is this the ecb or are we likely to see the ecb taking much bigger steps today to show that they're inn sorting out a solution, to lay their hand out a bit to show they're also serious and everybody's pulling in the same direction? >> yes, andrew, we did have a bit of a hint earlier on last week from mario draghi that perhaps we could see a little bit more support for those countries like spain and italy whose borrowing costs are getting exorbitant at this point amid all of these concerns about rifts between eu members and exactly how to solve the euro zone debt crisis and the viability of a single currency. we saw hints when he gave a statement to the european parliament last week but we haven't had anything official from the ecb saying they would come in and step in significantly to support these markets should we get consensus. there have been some reports circulating that perhaps they could. we haven't had that confirmed though yet, andrew. >> we're watching that one more closely than usual. everything the ecb does at the moment very closely scrutinized. >>> here in arsiasia, inves

the ecb does not like to be pushed around by the politicians, but ultimately, the ecb is a political institution. those who run it are appointed by member governments, especially france and germany. it seems the french and germans are leaning on the ecb, which i would expect them to having gone to all of this trouble to get the new treaty that the ecb will take some steps. i am not saying the whole thing has been resolved, but if you look at the markets, what happened today, bank stocks went up around europe and in britain. they're like the canary in the coal mine. if the markets thought this was a non-event, bank stocks would have collapsed. the fact they went up says to me that people are expecting some more intervention from the ecb. >> you spoke about the pressure applied. coming from the summit, will europe look more like germany? >> we are a bit. the whole problem with the monetary system is it has not had the institutions you need to run a common currency. we only have part of the central bank, we don't have a proper fiscal union. we have not gone all the way on either of thos

the ecb rate is key for all nations using the euro. ecb also announced today that it was not planning on a wholesale purchasing of u.s. government bonds, which disappointed investors and sent stocks lower. >> ecb president mario draghi is under enormous pressure. while politicians are struggling to craft reforms at the summit in brussels, calls are growing for the ecb to support ailing member states by buying up their government bonds. draghi wants none of that. >> we have a treaty, which says no monetary financing to governments. >> but eurozone banks will be able to borrow unlimited amounts of ultra cheap money for the next three years. the aim is to make it easier for them to lend to industry. if they fail to do that, any hopes of growth would be even more endangered than they already are. but draghi was short on optimism. >> the intensify financial market tensions are continuing to dampen economic activity in the euro area, and the outlook remains subject to high uncertainty and substantial downside risk. >> the euro and the eurozo

no, please. >> the ecb is there and it is not letting governments off the hook. if leaders do not find a road out of the crisis tomorrow, the central bank might yet have to do to rescue the sinking economy. >> we believe that the eu leaders are still meeting. you have more market reaction to the events in europe. >> indeed, i do. obviously, this is having a huge influence in asia. yet again, as you mentioned, european leaders hammering out a deal to save the euro in brussels. the european central bank dashed hopes of there would be financial help for the region. in asia, they are taking their cues from europe and the u.s. some of these stocks have given back some of their losses from earlier. you are seeing the nikkei, the kospi, australia down. the hang seng in hong kong is down as well. inflation data softened to 2.4% in china. u.s. markets have been on edge all week in anticipation of a summit deal. investors watching for statements that would be made at a press conference to be held in brussels. this is how u.s. markets closed. of course, it is no surprise th

we don't know what the ecb would do after this, of course. he's please, lagarde from the imf is pleased. you're getting positive results coming out of those people on the outside sort of who have a lot of influence on this that at least now we have this treaty, we have this mechanism. we have this agreement. it may not be all 27 but it's close. >> okay, jim, thanks very much for that. jim boulden live from brussels. nina? >>> andrew, we're covering all sides to this particular story from the politics to the people directly affected by the crisis. and later this hour we'll be in greece, ground zero the euro zone meltdown, homelessness has been on the rise there for a number of months. as harsh spending cuts force people on to the streets. then we're going to be going back to brussels to talk to european council cabinet member richard corbett about the political divisions in the belgian capital. >> i want to go back to something jim was talking about there, the market reaction. we saw the markets here in asia negative. in europe they've been in

the ecb has liquidity in place in terms of the eurocurrency. they have swap lines we think are very sufficient to provide dollar liquidity. i don't anticipate even if the crisis in europe were to worsen, further steps on the part of the federal reserve and this time. >> mr. kamin, sovereign debt held by u.s. banks to prevent this further deterioration? >> i will defer to president dudley who is on the federal market committee. >> i can't obviously speak for my fellow members on the committee but -- >> the bar to doing that would be extraordinarily high. i cannot imagine circumstances in which we think that was an appropriate action from a monetary policy perspective. we have the legal authority by foreign sovereign debt. this is surrounding the ability to conduct foreign-exchange. we have a small portfolio that we run with the treasury that represents our foreign exchange reserves and we have never gone out and bought large portions of foreign sovereign debt in the history of the fed that i am aware of. >> would you consider accepting european

. >> and the ecb issues almost 500 billion euros it in cheap loans to banks.re the markets reassured? not really. ♪ >> we began in afghanistan where five nato soldiers have been killed in an attack in the eastern part of the country. their convoy was hit by roadside blast. all five of the soldiers were from poland. it is the deadliest incident involving polish troops in the 10-year mission to afghanistan. the taliban say they carried out the attack. those deaths, on the day when german defense minister thomas de maiziere paid a surprise visit to his troops in afghanistan and head of the holidays. he said germany would do more to help train afghan security forces before the drawdown of troops begins next year. the defense minister also acknowledged that security in afghanistan had shown some improvement but that conditions were still quite unstable. >> it was a brief visit kept secret to the last minute. thomas de maiziere wanted to send a message of support to troops on the ground. >> the afghanistan mission may be politically divisive, but the achievements of

>> it looks like the ecb is not even going to go there. the president appears cautious about buying more of the region's government bonds. he told reporters thursday he is surprised by market speculation that ecb may increase its bond purchases. market participants are reportedly concerned the european debt woes may engulf italy and the bailout fund may run short of money to buy up government bonds. he stopped short of declaring the central bank would step up sovereign bond buying when prices decline. >> i was kind of surprised by the implicit meaning given not by all the press but some to the other elements would follow. >> on the same day, ecb policy makers decided to cut key interest rate by a quarter percentage point, bringing it down to 1%. it was intended to prevent the debt crisis from eroding the economy. following the statement by the ecb chief, yields on italian bonds jumped in the european markets overnight. the yield on italy's ten year government bonds shot up to the upper 6% level, while the yield on spain's ten year bonds ro

the ecb president's failure to commit to more bond purchases disappointed market participants. this refueled concerns over the eurozone debt crisis. overnight weakness in new york stocks also dampened market sentiment. let's take a look at currencies as the dollar is moving within a tight range in tokyo trading. the greenback is currently at 77.68-69 yen. the euro at 103.68-73 yen. participants are refraining from active trading as they watch the progress of the eu summit. here's a look now at the latest long-term interest rates. the year on the ten-year japanese government bond down over 1.5 basis points. >>> japan has revised down its economic growth for july to september. the figure is now 5.6% in annual terms. that's down 0.4% from the previous estimate. the cabinet office released on friday its second preliminary estimates for the country's gross domestic product. the adjustment to the gdp figure comes as corporate capital spending and private consumption fell short of previous forecasts. capital investment declined due to worries about the strong yen. meanwhile compared w

the ecb's massive three-year offering of nearly 500 million euros to lenders last week. that was its latest attempt to keep credit flowing in the 17- nation euro economy as the credit crisis drags on, but monday's record high overnight deposits shows banks still fear not getting their cash back. >> european shares held steady on tuesday in low-volume trading after strong gains last week, but the liquidity crisis is still on everyone's mind. we have this report from the frankfurt stock exchange. >> it seems absurd. the european central bank is lending billions to the banks, and the banks have nothing better to do that and at the next moment carrying it back to the ecb. but the uncertainty, the insecurity, the mistrust is so big that the banks see no other alternative. at the moment, they fear that the euro sovereign debt crisis will sooner escalate than calm itself. not much changed this first day after the christmas holidays. people see it continuing that way until the end of the year. if it has rising potential and people see it more next year than in his last few days

is that the right approach and do you have confidence we'll see what we need to from the ecb. >> it'she right sequence so first european governments must move and provide enough assurances for them to go all-in. i stress it has to be all-in which is another way of saying the ecb must use its balance sheet as a bridge but has to be a bridge to somewhere and if we get these two actions then other things can fit in. so it's important. and the band-aid is absolutely correct, we did have a massive intervention last week. it was important because the functioning of the market, poppy, was getting problematic, the pipes were getting clogged so we needed something but we've just unclogged the pipes for a few days and weeks and must fix the building. >> this week, dragi stopped unlimited buying and have merkel who is basically saying no easy path out. we have to make the toughest decisions and take the toughest past to change the euro-zone as you mentioned earlier. is that the right approach or such a crisis that we need to say, well, we don't need to have such strict guidelines? >> i think mrs

what's happening here is the ecb lends to the banks and then the banks go out and buy sovereign bonds. >> provided they do, of course. >> well, it's not guaranteed that they will. >> which do you think is the most efficient form? >> i personally feel if it was direct purchases of sovereign bonds, that would be much more effective in the market in easing the sovereign problem in europe. we have a sovereign problem and a bank problem and those two problems are twinned. >> the european central bank has so far resisted calls to substantially increase its direct purchases of government bands, particularly if the secondary market because it can't do so in the primary marketing with pauline. the issue here is, what they've done is, given a lot of long-term financing to some of these banks, hoping they'll park it in the government bond markets. a lot of people say that just reinforces a vicious circle. >> and that dilemma of not issuing more bonds in europe and the news that more than 500 european banks lined up for loans from the ecb weighed on the markets here in asia. most of the major ind

he opposes extending the powers of the ecb to help member states. >> it would buy a few months relief but not solve any problems. >> some of his colleagues see things differently. sweden says the ecb should step up its role, given the low inflation risks in the eurozone. >> price stability is secure in europe, so there is removed -- room to maneuver. >> the eu finance ministers are doing all they can to save the common currency, the time to come up with a response is running out. >>> britain ground to a halt amid a public sector strike, their biggest walkout in more than 30 years. up to 2 million employees shut up to protest austerity measures they say will force them to work longer and pay more for pageants. -- or pay more for patients. the threat of strike at heathrow airport did not materialize after most immigration official showed up for work. >>> germany's unemployment dropped a record low in november. the figures show the jobless rate sank by 0.1%, 6.4%, the lowest in 20 years. 2.7 million people were out of four, 24,000 fewer than in october. >>> the unemployment rate in the 1

he did not want ecb to be the lender of last resort. he is pleased. he has already made some comments. is he pleased enough that it will push the ecb to start buying up some of these debts? the markets are up, but so are the yields. that said, some are very adamant. they believe the agreement reached in brussels is self- defeating. >> the key to this crisis is economic growth. investors doubt that countries such as spain and italy are going to grow sufficiently rapidly to be able to service their debts. what they have effectively agreed to is to institutionalize fiscal austerity into the framework of the eurozone. all governments will be committed to the high levels of austerity -- closing those budget deficits. of course, in the long term, countries need to be sustainable. there's only so much they can do when their economies are very weak. cutting public spending and raising taxes by as much as they will be required to do when their economies are actually contracting, it risks making the situation worse. it risks being self-defeating. in many ways,

japanese yen, as borrowing costs for italy rose further and money borrowed by spanish banks from the ecbmbed to the largest amount in a year. >> it seems as if your cannot do anything right these days. after forging an agreement for a close their fiscal integration in brussels last week, the euro continues to drop. investors are pulling money out of the currency union and putting it all started up they are only interested in sovereign bonds at a record high interest rates are attached, as with italy. the dwindling confidence has taken its toll. at the end of october, the euro was still trading at $1.41. since then, it has plummeted more than 8%. to make matters worse, the president of germany's bundesbank says his institution is against to add the ecb lent money to the imf and prop up struggling eurozone economies. he says the ecb cannot become a printing press to save national governments or it will lose its independence. >> the opec oil cartel has agreed to keep oil output in its member countries steady at current levels for the coming year. the decision was an important show of unity

accounts with the ecb.learly this is slightly worrying to investors because they feel the commercial banks may be stockpiling cash and they may know something they don't ability a powe testimony credit crunch coming up. let's have a look at the currency markets. the your i don't slipped to a ten-year low against the yen and an 11-month low against the dollar in tokyo this morning. 1.2920. so going quite sharply down. this sauf by about a current and a half actually just in the past 24 hours or so. so a lot of pressure on the euro, and that does suggest in the minds of many investors globally the sovereign debt crisis does continue. on that vein, let's go back to the italian bonds. investors were probably hoping for more good news out of europe to help them forget what's been a pretty horrible year in terms of european stocks. with wednesday's debt auction in italy, they got it. but today will prove a test of whether confidence has returned to this continent. hot on the heels of the ecb decision to lend $630

the ecb can continue to fund the banking sector. it's on an enormous scale.keep this rolling forward for some time, but they don't seem to be able to offer an exit. >> so, if the eurozone actually does implode, what are the consequences of that happening? kirstie hughes is from oxford university and specializes in international studies. she says if the eurozone collapses the future of the entire european union can be at risk. good morning kirstie. let's talk about the failures. you have a list of ten, which is interestingly enough the amount of days left according to olli rehn. which is the biggest failure. >> i think given the depth of the crisis, the biggest failure is to act quickly enough and on a big enough scale. that's true for the last almost two years, the scale and speed you could have acted at to deal with greece is smaller than the scale you need at this summit which is now only in a week's time not even ten days. you need huge scale if you're to decisively solve the crisis. >> the numbers are like 300 billion euros worth of debt for greece. now t

to the rescue has come the ecb in frankfurt, which provided 489 billion euros of the emergency loans to the euro zone banks. at the heart of the euro zone crisis is the number of governments are perceived to have barred to much. they borrowed some of this money from banks. if the government proved unable to be paid, that is why investors have become reluctant to lend to over indebted governments and to weak banks. is everything fixed? >> it is not a solution to the crisis. the real cause of the crisis is the insolvency of sovereign states and economic austerity throughout a depression zone europe. these things will continue to plague the system. what the ecb money will do is to relieve a lot of the pressure on banks for a period of time. >> the question is whether it is possible to gather the amount of financial resources necessary to support the system. >> euro zone governments still have to take tough action to prevent a banking collapse. >> these are the headlines. the united states has renewed its call for the syrian president to leave power, he does not deserve to rule and my cr

one of them will be a closer fiscal integration, one of them will probably be greater ecb involvement in the purchases of peripheral government bonds, more austerity and commitment to austerity by the peripheral countries, a number of things like that, but i just don't see that we can get all that done in the next couple days. >> susie: when you talk about this fiscal integration, that means you've got to get 17 countries on board about agreeing to have budget discipline. now, do you think they can get a deal on that? or is that a deal breaker? >> it's going to be tough. we see it in the u.s., how hard it is to get a deal done, and that's one country. 17 countries makes it just incredibly difficult. but i do think that they recognize the gravity of the problem. that if they don't ultimately come to some sort of a deal here, on all of these issues, that the monetary union will not be viable, and the alternative, collapse of the union, disorderly debt defaults and the potential ramifications that could have on the financial markets not just in europe and the economy, not just in europe,

they hope by signing up to a tough deal on spending limits, it will make it easier for the ecb to helphose countries struggling to finance their debt. what has been agreed? these two leaders are such a on arguing for an eu treaty, although many details remain unclear. there will be strict budget limits, deficits will not be able to accede to% of gdp, and there will be automatic sanctions for those who break the rules. in france, there is huge concern that these changes will impact on national sovereignty. that sanctions will apply it on the recommendations of a brussels. the opposition fears that any oversight of budgets by european court will weaken the role of parliament in france. >> respecting some discipline, it does not mean that we lose any control on our own economic policy. >> if a european summit decides on friday to seek a treaty change with the backing of all 27 members, britain, too, will have to give it support. some countries may decide to hold referendums. asked about the likelihood of holding a referendum in britain, the prime minister said he did not think the issue w

this is a very important monetary policy reason for the ecb posada no standard measures. such interventions can only be limited. >> european banks have been finding it increasingly rigid the markets welcomed wednesday's coordinated central bank action to boost global dollar liquidity. they stressed such a step was a quick fix, not a long-term solution. >>> france and spain had successful bond auctions thursday, investors keen to buy up the bonds, though the deals were mostly lower. we have this report from the frankfurt stock exchange. >> investors have become much less concerned they may not get their money back if they invest it knout in the eurozone government bonds. this became very clear if this thursday. at auctions of new french and spanish government bonds and bills, demand of investors was very high. the yields on many of the eurozone government bonds came down significantly. bond traders gave several reasons for this. one is the concerted action of the central banks of this wednesday. then the installation of the leveraged bureau rescue fund, -- euro rescue fund

saving the euro will come just after that, if there is an agreement from the ecb. that is why france is actually following germany. then, hopefully, the ecb will step in a tree that still a long way -- will step in. that's still a long way. >> i did my best to protect the people, so i cannot feel guilty. those are not my words. those are the words of syria's president assad in response to claims that he took deadly action against his own people. he was speaking in a rare television interview with barbara walters on abc news. he dismissed footage of his armed forces storming through towns and cities as distortions of reality. the denials at the end of a bloody year in syria. the united nations says more than 4000 people have died in the country since the uprising began. the arab league has demanded that syria allows observers into the country. syria says it will allow observers into the country, but only if the arab league drops the sanctions on the country. he was challenged about the crackdown in that interview and he said, "they are not my forces. they are milita

the ecb is doing everything that they can to help the banks, but not the sovereigns. >> interest ratesave been held at that record low by the bank of england's monetary policy committee. the euro zone debt crisis means that economists had expected rates to remain unchanged. they have been kept at half of 1% since march of 2009. let's move on. the chinese rating agency says that it has cut its sovereign credit rating for france as the deepening euro zone crisis is threatening the solvency of paris. adding that a further downgrade was possible. of course, the move comes just one day after the chinese foreign ministry told a press conference in germany that his country has confidence in europe and the hero. he also said that china would use various means to support european nations. a bit of a mixed bag, a mixed message, coming out of china. asia came down off the back of machinery orders. that was certainly not helping and it does not bode well on the general health of the economy. nothing to say about your up at the moment except all eyes are on this summit and, in particular, this meet

the ecb offered a total of 489 billion euros, that's about $640 billion on wednesday. the central bank said that over 500 commercial banks asked for the three-year loans. market sources say the massive loans may ease concerns about the bank's funding situations for the time being. in europe, the flow of money between commercial banks has slowed due to fears about the credit standing of counterparty banks amid the ongoing crisis. >>> a leading japanese credit rating agency has downgraded japan's government debt for the first time. rating and investment information or r & i on wednesday downgraded japan's sovereign debt by one notch to aa plus. that's down from the top aaa rating. the agency said this is due to the country's fiscal instability. r & i cites the possibility there may be no review of expenditure for fiscal 2012 including social security expenses. it also says the consumption tax may not be raised as planned. japanese government bonds have already been downgraded this year by u.s. rating agencies standard & poor's and moody's. on the downgrade bank of japan

make matters worse, the prident of germany's bundesbank says his institution is against to add the ecbt money to the imf and prop up struggling eurozone e economies. printing press to save national governments or it will lose its independence. >> the opec oil cartel has agreed to keep oil output in its member countries steady at current levels for the coming year. the decision was an important show of unity after its previous meeting in june, when it ended in acrimony in disarray. it is in is for oil consumers who have shared production cuts. crude-oil futures in london and new york eased wednesday in reaction to the opec agreement. >> the global economic downturn has not changed much in the oil industry. prices are still sky-high. ministers from the 12 opec countries meeting in vienna wednesday decided to cap output >> i d not think any of us s is complaining at this time, but we're watching very carefully, because, obviously, as media ramps up, the expectation is that prices will drop a little bit. >> the clear trend is toward higher prices thouough. sinc early 2009, the cost of a ba

more than 500 banks took up the offer, making it the ecb's largest ever single liquidity operation. the banks just got the cash only on friday, and now some appear to be putting it right back with the ecb, perhaps because of continuing anxiety over the financial future. well, 2011 began with a warning from hungary's prime minister saying, quote, we have to save the euro over the next six months. but here we are, 11, 12 months later, and the single currency's fate still hangs in the balance as the new year, 2012, dawns. this year saw portugal, greece, italy and spain struggle for financial survival. athens and lisbon received bailouts in 2011, but there's no quick fix. and while the arab spring toppled some middle eastern leaders, financial woes pushed several leaders out the door. gone from power, greece's george papandreou and italy's silvio berlusconi, two big political figures. 2011 also saw summit after summit after summit. and the world watched as finance chiefs burned the midnight oil at a final summit in early december in a last-ditch effort to save the euro. jim boulden take

unless you get all this the ecb won't come in, won'ting all in and if the ecb is not all in we are going to go from one volatile situation to another. >> how do you think s&p going to respond to all of this next week. they seem to warn that if there weren't a comprehensive plan coming out of europe that they would downgrade the ratings of 15 eurozone countries. do you expect that to happen, and if does, what does it mean for the united states? >> so first we are not in the business of predicting the rating agencies. in fact it's really hard to do so. our own internal ratings on the basis on which we invest have a number of the european countries at lower ratings than the rating agencies have them so we would not be surprised if they get downgraded. we just don't know when that's going to happen and who is going to get downgraded. in terms of the u.s., funny enough to use bill gross's analogy, the u.s. is increasingly looking like the cleanest daily shirt so while the u.s. has issues, relative to europe it looks pretty clean. so the u.s. is going to continue to attract a lot of attention

but there are reports that the ecb may be moving its to a little more of a supportive start. what mario draghi wants to see sequencing, that the governments do their bit before the ecb comes in as potentially the lender of lart resort. we had terrific car sales, really good november figures. >> let's hope the jobs numbers turn out the way you say, steve. we'll carry those live on "morning joe." still ahead on "way too early" if you're watching the show at 2:40 a.m. in southern california, there may be a reason other than your affinity for late-night news. the 100-mile-per-hour santa ana winds that are whipping past your home. we'll explain what's going on. >>> plus, thursday night nfl as seattle's marshawn lynch provides a fitting metaphor for the eagles season on a single incredible touchdown run. you've got to see this effort. highlights and more when the campaign trail on "way too early" comes back. >>> enron has been in tailspin ever since revelations that its former chief financial officer ran partnerships allowing the company to keep half a million dollars in debt off i