we explain more about the repercussions of the economy of the eurozone. >> 9 eurozone government had their credit ratings downgraded. france, portugal, spain had a there is downgraded by two notches. portugal is now categorized in the junk status, which means it is as bad as greece. those that have lent to portugal now face of defaults and serious losses. france has been downgraded by one notch and a number of other countries, nine in total. what i found really extraordinary is that this affected all of the members of the eurozone. only one has a stable outlook. some will say that this is simply a statement of the obvious, that they have a financial crisis. it might exacerbate that crisis because it might make it harder for some of these countries, in particular portugal. i think one has to be worried about the fact that the economy is contracting so far. the other thing about today, friday the 13th is the talks between greece's creditors and the greek government broke down. that raises the risk of a default by greece. many people have probably said to you, we expected this default.

talking about the future of the eurozone. this is something david cameron talked on in his speech to the congress. >> there are a number of features common to all successful currency unions, a central bank that can comprehensively stand behind the currency and the financial system, the deepest economical integration with the flexibility to deal with economic shots. and a system of fiscal transfers and collective debt issues that can deal with the tensions and the imbalances between different countries and regions within the union. currently, it's not that the eurozone doesn't have all of these. it's that it doesn't really have any of these. >> british prime minister david cameron joining us now. the chief economist at standard chart. did he point that out correctly? >> yes. david cameron was spot on actually. the euro has fundamental flaws. i should put my cards on the table and say i was happily involved in the note campaign. i was the co-author of one of the reports out 12 years ago as to why britain shouldn't join the euro

we are looking at bull actions for the long term, for the eurozone. but of course, the markets, investors, we want to see change in the short term. tell me how you see the greece recovery, or default playing out. >> i know more or less how the eurozone will look like in two years. but the next three days could be very important. especially in relation to greece. and we are now very close to see an agreement between the greek government and the private creditors. the talks are going on. and i expect that we see a deal, if not today, maybe over the weekend. or at least in february. so the business is in the making. and the next step is to take a new program for greece based on the prior actions that greece will have to restore its competitiveness, some statutory reforms. and then do that on the basis of a revised update for debt sustainability of greece. >> let me ask you what we discussed on the panel, and that is the possibility of a greek default. i understand that everyone wants to say, no default, we can avoid a default, but many people, most peopl

you admit you're linked to the eurozone. do you still feel you're overly tied to the developed world, g-7 economies or has russian broken free and can trade with china, africa? >> russia's position for centuries has been that we trade with everybody, but of course i believe that every country now is linked to the situation in the united states because it's the main importer of everything in the economy, to the eurozone because it's a very large economy. i would say that we are all tied to all countries. >> globalization has made you still shackled is what you're suggesting here. >> just to remind you, 2 trillion dollar u.s. economy. number 6 based on purchase parity. >> when would you say you're broken free? another 10 years you won't be as dependent on the united states and europe? >> let's see. >> by then you should be prime minister. we're going to take a short break. we'll be up with more here from "world business today" in davos. thanks. a little bird told me about a band... ♪ an old man shared some fish stories... ♪ oo

eurozone down by almost 50%. wall street still up and running, and the dow jones down by almost 0.5% at the moment. currency markets, the euro trading for $1.3210. the european commission has launched an anti-trust investigation into three carriers from the sky team alliance. it is looking for the deal into al italia, air france, and delta. the commission says the partnership could harm passengers on certain eu/u.s. routes where the parties would otherwise provide competing services. >> the former guatemalan dictator is facing possible trial on charges of genocide and possible crimes against humanity. the court found he had to answer for the deaths of hundreds of indigenous guatemalans. has been placed on house arrest until a preliminary hearing in march. >> guatemala's ex-military dictator appeared unmoved as the judge read her verdict. she ruled there is enough evidence to try him for genocide and crimes against humanity. despite his pleas to the contrary, the 85-year-old will have to answer for the atrocities

what can it do to is aboard eurozone economies? all countries are willing to make the extra contributions to imf funds that chancellor merkel things are needed. of course, it is this is written in greece that it will be talking about. that country is stumbling efforts to get its finances in order. >> stumbling could be putting it mildly. are germany and the imf still fully behind greece? >> certainly, they are. chancellor merkel has repeated that, of course, she does not want greece to lead the eurozone. she wants to see that country, you know, moving forward and strengthening its economy. but she has reiterated that greece must do more to implement the reforms, the fiscal reforms, that it has agreed to before support money can be paid across. there is 130 billion euros up european support money that has been waiting to go to greece since december. she said the catalytic a when there are real signs that greece is implementing the necessary reforms. one other thing that the private investors, people who have lent money to greece, th

it's not just the eurozone. there's disappointment in hong kong and shanghai, they're the two markets sharply lower today acting on the same reason. disappointment over the failure of the beijing authorities to take soem sort of decisive move on easing of monetary policy. basically trying to kick start the economy. we had been expecting it after those worse than expected growth numbers we got a couple weeks ago. it hasn't happened. during the chinese new year break it might have happened. it didn't happen. financial talks not surprising. the worst performers here, not only on china but what's going on in europe. in japan moody's is warning about japan's decision to delay its fiscal target. the government has decided to push back public finance repairs until 2016. that has negative implications on japan's credit rating. cannon is posting a rise in operating profits, up 14%. it does forecast weekening expected growth for this year, 2012. one other stop to tell you, hon hai is up. it is a major production company o

germany and france are continuing their push to end the eurozone debt crisis.ave they made any progress? we will be looking at that in one minute. stay with us. ♪ ♪ ♪ >> thank you so much for staying with us. has the leadership of the eurozone effectively been handed to paris and berlin? as those two nations forge policies little or no input from weaker members of the currency union. those certainly were some of the concerns on the eurozone periphery as german chancellor angela merkel and french president nicolas sarkozy met for talks here in berlin. but others are applauding the deal, strong leadership is essential to end the eurozone debt crisis, especially with bond market's excess -- injecting ever higher rates for a debt-ridden countries. as they draw closer politically, the two have been subject to increasing scrutiny and some lampooning as well. ♪ >> madam merkel -- [speaking foreign language] >> [speaking foreign language] >> only two of the high tablelen the roles of the diluted old lady in her darkened butler in an internet spoof of one of germany's f

i've heard some people refer to the eurozone financial crisis as if you have a bucket of water with a hole in it you patch up the hole you don't just pour more water into it what do you see is the future of the eurozone or can it continue at this rate i mean you look at the ongoing greek debt crisis that's a prime example of what looks like a cancerous problem on the body of the european neighborhood. i agree with that with that kind of analysis i think we are now changing from what i would call the acute phase of the crisis to the chronic phase of the crisis we really have a chronic crisis where a very important role since a few weeks is played by you in central banks they're creating money at a very rapid rate to make sure that the banks have enough funding and as of today the news came out that the second round of long term financing that the e.c.b. will be make it will be making available to the banks in a few weeks time will even be much larger than the initial amount so probably the verdict is not yet out but probably this is a now and direct way in which the european central

those nations are being hurt by the eurozone crisis.the world bank is making some $27 billion available for countries in eastern europe. john defterios asked robert cell lick what he thinks will bring to the markets. >> we have predicted slower growth. developing countries provided about two-thirds of the growth over the past five years. what we suggested by that contingency, if there's a more serious breakdown in the eurozone, you move from beyond muddling through to not being able to have a successful progress with italy and spain that effects the eurozone, then developing countries have to be prepared. they have to pre fund some of their own bonds, look at the trade side, they have to look at the banking side. what it shows is while the developing countries have been a source of growth, we're all in this boat together. if europe stumbles and fails, it will hurt everybody. >> let's put this into context. the world bank took similar steps in 2008 when it provided emergency help to countries hit by the global financial downturn. pauline

economy i thought this was quite interesting because although yes the eurozone economy very much weighs on the united states i've heard from italian economists for example that your and the u.s. they're much more pessimistic about europe and maybe part of that is coming from the fact that it is an easy scapegoat for u.s. politicians to say oh what's going on in the u.s. is dependent on europe when in reality the u.s. has some major problems of its own a major debt overhang. blick the fed has been very active in trying to reflate the economy but unaffected unaffected does bar high unemployment more than sixteen percent for people that either don't have work or want more work you know these are some real issues that the euro zone has nothing to do it and a congress that is bitterly divided in an election year is not likely to pass much so some real concerns that aren't being addressed here. probably still to be talked about as well from lauren the company accounting just over ten minutes as well as the deals from davos the show has from a former american fed chairman about well he thinks

well it's day two of davos and the eurozone crisis remains a main focus george soros was recently out with an editorial advocating for more europe as a solution all david cameron who also is in attendance at davos has been portrayed as a foreigner in the side of bureaucrats who want to use a crisis as an opportunity to make the dream of ever closer union a full fledged reality joining me now to discuss this from davos the host of capital counter self the lovely lauren lyster. so lauren i want to start off with with europe because this is top on the agenda in davos george soros is out with an op ed in the financial times today calling for more integration as a solution to the crisis i know is there in davos with you what do you say to the folks down there. yeah he's here in davos and after reading that financial times headline that is very much the identical rhetoric that he is pushing davos very pervasively he's spoken to participants he spoke at a press lunch to reporters on the sideline about many of the things outlined in that plan in that article that you cited in the financial ti

we don't see the eurozone in crisis. but we see its credit standing as having modestly weakened. >> all right, we'll leave it there. thank you so much for come on the program tonight. >> thank you. >> we appreciate it we've been speaking with john chambers, managing director of s&p's ratings service. >> tom: still ahead, it's said when your spouse is in the military, so are you. the unique challenges facing military spouses finding jobs. and tonight's "market monitor" is bullish. elaine garzarelli joins us with exchange-traded funds she thinks will beat the market this year. >> susie: a big government merger today, and this one from president obama himself. he's proposing to merge six government agencies that focus on trade and commerce into one single department. he says it will save businesses money and save taxpayer dollars. the move comes a year after the president proposed downsizing government. now he's appealing to lawmakers to greenlight his plan. if congress lets him, president obama would apply new math to fede

we need the eurozone to go and do quantitative easing. >> the eurozone members are beginning to wake up and realize it's all for germany. german unemployment all-time low today. italy's unemployment has hit an 11-year high. interest rates have been set for germany. they get -- when other countries are in trouble they get the benefits of lower rates. is there going to be a backlash or not? >> you've already seen the backlash in the press obviously. it's not surprising to anyone that you have this structural divide and it's not going to go away anytime soon. >> is the structural divide the cause of the problem? >> no. it's just another friction that prevents because you have very different decision processes going on. i think what will be interesting and what you're already start to go see when it was just merkel and sarkozy and you didn't really trust the italian leadership it was easy to keep with the german picture. if you get a change of leadership in france, have an italian government you are willing to rely on, you may start to see more balance as you get into the spring with the

. >> some say the eurozone is linked to the fate of italy. this country will continue to struggle to get its massive debt under control. just before christmas, the prime minister announced austerity measures. italian consumers have already started to tighten their belts, spending less on christmas gifts than last year. this kind of program may be good for private households, but not for the italian economy. >> shops across italy are now able to remain open around-the- clock every day of the year. it is hoped the move will spur domestic consumption and improve economic data. traders in the rumor skeptical whether this and other austerity measures will be effective. >> i do not expect much. if this year is like last year, we will have to close. i am about to retire. my children will take over. even if you work 10 hours a day, you can barely make enough. >> newspaper headlines are not doing much to live to the national mood. the dailies are full of stories of possible job cuts and inflation. the price of gasoline has risen by 5% to over 1.70 eur

first, we have to fix the flaws in the eurozone construction. when setting it up after the fall of the berlin wall, we were not able to go all the way and create a political union, side by side, with the economic and monetary union. it took a while for the consequences to become apparent. we enjoyed low interest rates and strong economic growth, especially in southern -- 47 eurozone measures. this made it so easy to -- for southern europe some measures. this made it so easy to neglect. we thought we were doing well, even without stronger coordination. this was a mistake we also alleged -- mistake. we also allowed the hallmark of our union to be hollowed out and violated without consequence. there was another mistake. we did not reduce public and private debt in good time. that was our third mistake. we are now addressing and correcting all three of them. this is why we have pushed for change to the european treaties. this is why we hope to conclude a new fiscal compact by the end of this month. with this, that, we will establish the principles o

this is what's happening at the moment, and the eurozone is progressing, it's changing.ts characteristics are going to be different from what it was two or three years ago. it is evolving throughout the crisis, but i have no doubt in my mind that the euro partners are determined to keep it alive and to keep it solid with a different architecture than two, three years ago but with a more solid one. it's just taking a bit of time to emerge. >> reporter: but it's fundamentally changing? >> it is changing, no doubt. no doubt. from a pure monetary and currency union, it's morphing into an economic union, a fiscal union with rules, with disciplines, with sanctions, with a bailout mechanism, with a european stability mechanism, and with a corrective determination to stay together. that's what we are seeing. that's what we are hearing. it needs to be implemented. >> reporter: exactly. and let's talk about the euro. should greece pull out of the euro? do you see greece still being part of the euro at the end of the year? >> i listened to what the european partners have said, and

the unemployment rate in eurozone nations remained at a record high of 10.3% in november. it shows that the region's spreading credit worries are still having a negative impact. the eu statistics office euro stat released the data friday. the figures cover the 17 nations that use the euro. joblessness was unchanged from october. that's when the eurozone recorded its highest unemployment rate since introduction of the single currency in 1999. people looking for work in spain are having the toughest go of it. the country marked the highest-ever jobless figure among member states at 22.9%. unemployment in spain was especially high among people 25 years old and younger. it hit 49 .6%. the lowest unemployment rate among eurozone states was recorded in austria, at 4.0%. >>> the u.s. has released employment data for december and the results beat market expectations. the u.s. labor department says the jobless rate dropped 8.5% from 8 .7%. the previous month. the figure was better than the market forecast of about 8.7% and the lowest in almost three years. employers generated 200,0

adding to this is the concern about the eurozone. the eurozone sovereign debt crisis. the interest which italy and spain have to pay on their buffer in debt has been rising -- on their sovereign debt has been rising to very uncomfortable levels. >> we stick in frankfurt were germany's benchmark tax, as we mentioned, more than -- germany's benchmark dax index, as we mentioned, down on the day. the dow jones industrial average, not a good picture there, either. more than 0.25% lower there. the euro losing ground against the dollar. trading for $1.2722. pressure continues to rise for hungary as well. the debt ridden nation has been downgraded to delaware status by fitch, meaning the country is at a high risk of default. the country has been at a virtual free fall. the nation's cost of borrowing soared in the latest debt auction. the government wants to secure a lifeline, but first, it must resolve some opposition. >> hungary is drowning in debt, but the imf and the eu broke off talks with the government in budapest about new financing because of concerns about a proposed

down grain 90 eurozone agencies. the rating agencies cut france's aaa credit rating delivering another blow to the eurozone. pakistan is gripped by political crisis as the standoff between the government and military enters a pivotal stage. >> they are engaging in opal verbal warfare. -- engaging in the open verbal warfare. some are writing off this administration. >> look out below. a satellite that is supposed to be heading to mars is barrelling back to earth. where it will land is anyone's guess. >> welcome to our viewers on pbs in america and around the globe. --nce's finance minister has friday the 13th. bad luck for the euro today. a short time ago france was stripped of its cherished aaa credit rating. eight other countries were knocked down a few notches. if that were not enough, talks haveestore at greek debt t been stalled. >> the french evening news tonight and the moment france learned it was stripped of its aaa credit rating. facing an election, this has been a presidents are cozy -- president sarkozy's

months of brussels is having more of a say when it comes to dictating the leadership in certain eurozone countries just a few months ago the former greek prime minister making a call for a referendum with the people to vote on the eurozone he was swiftly summoned to a summit in cad and then suddenly decided that he would step down all the people in these eurozone members to leave power nurse when it comes to calling the future of their own country. well you know it's a fascinating situation isn't it just last week we had the european union complaining because the government of hungary is acting in a way which it regards as being anti democratic yet the government of hungary was elected by sixty six percent of the people so i'm sorry i don't quite get that one myself i mean i really don't understand i'm not trying to support anything that's being done in the government but why on earth in the long term i do not believe that we're going to see the italian middle classes and the italian party of silvio berlusconi supporting their technocrat government and in greece we can already see the su

so the entire eurozone is in recession as we speak and while the eurozone is in a recession the u.s. is trying to recover from what's some call the great recession and there is this anticipated domino effect since these countries in the euro zone are so interconnected. what's happening in europe going to affect our recovery here it's definitely an impact at the margin but you know obviously the united states is a is a large continent all commie we get a very small percentage of our g.d.p. from tree as compared to a smaller country say like germany which is much more influenced by trade nevertheless there are also the financial linkages on top of that so really i think that the real impact would be if there were a negative credit of a country like spain or italy defaults that would be the sort of the really negative scenario or some sort of other scenario which impacted the american banking sector interesting that were thank you for coming on the show that was ever at harrison he is the founder of credit write downs. well coming up next on our team the capital account let's check in w

the new year in berlin. >> the situation in the eurozone is complicated. it is tense. extremely tense, like never before in the euro zone. >> once again, greece is causing acute concern. a key element in the second rescue package was that private investors would agree to take losses. but there has been no deal, and the german chancellor warned greece today that there would be no further aid without more progress. >> the second greek rescue package must be quickly agreed. otherwise, it will not be possible to pay out further funds to greece, which we want to be able to do. we want greece to stay in the eurozone. >> the two leaders did agree today to speed up the implementation of a new pact to enforce greater budgetary discipline within the eurozone. but there were reminders too that the debt problems of countries like greece, italy and spain have not gone away. >> in other news from of around the world, the head of the swiss national bank has resigned. he has been accused of benefiting from a currency deal made by his wife last year that yielded more than

the eurozone crisis worsens. taiwan goes to the polls to elect a new president. how well the effects -- how will the results affect the relations with china? welcome to "bbc world news," broadcast on pbs in america and around the globe. a british student is to be expediteextradited to the unite. and back to earth with a bang, a russian satellite due to crash land this weekend. >>> hello, welcome once again. eight people have died after recruit shipped ran aground off the italian coast. the cruise ship had saiet sail n friday. passengers were told there was an electrical problem. the ship began to lean dangerously, before heading for a small island. there, it appears to have run aground. a more pictures show 8 listing over the harbour wall. we got more details about what happened from one of the passengers. >> at about 9:00, we suddenly heard a roaring sound. then the ship tilted to the laeft. we thought, ok, is under control, and then we started talking to the guests. then maybe about an hour, something like that, they announced a general emergency. from there, w

the unemployment rate in eurozone nations remained at a record high of 10.3% in november. it shows that the region's spreading credit worries are still having a negative impact. the eu statistics office euro stat released the data friday. the figures cover the 17 nations that use the euro. joblessness was unchanged from october. that's when the eurozone recorded its highest unemployment rate since introduction of the single currency in 199999 people looking for work in spain are having the toughest go of it. the country marked the highest-ever jobless figure among member states at 22.9%. unemployment in spain was especially high among people 25 years old and younger. it hit 49.6%. the lowest unemployment rate among eurozone states was recorded in austria, at 4.0%. >>> the u.s. has released employment data for december and the results beat market expectations. the u.s. labor department says the jobless rate dropped 8.5% from 8.7%. the previous month. the figure was better than the market forecast of about 8.7% and the lowest in almost three years. employers generated 200,00

tensions are simmering in the eurozone as leaders searched for a path forward to halt the slide intoecession. the latest talks have the italian prime minister here in berlin today. borrowing costs in rome remain above 77, commonly seen as unsustainable. >> almost two months after being thrust into the role of italian prime minister, mario monti was eager to explain the positive impact of his reforms to the german chancellor. he wants germany and the financial markets to recognize the progress being made in overhauling the italian economy. >> italy does not present a threat of contagion in the eurozone. germany can count on italy making a positive contribution to europe, along with france and the other european states. >> before his visit, he told a german newspaper there could be a backlash in italy of the country's reforms to not bring tangible benefits led lower borrowing costs. angela merkel rejected the reception that italy has been getting a fair criticism. >> we're not doing this to torment another. it is so that we can become a stronger continent to the that is attractive to i

i've heard some people refer to the eurozone financial crisis as if you have a bucket of water with a hole in it you patch up the hole you don't just pour more water into it what do you see is the future of the eurozone or can it continue at this rate i mean you look at the ongoing greek debt crisis as a prime example of what looks like a cancerous problem on the body of the european neighborhood i agree with that kind of analysis i think we are now changing from what i would call the acute phase of the crisis to the chronic phase of the crisis we really have a chronic crisis where a very important role since a few weeks is played by you in central bank they're creating money at a very rapid rate.

in june, the world bank said 1.8% growth, anemic, for the eurozone.is is what they're saying. a recession for the full year of 2012, nina, contracting growth of about .3%. sort of puts a comparison of the eurozone with the rest of the world. >> the world bank believes the eurozone's inability to capture its troubles will affect the long term growth. earlier i spoke with a manager of global economics about this, and i questioned him the extent and influence of the potential eurozone recession. >> we're calling for minus 0.3% growth for the euro area countries, so that is going to imply a recession in the area. nevertheless, we do expect that to come to an end in 2013. >> so a recession that will be brief, let's say. how can developing world countries protect themselves from feeling the knock-on effects of a kind of recession in the eurozone in that's a pretty big export market for a number of these developing world countries. >> our baseline scenario, that is there to a significant degree. what we see is developing countries continue to expand their ex

we talkst start with -- a lot about the eurozone and the crisis. but today, a particular focus on unemployment. >> disappointing figures from the 17-nation eurozone showing unemployment has risen to 10.4% in that area. that is in the month of december. of the same month a year earlier, down to 9.5%. 16.5 million people are jobless across the eurozone but in terms of specific countries, spain is of course the worst performing, 22.9% unemployed, the highest number of unemployed in the industrialized world. one of the big focuses of yesterday's summit in brussels is to find where the jobs and the growth will be coming from. a little earlier i spoke to one strategist and ask her how much pressure there was on eu leaders last night. the more will have to come. if you think about it, we got yesterday was just an agreement -- disciplinary action. it can take a long time for legislation to be passed within those countries and for this to be formally put in place. we still have a lot of progress to me made. meanwhile, there are a lot of hurdles to be overco

>> for the czech republic, like i said, the good news is we are not directly affected by the eurozone crisis. >> ok. >> we still have our crone, which can grow up and down as the economy grows or the forets show there'd demands the crown. so the economy works on the pace that is natural. it has not been efficient -- officially moved one step above or something like that. we still have our own pace of the economy, which is, of course, it influenced by the eurozone itself because germany, austria, and even now slovakia, they are in the eurozone, so everything that goes on in the eurozone -- the drop in demand, the slowdown in consumer confidence, everything -- that, of course, affects our economy. basically export driven. but on the other hand, we can still the just because we do not need to use the euro. >> you have been a mayor. you have been in the house of deputies. in the cabinet, i would call, you were minister of agriculture. you were in this committee that affects the foreign-policy. and now you are here as ambassador to the united states. i gather that czech republic has 85 emb

of course from who's in brussels well if it is true what will this downgrade really mean for the eurozone well yes if it is a true this century as you mentioned it will really hurt the confidence that's really the main think the driving force of the national markets here first let's go back to what's been reported there s. and p. is set to cut doc just france but also austria both the aaa rated countries and it says that germany the netherlands gentle it and looks were will will retain their current status now for france in particular it has been born even last year even experts we've been talking to they say that downgrade is imminent now is what why this is happening is because of france's involvement mainly on bailing out greece portugal and also it leaves the e.c.b. so it has put itself in a very vulnerable position so one can say that this is not unexpected unexpected but of course many news that just this comes out of family of course the reactions would definitely be negative as we've been seeing in the markets now the minute the main problem here if you know that mario monti for e

the downgrade is a clear signal that the crisis in it the eurozone is far from being resolved. even though its economy has been sluggish over the past few years, france remains one of the eurozone's heavyweights. >> it is not good news for france, of course. the downgrade of the u.s. last summer gave the confirmation that we deserved it aaa and have a very low rate. so we do not have to overestimate this news. of course, it is not good news, but it is not dramatic. >> downgrades are also looming for other crisis-hit eurozone members. above all, italy and spain. yields on their bonds rose sharply on friday, prompting the european central bank to step in and buy more bonds from the governments of rome and madrid. >> a short time ago, we spoke to our correspondent in paris and asked her about the reaction in france to the downgrade. >> the atmosphere is quite nervous. the french president is already sitting for hours with his minister of finance, talking about this new crisis. actually, i think it is quite a shock for the french people. it is a matter of pride, but it could also h