>> this is "bbc world news." funding for this presentation is made possible by the freeman foundation of new york, stowe, vermont, and honolulu. newman's own foundation. shell. and union bank. >> at union bank, our relationship managers work hard to understand the industry you operate in, working to nurture new ventures and help provide capital for key strategic decisions. we offer expertise and tailored solutions in a wide range of industries. what can we do for you? >> and now, "bbc world news." >> just how safe are spain's

banks? eurozone turmoil spreads. the greek parliament has dissolved before elections that could have a euro exit. welcome to gmt. also in the program -- what has happened to the anti- poverty? royal.m in a rea it is midday in london, 7:00 a.m. in washington, and 1:00 in the afternoon and spain, which moves center stage in the unfolding eurozone crisis when

moody's downgraded 16 of its banks, pointing to alarming levels of debt. financial markets across europe have been spooked by deep uncertainty about the future increase in the eurozone and fears of contagion and should greece be forced out of the common currency. the impact on the global economy is set to dominate a leading of g-8 leaders hosted by president obama this weekend. >> as the's opening market -- asia's opening market falls. then a few hours later, the fear reflected in europe's markets with the index 5% down on the week. even with greece factored in, spain has now become a flashpoint. the ratings of 16 banks downgraded because of the deteriorating economy.

>> the bigger concern now is spain. a much bigger economy, much higher debt levels, a very fragile banking system, a government that is now starting to own part of the banking system, and an economy in deep recession. >> that message of doom is not welcome in spain itself. >> [speaking foreign language] >> it appears we have become the basis of all these speculators. it's very tough on us. >> the banks, the people who have created this mess are the businessmen and banks. >> america is said to contain the not gonna affect. the u.s. is just coming out of recession and president obama is facing reelection. >> a balanced approach that includes not just austerity, but

growth and job creation. when we discuss this with our european allies, we can point to some of our own experiences. >> the election of a new french president, francois hollande, has changed the debate. he has a powerful ally now in america. >> [speaking foreign language] >> the objective is that greece remains in the eurozone. one has to help the greeks and give them a signal. it's the only signal is given with the brutality of austerity without any hope for justice, the greeks risk being discouraged. >> now, the g-8 summit at the camp david presidential retreat.

the first to arrive, italy's mario monti, a low-profile technocrat who took over from a populist politician. his job, to stop italy from being the next in the euro crisis. >> we can now go live to our correspondent in madrid. tom, we have just been hearing that the focus of the crisis moved to madrid overnight with this downgrading of many of spain's banks. when spaniards went to work this morning, did you get a sense of crisis? what did the government say today? >> it is very interesting. you do not see the crisis in spain. you have to go looking for it. the banking crisis, you do not see that. there are the troubles of

bankia. obviously, share prices jumped back up again. there is some reassuring signs today. we expect the government will announce a restructuring plan ia.t week for bank it has brought in lots of reforms to try to reform the amount of money banks hold to try to cancel out the losses from the property market crash. the banks made a lot of that possible. they're still a lot of uncertainty about the position of the banks in the position of the spanish government. >> and terms of the politics of this, there's a relatively young government and spain, but with unemployment so high, presumably there's now an enormous pressure to get the economy moving fast. >> you are right. the spanish government has a

clear mandate here. it won a clear majority in parliament back in the elections in november. it has a mandate to change. it has gone for tough austerity. we have seen the debates across europe with the election of francois hollande in france. can there be a balance of growth and austerity or a combination of? clearly, they are going for austerity at the moment. we heard a lot of negative opinions toward spanish banks here. you can find those opinions in the street. spain need help the banks. banks lend to businesses so the economy can grow. we just come back from the largest wholesale market on the edge of madrid. his opinion is that spain has a credit crunch at the moment. it is a big problem for

businesses in spain. >> thank you very much for joining us on gmt from the spanish capital. we can go straight to business now with aaron heslehurst. spain is really the focus today. after the downgrade from the ratings industrieagencies, it le there would be intense pressure on the banks. things have changed a little bit. >> they have bounced back. after the banks were downgraded by moody's, some by one notch, some by three notches, the stocks did fall. they were under a lot of pressure. we saw a bounce back today. some banking stocks were up by 20%. we've known for some time there has been immense pressure on the spanish government to clean up its banking crisis. we have seen some action today. two independent auditing firms will look at the whole banking system to put it under a stress test and a look at individual banks to see how much money will

be needed to fill all these big black holes. it's good news that auditors in place. at the end of the day, it will still be a very ugly picture in terms of how many billions are needed. we also learned today that the amount of bad loans on spain's books is at an all-time 18-year high. have a listen to what one expert told me earlier. >> now around 8.37%. one of the worries -- the fact that they have independent auditors checking is a positive thing. the only problem with that announcement last week is the indication of less than $15 billion -- lee incredible. on top of that, you cannot forget the whole situation in greece and the potential impact that has on the current market environment, as well. >> eurozone turmoil continues.

it does not seem like a very auspicious day across the and atlantic to launch a public offering. we are talking about facebook. amazingly, people still want these shares. >> lot of rich people got richer last night. $38 per share, at the top of the range. we now know facebook as a company is valued at more than $100 billion. when google went to the markets in 2004, it was $23 billion. when apple went to the markets in 1980, it was only a mere $1 billion. with facebook with a valuation of $100 billion, it really has to justify the price tag. we know that general motors pulled out. at the end of the day for the story, many experts say this is a marketing revolution, a

revolution that has not happened yet, but it will. listen to this. >> these types of media revolutions occur maybe every 15 to 20 years. you look at radio, tv, the internet. social media represents not just a fine-tuning, but a completely new way that people are interacting, and interacting with their friends online. >> in two hours when shares hit the nasdaq, they are expected to soar in the first few days of trading. >> thank you very much. now to some of the other stories making headlines around the world. a new push to end world hunger is expected at the g-8 summit. eight campaigners are urging more money into be better targeted.

our africa correspondent has this report from malawi. >> it is not a famine or even an emergency, but just the usual hunger in one of the poorest countries. is she the normal size she should be? >> she is stunted. >> she is two years old and stunted by malnutrition. the damage could last a lifetime. it's a problem that affects nearly half of all children her age here in malawi. >> it makes me feel sad. we do not have to have these. >> today, some parts of africa are booming. the struggle is finding ways to rescue those that are left behind. the solution has to lie in

fields like these. for years, malawi has struggled to feed itself. that is changing in foreign aid is a big part of the reason why. the billions promised by western leaders do not always materialize, or the ndp in the wrong hands. on this front, outside help has made a difference. a few years ago, he was struggling to feed his growing family. today, thanks to a donation of fertilizer, seed, and good advice, his farm is transformed. >> [speaking foreign language] >> at the same time, it is also helping other farmers in nearby by giving small loans. >> aid can work. >> yes. >> britain alone gives a 90 million pounds per year to malawi. the country's new president calls the investment, not aid,

and calls for a time when that will no longer be needed. >> in a country like ours, we will have an opportunity like that to help us get to a point where we can create jobs. >> enjoying the african boom. >> that is some way off. colonel, under remains a daily threat -- for now, hunger remains a deadly threat here. >> coming up later on gmt -- something special from the southwest of england, where we will hear from my colleague. >> all the preparations and head of the beginning of the olympic torch relay.

>> save the children. months of warnings have failed to prevent the spread of serious malnutrition in the west african state of niger. the crisis, which extends across the countries has reached a new level and is moving to an emergency response. our world affairs correspondent has this report. >> alarm bells have been ringing, with its record crisis since last year when a record rainfall hit. aid positions have been trying to mitigate the impact. today it's estimated that over 6 million people are affected in niger. save the children says a rising number of children need nutrition. it is clear, the charity says,

that it's reaching a new level of seriousness. save the children says a quarter of the world's children are suffering from chronic malnutrition over and above the current food emergencies in africa. and says it is concerned that g- 8 leaders will shy away from making commitments to making sure children have enough to eat, but also the right kind of food and nutrition. >> mike woolridge there. u.n. secretary general ban ki- moon says he believes al-qaeda was a response will for two suicide car bombs last week near and intelligence -- near a military intelligence building. the united states is suspending most economic sanctions against burma in response to a series of democratic reforms. the measure announced by clinton will allow new companies to invest in burma.

restrictions have been relaxed. the first u.s. ambassador in 22 years has been announced. an arms embargo will remain in place. >> this is gmt from "bbc world news." i am stephen sackur. as greece dissolves its parliament, stock markets all across asia and europe over uncertainty about the future of the eurozone. the olympic flame has now been handed to britain in a ceremony in greece and tonight the torture itself will write in england. it will land in a special plane in cornwall. from there, it will spend 70 days winding its way around the uk, probably braving plenty of wind and rain. a colleague grew up in cornwall.

it seemed appropriate that we send him home. >> at the moment, we have an absolutely glorious summer day. looking out to the atlantic and talking to people in cornwall, many are thrilled for the beginning of the olympic torch relay. that will be tomorrow morning bright and early at 7:00. they also see it as a chance to tell the world about their beautiful landscape and also their culture. perhaps a lot to be watching do not know about the language. i've been finding out about that. in the 19th century, the cornish made their name all over the world for their money and skills. of course, they are shut nell. -- for their mining skills.

of course, they are shut now. you may not even be aware there is a cornish language. in year with one of the best speakers of cornish. when i was at school a few years ago, i was completely unaware of this. >> exactly. in my time, nobody ever talked anything about cornwall, the language, the culture, the history. nothing at all. only recently people started to realize they were losing this specialized entity that they started to do something about it. now the younger people want to see it -- a live, living language. the >> what is it close to? >> the structure of the language is very close to welch. >> let's start with the basics. please and thank you.

>> [speaking foreign language] >> you have to be doing my homework. an hour ago you told me i had to say, "watch the torch tomorrow ." [speaking foreign language] >> that is perfect. goldstar and keep learning. >> a bit of pronunciation and you will be there. >> that was a little bit earlier. joining me is michael. it can you speak cornish? >> no, i cannot. i still struggle with english to be honest with you. >> congratulations on being torchbearers. how do you end up doing that? >> what my friends nominated me. there's a selection process

after that. you can either select whether you are going to go forward or you can decide not to. they send you an e-mail. i was nominated through coca- cola. i thought it was spam. >> fortunately, you found out in the end. do they tell you what to do. do they give you lots of instructions about how to hold the torch? >> they send you lots of e-mail on where to meet. not too many on how to hold the torch. it's more of making sure you are in the right place at the right time. they send e-mail and texts. >> cornwall feels a long way away from london. are people interested in the games? >> yes, definitely.

there's a lot of buzz going on at the moment, especially because it's starting with the torch relay. everybody's getting very excited. >> everybody's going crazy about it. we have the world's no. 1 man and woman in britain. if they win gold, it will go nuts this year. >> you are going to be up bright and early. the timetable is incredibly strong. you are under quite strict instructions. >> yes, definitely. we have a very early start. we have to be very independent. yes, looking forward to that. >> best of luck to both of you. thank you very much. the golden plane lands this evening. the torch will arrive at about 7:00 in the morning. the triple gold medalist will start this enormous 12,000

kilometer journey. >> great stuff. thank you very much. he will be live in cornwall throughout the day on "bbc world news." if you want to see where the flame goes as it travels through the u.k., go on line. you can see bore it will pass through on our map at bbc.com/torchrelay or twitter. who exactly is fit for lunch with the queen? it has been exercising the officials involved in drawing up the guest list celebrating queen elizabeth's diamond jubilee. king of bahrain and others. let's go to windsor castle now. correspondent.

talk about the particular individuals on this royal guest list. >> the most controversial, the king of swaziland and the king of bahrain. the king of bahrain, his critics angry with the way the government has suppressed the campaign. the king of swaziland, feeling that his extravagant lifestyle does not fit with the poverty of the people there. they are going to be year for the launch today. the first guests are now arriving at windsor castle. the guest list has been drawn up in conjunction with the british government. this is a case of the queen deciding -- the guest list will

have been funded through by the government -- have been thumbed through by the government. buckingham palace has stressed that they invited all sovereign marks from around the -- sovereign monarchs from around the world. >> we have been talking about who is there. there's also a little controversy about one no show, as well. >> yes, the queen of spain will not be here. she has turned down her invitation on the advice over the spanish government over the brother thorny issue over the sovereignty of the gibraltar. edward and his wife are due to visit gibraltar as part of the world-wide jubilee celebration.

they were unhappy about that. she will not be here. >> any idea how many royals will be gathered at this lunch? >> yes, we are told there will onarchs here.gn mark they will all be sitting at round tables inside buckingham palace. at each of those tables, there will be a representative of the british royal family sitting with the guests. the dress code is lounge suits. >> thank you very much. a quick reminder before we go over our top story on gmt. stock markets in europe and asia reported further declines after a week of turmoil and uncertainty surrounding the euro. that is it for us. thank you for watching.

>> 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. >> this is kim -- about to feel one of his favorite sensations. at shell, we're developing more efficient fuels in countries like malaysia that can help us get the most from our energy resources. let's use energy more efficiently. let's go. >> "bbc world news" was presented by kcet los angeles.