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>> each has to be equipped with the appropriate tools take action in time, not when it's too late. >> hello and welcome to gmt with me, zeinad. angry protests and benjamin netanyahu orders the removal of a west bank settlement. and 2117 will be the next time venus moves across the sun's surface. what light does it throw on our universe? >> hello. it's midday in london, 7:00 a.m. in washington and 1:00 p.m. in brussels where the european commission has proposed new rules on how governments must deal with failing banks. with growing fears there will

be more shocks, the credit agency moody's has downgraded the credit ratings of six german banks including the second biggest lender. with the latest from brussels, here's matthew price. >> from royal rock and the royal bank of scotland and limaens and beyond, the banks collapsing continues to mount with governments picking up the tab. when this belgian bank was bailed out twice, it cost the government here billions, and that cost is still going up. when governments step in to save banks, debt builds up in the private sector and it's passed on ultimately to the taxpayer, and senior officials here are saying that must end. >> step forward the european official in charge of regulating finance. today he outlined a list of measures to help countries

coordinate bank rescues. >> we have to do two things, take emergency measures to deal with the crisis right now, like the one we have in spain, and put in place a long-term plan so we don't find ousts in this position again. >> ultimately what mr. barnya is proposing is a banking union for the euro zone rather than national governments being the backstops for their banks, the european union would be able to restrict what their banks could do and how they could do it. it would be shareholders and not governments who would take the hit if the bank failed. but even if governments greed to this, it wouldn't come into force for several years. too late for some of spain's banks who lent too much during the property boom and now need help.

seeking to calm fears that spain will not be able to do that. >> spain and countries like that considered an important, systemic part of the euro area are taking the right decision and are addressing the problems and are, you know, improving the competence of their economies. and those are good things to do. >> even in relatively prosperous germany, the health of some large banks was questioned. the ratings agent cri says though they are better off than many, they are exposed to new shocks, and the biggest shock to europe right now could come from spain. but if spain does need help in bailing out its banks, so far there's no agreement on how to lend it enough money. >> well, let's get more on all this. joining us more is -- joining us with more on this is chris.

the european commission has two things it's got deal with, the immediate crisis and then long-term. >> the long-term is because they want to try to ensure mistakes made in the past few years don't happen again. 2349 three years after october, 2011, the commission had to approve money for state institutions of $4.5 trillion euros. that's an enormous amount of money. and of course that amount of money going from states to banks and other financial institutions is other reasons why other countries have sovereign debt problems. so by solving one, you're creating another. so they are trying to break that destructive link. but they are under no illusion that there are you are intelligent measures needed to take place in spain to take

care of the problems of today. because the problems fall in protecting taxpayers money, things will take years to come to frew wigs. >> and big problems with big banks and in other countries. but no country in the european union however relatively strong is an island and immune to these shocks? >> yes. it speaks to systemic risk. if you ask in the euro zone, and the euro zone is in trouble, however strong your economy, you are vulnerable. that's why that agency has downgraded those banks. germany is the strongest economy in europe yet it cannot be completely immune to shocks from other countries, particularly if those shocks were to come from countries as big as spain. greece is about 2% of the

europe ann economy and spain, 11%. it's on a whole different scale. if spain were to have to ask for a bailout, and there are no plans for that at the moment, but i if it needed money from outside, that takes us into a whole new faze of this crisis. >> and from president obama and british prime minister david cameron last night when they were urging euro zone leaders again to try to find some way out of this crisis. whatever happens, whatever happens in brussels, there will have to be closer collaboration between nations, won't there? >> there is. the problem with the banking sector is the banking systems are increasing internationally across the board yet when they come into trouble, it is still a national responsibility.

so spain is responsible for spanish banks and so on. so now they want what they are calling a banking union where by those responsibilities would be spread across the entire currency zone. the proposal announced today are being described as a first step towards that. it's a pretty small step so far. >> all right. chris morris, thank you in brussels. thank you for giving me that update. let's cross to westminster and talk to my chief correspondent, norman. this conversation between president obama and david cameron, both of them very worried about what's going on. what can you tell us about what the two men had to say? >> well, we are being briefed. they called for an immediate plan to solve the crisis zone. the two men are no longer talking about a package that

can be putal together over the next two months they are talking about action now. that clear view that there has been enough talking and there now needs to be movement toward a coherent plan to restore market confidence, and i think what you're seeing is them looking ahead to the greek elections on monday then other elections then the european union summit and my impression is they view those three events as key benchmark occasions when it is hoped that the euro zone will be able to agree on a cope hereunto package to be able to resolve the crisis, because i expect some of the language coming out of berlin seeing it as viewed as being solved other years, but the thought is there's simply not that much

time fix this crisis. >> and the this will be put upon angela merkel. >> yes. when you saw this coalescing of president obama, francois hollande and david camera almost ganging up on angela merkel who is the one with political cloud to -- clout to convince them the market plan was serious. and the prime minister when he has his bilateral with angela merkel will be stressing to her the need for movement and not mere words, because i think the view is unless and until germany is prepared to put up money to underwrite euro bonds, it is unlikely the market is going to be convinced pivotal players like germany are serious about solving the problem.

obviously the u.k. is not in the euro zone around how far prime minister can as it were lecture the chancellor as to what she should be doing with german money. >> well, let's stay now with this news and let's join aaron with the business news. aaron, i mean, it sounds like president obama, sounds like he's saying get your act together and mario dragic is also saying he is fed up with what's happening. >> you took the words out of my mouth. we're not expecting any changes. what we will be watching and listening to closely is what mario draggy has to say. the e.c.b. does have tools. it could cut rates or buy bonds or it could pump more cheap money into the region's ailing banking system, t it's very

unlikely because as you said last week mario draggy said he was frustrated. i would have paraphrased the same thing but between the lines, he is fed up. he is fed up that the e.c.b. has done all the leg work to save the euro and they have pumped up the euro and it hasn't worked and he is also fed up that the e.c.b. he said actually can't fill the vacuum that's been left by the inactions of the politicians. and added that as the euro zone stands today, it is unsustainable. let's have a listen to what the experts are saying to me at the moment about the e.c.b. >> what the e.c.b. has done throughout the crisis has really been keeping the system on life support, providing enormous amounts of liquidity and buying time for policymakers to set out a road

map as to where the future of the -- will be. >> well, australia now. >> yes. [laughter] >> that's got the kind of gross rate most countries would be dreaming of. >> yes. through the roof. unbelievable. for the first part of this year, the first three months of this year, australia's growth came in almost double what we were expecting. 1.3%. but the annual rate the economy grew at 4.3%. it is an astonishing number and yes, it is mainly from the shipping business to the likes of china. what's interesting with these numbers is you and i have sat here and spoke about the legions outside of the mineral business other portions of the economy were weakening. but i can tell you the trend perhaps is changing, because

numbers have picked up in scientifical finance and all very importantly, household spending is also on the rise. let's have a listen to the australian finance minister who is sort of waving the flag a little too much but let's listen to him. >> i think these figures extend loudest possible message in the world that australia is the farrest performing country bar none. european countrys are going backwards, other developed economies with high levels of unemployment. australia has surged forward. in a remarkable way. >> and some will say australia continues to benefit from the sheer lack of geography, jiolji and massive investment, and that's kept it out of trouble so far. >> i know you're australian. >> it's gone through the roof! i've been out of there for 10 years though. >> i must remember that.

thank you very much indeed. aaron with our business news. now let's take a listen to the other stories making headlines around the world today. the israeli parliament has blocked a proposal to legalize a westbound settlement ear marked for demolition. the vote prevents an attempt to get around the ruling that it's built on palestinian land and should be demolished by next month. benjamin netanyahu was opposed to it and said he would dismiss any cabinet minister who backed the setlers. so basically to paraphrase that. benjamin netanyahu wanted the settlement removed from the westbound and this vote basically backs that. >> indeed. there's a showdown looming

between benjamin netanyahu and politicians further to the right. this rather small outpost had become the focus of that fight. the high courts, as you said, ruled the houses -- only five were built on palestinian-owned land had to be demolished. that was apoised by the settlement because many in netanyahu's own party said jews should have the right to build wherever they want, because they don't regard it as palestinian land. but netanyahu wanted to override the court ruling. but so now there's a showdown between netanyahu and those to the right who don't want anymore setlers houses demolished. i know benjamin netanyahu had

-- could there be fallout regardless? >> well, netanyahu basically decided where he wanted to make his coalition, it's now 90 members strong, so he has a huge majority. he could abandoned those further to the right of his own party. and he could go with a more centralist government that tries to seek a perhaps a future to deal with the palace and try to tackle it as an issue to settle in the west bank. he is of course very pro setler. he has said if these five buildings are to be demolished, he would build 0 more homes for setlers in place of those homes demolished. so it's interesting to see how he will go and under international law all of these settlements are illegal whether they are built on private

israeli or palestinian land,. >> thank you. that vote in the israeli parliament where pro-settlement voters were defeated. still to come on gmt, the jube lee party is not quite over for the queen. she is aamong commonwealth -- >> now india is expanding its engage meant that afghanistan and china also said it wants to play a bigger role in afghanistan in conjunction with russia and its central nation neighbors. the organize are discussing security issues in beijing including in afghanistan when the combat troops fleeve 2014. well, the bbc's michael bristow

is in beijing and has more on this. >> i think he's a shanghai manager and they are going to be meeting in beijing for a couple of days, because in a range of subjects mostly related to the members of this organization, the six members, russia, china, and four central asian countries, they discuss terrorism, international crime, and the rebuilding of afghanistan. those are all going to be on the agenda. but very new. something slightly outside of this immediate yum!. that's also because the two main diplomatic backers, and they have come under pressure, perhaps recently because of their restating their position that they don't support any kind of outside intervention and don't want to see any forced regime change.

vladimir putin when he arrived in beijing for this summit, he and the president hu jintao of china reiterated this position that they had for some time. >> that's michael bristow in beijing. in russia they have voted through a controversial bill that sharply increases fines for breaking laws of government protest. people could be fined for taking part in violent protests or drinking during sanctions. >> you're watching gmt from "bbc world news." i'm zeinda. these are the headlines. taxpayer exposure for failing banks, and the prime minister benjamin netanyahu ordered the removal of west bank settlements. now here in the u.k., queen

elizabeth ii's diamond jubilee celebration isn't quite over. today she turns her attention to the commonwealth and is attending a special lunch including with prime ministers and government leader. our correspondent, naomi, anything at the house is pga niff sent. colorful affair, no doubt. is the queen going to be going home with the duke of eden bral still in hospital? >> he's said to have improved significantly. overnight, and he's responding well to antibiotic. but it's still expected that he will spend the next few days in hospital. so the queen will be attending this commonwealth lunch alone.

>> also people turning up but rather controversially. the president of the sri lanka. and there's been rather loud protests. >> yes. the sri lankain' president has just arrived minutes before we came on air, and there were many large shouts as his car swept into the -- but they have kept their quite -- quiet through the jubilee but say now protests set to continue when her majesty arrives in about half an hour's time. >> naomi, despite rumblings of

republicanism in places like jamaican, the queen is known to have great affection for the commonwealth and threals been the theme running throughout the jube lee celebrations. we saw it on the boats and pageants and there were boats representing all the different nations. we saw it in the music at the pop concert, too. so this for the queen is a more formal occasion. there will be a brief photo and lunch session then the heads of state and government will present her with a special presentation marking 60 years on the throne. >> well, it's going to look very colorful. >> it's a shame we didn't see anybody going into the outside more on that lunch the queen is holding with commonwealth leaders.

now star gazers have been treated to a rare astronomical event. inventory nuss has been aligned with the sun. the event won't be seen again for more than a century. our correspondent has been trying to follow what scientists call the transit of venus. >> the site seen across the world. the black dot is the planet venus. it is size of earth, yet it looks tiny as it crosses the sun. the transit began late last night. in north america. also in east asia. and here were scenes from australia. >> this happens every 243 years. if you look at it objectively, it is just a little black spot on the sun. some would say a brand-new lamborghini is far more beautiful to look at, but this

is much more rare. >> some had to get up early before sunrise to catch the tail end of the transit. >> we're now five hours into the transit, and you ought to be seeing the last few moments of this spectacular event as the small dot of venus exits the sun's surface, but instead we're seeing this. cloudy skies. so as the lifetime moment comes to an end, for scientists the work is just begun. this will help them for their search for planets for distant stars that might be able to support life. >> this picture looks amazing. a reminder of our top stories here on gmt. the european commission in brussels has proposed new rules with the way governments deal with banks saying regulators

should be given power to force shareholders to accept responsibility for losses and close coordination between countries described as an essential step towards banking union in the european union. stay with us on "bbc world news." norcom from me and the gmt team. goodbye. >> funding was made possible by the freeman foundation of new york, stowe, vermont, and honolulu. >> at shell, we believe the world needs a broader mix of energies.

thats why were supplying cleaner burning natural gas to generate electricity. and its also why, with our partner in brazil, shell is partner in brazil, shell is producing ethanol, a biofuel