back to strauss-kahn? >> it would be a comeback of some proportions. but i just cannot see, after everything that has been written and said over the course of the last two months, that he could possibly run. we already have three candidates and it is open for another two weeks. but there is the court's calendar to consider -- we don't know what will be said today or if the prosecutor " content -- still press for a misdemeanor. i spoke to a party member who was critical of the u.s. treatment strauss-kahn during his arrest. the frencht has always been prepared to forgive infidelity. this is a man, he said, who has shown great courage in the face of everything that has been thrown at him, shown great humility and also has not spoken out of turn throughout this

proceeding. in his eyes, his supporters will gather around strauss-kahn. whether he runs as one question, but it becomes back as a kingmaker he could play an important role. >> thanks for joining us on "gmt." we, of course, will keep the following event in manhattan in the courtroom throughout the day. let's take a look at some of the other stories making headlines around the world. lebanon's interior minister confirmed the names of four hezbollah members charged with killing of the former prime minister are really -- hariri. the government's efforts one now be made to arrest the four men. has blocked repeatedly denounced the tribunal and vowed to retaliate -- hezbollah has repeatedly denounced the tribunal.

do we have any idea where the men are? >> people say they don't know where they are and they don't expect the lebanese government to actually make the arrest. this is going through the motions. basically hezbollah is a dominant force in the government and to use their phrase, they will cut the hand of anyone who tries to arrest any of their members. no one is really expecting it to happen but authorities need to make it look like they tried, so when the legal processes go on after the 30-day period, that they won't be criticized by the tribunal and get into various tangles for not having tried. >> we are watching pictures that remind us of the assassination six years ago. it is incredibly inflammatory it -- an inflammatory, is an? the you expect political instability over the next few weeks as this plays out -- do you expect political instability? >> in january and february it was bought the tribunal would

give the names then, and people were afraid that it could lead to civil conflict in lebanon. since then, a government has fallen over this issue and another has been established. in a way, their campaign to discredit the tribunal has had considerable success. many did not consider it a legitimate body. that has discounted the impact the four names have had. you can't tell how things will work out, but at the moment it has not caused the instability people have feared. >> noticeably thinner and somewhat subdued, the venezuelan president hugo chavez. jigger appeared on -- appeared on television to announce he has been treated on cancer. -- for cancer. surgeons treating a pelvic abscess discovered a tumor and he said now he is on the road to

a full recovery. this report from caracas. >> and much thinner and frailer president chavez appeared on television in a recorded address, the first time he has spoken to the nation's sense taking ill in cuba a few weeks ago. he confirmed that many suspected -- that his health problems were more serious than the government previously admitted. >> doctors started immediately a series of special tests, cytochemistry, microbiology and anthology, that confirmed the presence of and access to more with the presence of cancer cells which made a second surgery necessary. he said his friend, former cuban leader fidel castro had been the first to tell him he did not look well. he underwent surgery for a pelvic abscess but doctors later discovered cancer cells and he was admitted for another

operation. >> this is a major intervention performed without complications, after which i am recovering successfully while i keep receiving complementary therapies to combat the various cells found and continue on the path to full recovery. >> the president insists he has been able to carry out his duties as head of state while he recuperates in cuba, and he has given no date for his return to venezuela. bbc news, caracas. >> the japanese government has brought in the limits on electricity consumption in tokyo and northern japan to cut the use of power by 15%. the move follows the crisis of the fukushima nuclear plant which was severely damaged by the earthquake last march. health officials in one indian state have come up with an unusual campaign to reduce population growth. men and women who agree to

sterilization are being offered prizes, including cars. india is expected to have the largest population in the world by 2013. the mediterranean city state of monaco will witness the marriage of its ruling france friday. prince albert and his fiancee, a former south african olympic swimmer, will exchange bows and a civil ceremony. it is expected to cost around $80 million. people and morocco are voting today on a draft constitution for a -- proposed by king mohammed, two weeks after he outlined plans to increase the powers of the prime minister and parliament. critics say the vote has been called to quickly to allow proper debate. our report from morocco's capital. >> waving their flags, wearing traditional costumes and playing drums -- moroccans campaign for their upcoming referendum.

supporters for the reform says the king has taken a great step towards a more open society. the king's reforms promise a stronger, more independent judicial branch, accountable government, and a focus on human rights and gender equality. >> as a moroccan, the new constitution is important because it included all of the issues. >> the draft constitution is a political revolution that will make the moroccan kingdom similar to democratic countries that were in a parliamentary system -- with a balance between the government, parliament, and the king. >> just a few feet away, these young men chanted -- the new constitution is a theatrical play. they, along with other political parties, have been strongly criticizing the committee in charge of overseeing the reform. they say committee members were appointed by the king instead of being elected. they also say the reforms are

being imposed from the top down. >> this new constitution brings nothing new. all it does is make the king's power even bigger and turns him into the ultimate decision maker. >> this man says he was one of the demonstrators who was savagely beaten up directly after the king's speech. it was when he first promised change at the start of the demonstrations. opposition groups such as the february 20 movement will continue to call for real change even after the referendum is completed. whether or not the referendum manages to give the moroccan king a short-term political victory remains to be seen. until then, both supporters and opponents are preparing for a vote on a series of reforms to

turn morocco into the first constitutional monarchy in the arab world. >> still to come on "gmt," - could this be the year of nd murray -- andy murray as it takes on nadal? the duke and duchess of cambridge will celebrate canada day on the second day of their canadian tour. they have already while the crowds in the capital during a walkabout -- they have already wowed the crowd spirit and it got off to a strong start. crowds have been large. the welcome has been warm and enthusiastic. particularly, of course, for

her. she smiles, taking it in stride, and poses for amateur photographs with a devotion that the light at amateur photographs. as he said in his speech in the welcoming ceremony, william is generally pleased to be here. >> catherine and i are so delighted to be here in canada. we have been looking forward to this moment for a long time. before we were married we had a longing to come here together. >> he tried a similar thought in french. [applause] >> it will improve as we go on. >> later, the dress code relaxed for a reception with young people, one of the recurring themes. somehow they got talking about university and who went to what lectures. it was all very relaxed, all very unlike what the canadians

have been used to from their royalty. and it will continue today on canada's nacional de at which william and catherine will be guests of honor. but for william there will be an added poignancy, because the first of july, 2011, would have been his mother's 50th birthday. bbc news, ottawa. >> this is "gmt" from bbc world news. the headlines -- the sexual assault case against dominique strauss-kahn, reports suggest the prosecution is concerned about the credibility of his accuser. the interior minister in lebanon revealed the identity of four hezbollah members accused of assassinating a former prime minister. aaron is here with all of the latest business news.

we cannot get away from greece. >> you did not think i would end the week without touching on it. just some breathing time for everybody. hello, there. back from the brink. greece is a set to receive more vital aid after it parliament passed the seconds of the austerity bills on thursday. the move now commit the nation to 28 billion euros of spending cuts and tax raises in the next five years and allows the eu and the imf to dispense more cash. but further efforts to convince existing investors to stay on board has won the agreement of germany's big banks and insurers. nigel has the details. >> while greece counts the cost of its austerity measures, the lenders are on notice they also will have to shoulder some of the financial damage. the next bailout expects the

biggest foreign holders, notably france and germany, the chip in by rolling over their loans. germany's institutions confirmed they will help to the tune of 3 billion euros. k chief has been working on a plan. >> we are taking the french bases of a model of building and modifications. we hope we will find a satisfactory solution for all the parties involved. >> this market watcher says the aim is to delay a greek default until europe can cope with the better. >> if there was a default, does it mean there will be a run on french banks or german banks will need to be recapitalized? the problem politicians have is they have to please the electorate at home. we have already seen it in finland -- government is getting voted out because the populations are unhappy having to put their hands in their pockets and having their taxes raised to pay for countries like

greece and portugal and ireland. >> persuading lenders to share the pain will only slightly reduce the potential bill for euro ministers who have to agree to a further great bailout almost as large as the first one. >> let's move on -- or stay with europe. the european union trade commission described it as the most ambitious trade deal ever concluded by the eu. a new free-trade agreement with south korea comes in effect today and it is expected to boost trade by tens of billions of euros every year and create a quarter of a million jobs in south korea. let's take a look at which sectors are going to benefit the most from this deal. in the european union, the pharmaceutical sector will see big gains from the deal. the electronic industry will benefit because the trade bill breaks down the tough regulatory barriers and south korea. in south korea, the winners will likely be the auto manufacturers because they will gain duty-free

access into the euromarkets. -- you market. as a paved the way for further agreements? the next bout is india and japan but the bigger the economy, the more difficult the deal. >> when we move on to the really big players -- japan, china, and the united states -- then that would make a difference but it will be much harder to negotiate. india is, again, somewhere in between. it doesn't have the systemic sycophants of the three i just mentioned. it will also be very difficult to get a strong deal with india because the indian government is not a reforming government and not likely to make the kinds of concessions to open their markets. >> let's take a look at some of the other business stories of this friday. u.s. treasury secretary timothy geithner insists he is staying in the job for the foreseeable future, despite reports he is planning to step down. the rumor comes at a very

delicate time. he has been warning of disastrous consequences if congress fails to increase the nation's borrowing limit. he says treasury will no longer be able to pay all of the nation's bills, including interest on the national debt, after the second of august. more evidence that china bought the economic growth is cooling off. two monthly manufacturing surveys pointed to a drop of the month of june. china hit by falling export demand from customers are from the world because the recovery is somewhat faltering, as well as beijing's attempt to curb inflation. let's take a look at the markets, starting with asia. in general, the markets are advancing. this is a big but -- mixed aboard but in general they advanced. investors took heart from the approval of of of harsh austerity measures required to receive further emergency loans. at oil prices dipped and china,

as i mentioned, reporting the manufacturing numbers are slightly disappointing. a quick look at european markets -- of course, everybody's still breathing that a sigh of relief. banks are in focus of the back of the french and german bank proposals. and we should know more on that next week. that is it for business right now. >> you packed a lot in. and we are going to go back to china. you talked about a cooling of the economy. well, china today is marked the 90th anniversary of the founding of the communist party. amid this of congratulation, president hu jintao deliver a blunt warning to comrades -- corruption, he says, could cost the support and trust of the people. he was speaking to thousands of party members in the great hall of the people in beijing. joining me from the chinese capital is our correspondent. martin, is the 90th birthday seen as an opportunity for the communist party to reinforce its

complete dominance inside china? >> i think in many ways it is time for the party to reflect, but arguably it has never been so popular as it is now. and one of the key reasons, one of the main reasons, is the country's remarkable economic success in the past 30 years. china is now the world's second- largest economy. and i think many chinese have bought into the idea. their lives have gotten better. where the communist party, of course, has not moved is the crackdown on dissent. and in the months leading up to this anniversary we have seen some of the biggest crackdowns against dissidents in many years. >> we have heard in the last year two premier wen jiabao talking about the need to acknowledge the importance of reform. are there others at the top of the party who no political

reform has to come? >> certainly there seems to be a debate within the party. what form the debate is taking is difficult to know. all of this is done behind closed doors. you are right in pointing out the argument is if you are economically liberalized, political liberalization will follow. that has not been the case in china until today. although within the party, there are car -- are calls for political reforms. but it is worth pointing out is what the party is talking about is democratic reforms within the party itself. senior officials have quite clearly ruled out there will be any western-style democracy here in china. >> thanks very much for joining us from beijing. it is men's semifinal day at wimbledon and bryn's number 1 murray is facing defending champion nadal.

history, as it has been said, does not favor the scot. but murray's confidence is high. james pierce is at the all england club. the enormous burden of expectation on andy murray today. bendigo into this match full of confidence? >> he is very relaxed. having the fans are more realistic than previous years. six times the british man has reached the semifinal and have gone on to lose. it would be nothing new to them if he does go on to lose. perhaps the present -- pressure is not quite so great because he is against the defending champion who beat him in the semifinal last year and in the french open a few weeks ago. he and his supporters all know what a big challenge he has. they don't expect him to win but

they would love it too -- love him to when did they know they have a chance. a special atmosphere. 10 or 50 minutes ago i walked past him as he was walking toward his practice court -- 10 or 15 minutes ago. there were guards clearing the path because there are thousands of spectators. an impromptu guard of honor with the chance of c -- chants of come on, andy. they are determined to enjoy it today. >> a brief point about nadal -- is there a sniff of hope because he had a bad injury? >> he has a foot injury. he is taking painkilling injection. he will not play for six weeks after this event. there is also a question about the fitness of murray who picked

up a fight injury in his last match. they both have a little uncertainty about them. >> we are almost out of time but there is another semifinal. where is your money on that one? >> it should be on djokovich. but then tsonga beat federer. >> before we go, a reminder of our top story. the former head of the imf, dominique strauss-kahn, accused of an attempted rape of a hotel maid is expected to appear in court later today. "the new york times" suggested the case against him may be close to collapse. that is it for us. thanks for watching and stay with us on bbc world news.

>> make sense of international news at bbc.com/news. >> 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 r wideange of companies. what can we do for you? >> "bbc world news" was presented by kcet los angeles.