>> hello to everybody. >> translator: the council of the ecb is a very important decision. in the framework of the agreement of the 9th of december there was a debate between france and germany, as you know, within the eurozone about the status of the european central bank and about its qualifications of last resort. now some of us in the world in general and within the european union consider that it was a reasonable debate. now the debate no longer exists because of strasburg, europe,

what are you expecting the head of the ecb to say?> i'm expecting him to outline how successful the ltros have been. we've seen in recent data that it's been going on overnight deposit for the ecb. it doesn't help matters in europe. what needs to happen, i think, within europe is the banks need to invest this money in businesses within europe and at the moment it's been part of the ecb. what i think he'll do is probably outline the course of the next rate cut. i think we could see that may be in the next couple of months. >> okay. michael houston there, markets analyst from cnc markets joining us. andrew? >>> nina, the imf chief christine lagarde is a long way from europe. she's on a trip to south africa. europe's troubles were never far from her mind even as she tried to put a positive spin on that. robin kerno sat down with the imf chief. >> reporter: we start off the year and it seems as if all those problems with the eurozone are back to bear. >> we need to be very taenttive to what is being done and effectively delivered in europ

should the ecb take a haircut?he ecb has been during all this time very visibly confidence so it's not my working that would be for the ecb. >> i mean, we've got to come together, right? so do you think that at some point in order to get together the ecb will take a haircut? >> again, it is not my working assumption. >> okay. it's not your working assumption. >> no. >> let me ask you, everyone is afraid and adamant about greece not defaulting. what is the worst case scenario if greece defaults? i feel many market participants expect the default. is that a disaster scenario? >> again, i stick of course to this advice, no credit advance and voluntary negotiation. i think what is extremely important and is to understand is that greece is part of a system, part of the of course and part of the advanced economy. again, from the global crisis. so some decisions, orientation have been taken. the governments have said very, very clearly what they were aiming at. i would say stick to what you have said. and deliver on the b

the ecb is considered independent.nd we can certainly say whether we think that decision is right. but the unlimited amount of liquidity for three years at 1% has considerably reduced the tensions in the european banking industry and it's very important because it will enable us to restore can haonfidence gradualt it's not enough, of course. they will have to be more chances, we'll have to confirm the agreement on the two issues of the agreement between the heads of state of government the 9th of december, a fiscal issue, the treaty, ratification of the treaty, and a solidarity issue. and brought about how we came together to continue to support growth. >> minister schaeuble, how do you see it? >> translator: german and france are basically seen in the very same way. the cause of the crisis is basically the factor that there has been a lack of fiscal displan indiscipline in a numbe of countries. if we want to restore the confidence which has been lost as mario draghi has just said in this clip, then what we have to do

it shows you how the ecb remains this critical lender of last resort to the banks.looks like it's only getting worse. the credit crunch, the trust between the banks seems to be getting steadily worse and worse. fascinating stuff. >>> still ahead on "world business today," the world trade organization a landmark ruling against china over the decades old restrictions on mineral export. now there's another trade on the horizon. the details just ahead. time for eye look at the oil price. iran transformed the parliamentary debates. the e. wu is due to implement its own bans. it's assured opec it can make up short form supply. you're watching "world business today" live on cnn. >>> now, in a blow to beijing, the world trade organization has ruled that china's export limits on raw materials violates international trade rules. following that decision on monday shall the e.u. is pressuring the chinese government to loosen restrictions on the export of rare earth minerals as well. they are essential in the wide range of high tech products from smartphones to flat screen telev

ben bernanke is concerned about the u.s. >> will the ecb cut -- >> not next week. they will cut as we go forward into the second quarter. i think they'll wait -- >> on the ltro? >> exactly. >> good stuff. david, thanks for that. david owen, chief european economist at jeffires international. that time of the day when two becomes three. jackie is with us. we have a great hour of programming still to come. jackie? >>> hey, good morning, ross. it's great to see you back from davos. fantastic coverage. it was fantastic to watch. some really great interviews and insight there. meantime, one of the talking points that i want to bring up today, we're watching president obama. he has a lot on his plate these days with running the country and, of course, running for re-election. now he's adding one more task, finding jobs for individual americans. he took on the assignment during a live web chat organized by google. in fact, one online questioner pressed the president on his claims about demand for highly skilled workers saying her husband, an engineer, has been unemployed

in a press conference after the meeting, the ecb president mario draghi said there were signs of stabilization. and the markets after rallying -- european blue chips gave up much of their gains after disappointing economic data in the united states was released. we have this from frankfurt. >> the well received options are in spain and italy led to a small rally here on the frankfurt floor. traders said that this might be the turning point in this debt crisis. definitely they are saying is easier for states like spain and italy to get fresh new money. the dax went up because of the news that came in here, but at the end of the session, its is

former ecb president will weigh in. you're watching cnbc, first in business worldwide. t. olli block the acid with prilosec otc, and don't get heartburn in the first place. available at walmart. >>> expectations, greece and private creditors will reach an agreement by the weekend to cut the nation's debt load are on the rise in davos, switzerland. maria bartiromo spoke with advisers about this issue. >> thanks so much. as talks continue this weekend between greece and its creditors, i spoke with the finance ministers of germany and france today. the finance minister of germany, wolfgang, told me he's adamant a default is not in the cards. let me ask you, as we all try to figure out the next steps to fix the eurozone crisis, how do you manage austerity, cutting back, while at the same time what you're looking to achieve, and of course, that is growth? >> what we try to do is to stick on what we close a close friendly deficit reduction. of course, we have to reduce the deficit. but at the same time we have to strengthen growth. and that's what we're doing. that is essential.

the ec be made a decision at its first policy -- the ecb made a decision as first policy meeting in frankfurt today. in a press conference after the meeting, the ecb president mario draghi said there were signs of stabilization. and the markets after rallying -- european blue chips gave up much of their gains after disappointing economic data in the united states was released. we have this from frankfurt. >> the well received options are in spain and italy led to a small rally here on the frankfurt floor. traders said that this might be the turning point in this debt crisis. definitely they are saying is easier for states like spain and italy to get fresh new money. the dax went up because of the news that came in here, but at the end of the session, its is it dragged down -- it is dragged down by wall street. u.s. unemployment is higher than expected. retail sales went down. the euro went up. >> we will have a closer look at thursday's numbers and germany's blue-chip dax finished up. the euro stocks eurostoxx finished up. in currency markets, the euro considerably higher today, trading at $1

instead, he becomes the first non-german to hold the post in ecb's 13-year history. he is a currency specialist and will take over for the previous officeholder who resigned because of the buyback program. germany continues to defy the debt crisis. latest numbers show german unemployment last year hit its lowest level in two decades, in comparison to the previous month, however, dec.'s unemployment has gone up slightly, putting the unemployment rate in germany at 6.6%. keep in mind, the winter months, a small rise in the unemployment rate is typical as construction and agricultural work slow. >> jobless rates elsewhere in europe are soaring, but in germany, the labor market is fairing better than it has in years. the country's economy has largely avoided the eurozone slowdown, and german companies are still hiring. >> after the crisis in 2009 and the following recovery in 2010, the strong economic developments had a very positive effect on the economy that reached well into 2011. the job market profited from the. >> the development of the labor market has been positi

> our headlines -- standard and poor's downgrades the special fund designed to save the euro as the ecb boss says investors should pay less attention to ratings agencies. rescue efforts resume on the wrecked costa concordia. the cruise companies blaming the accident on human error. meryl streep when the golden globe for her role as the "the iron lady." >> the ratings agency, standard and poor's, has downgraded the european financial stability facility. the special bailout fund set up by eurozone countries to rescue their common currency. the agency lowered the funds credit worthiness by one notch, from aaa to aa +. >> that makes it more expensive for the efsf to raise money to help bail out troubled eu nations. it follows a similar downgrade friday on a number of euros some countries, including france, that contribute. >> the downgrade comes as the european central bank president, mario draghi, called on investors and regulators to rely less on ratings agencies. addressing a committee of the european parliament, he saw to minimize this latest round of downgrades. >> week as regulators,

the chief of the imf saying that the ecb should carry part of the debt breakdown itself, which the ecbis against, and also, chancellor merkel warning -- do not demand too much of germany. germany's resources are also not unlimited. >> let's take a closer look at those market numbers. we stick in frankfurt where as we mentioned, the dax was little changed on the day. euro stocks 50 was down in negative territory, about 0.5% there. in new york, trading still under way on the dow jones industrial average, and it is gaining. the euro trading for $1.374. germany known as a major exporter, but for the first time in three decades, the country has reported that it imported more than it exported last year. in other words, it has a trade deficit. what makes it even more dramatic is that japan managed to run a surplus right through the two biggest financial shocks -- the asian financial crisis and the lehman brothers collapse. >> these japanese cars are bound for europe, does not amany as before. the country is also shipping of your machines and electronic devices compared to years past. japan ex

the first time as the new president of the ecb. expectations are high.iticians showed that they're not able to act, so let's see what mario draghi will bring here to davos. >> thank you for that. the cracks are starting to widen in the eurozone is fourth largest economy. spain's unemployment rate has surged even higher, the worst in the common currency and the worst in the industrialized world. to top it off, the country is expected to fall back into a recession this year. >> things are not looking good for the spanish economy. almost one person in four is out of work and the youth unemployment is running at nearly 50%. spain has the highest jobless figures in europe. in the last quarter, 24% of the working population where unemployed. that is half a million more than in the preceding quarter. spain's economy is shrinking to the government forecasts a drop in economic performance of 1.5%. the country is continuing to pile of debt. borrowing exceeds the eu's 3% debt limit. some severe austerity measures are madrid's only choice. the government has doubled

is parked with the ecb with banks too frightened to lend among themselves.banks are lending, they are filling their boots with money, low rates from the european central bank. >> i hasten to remind our viewers credit crisis and credit freezes are the worst thing that can happen at all. we're not there. we've got expensive and tight credit. when it freezes like we did in 2008 we have ourselves a global problem. let's hope we avoid that. diane swonk, great to see you again, chief economist at mesirow financial. my good friend richard quest with whom i will be working much more closely in 2012. have a great new year to both of you. >> take care. >>> the reason i'll work more closely with richard quest starting january 9th i will be anchoring a show called "world business today." it airs 9:00 a.m. eastern. not in the united states, it's in the rest of the world, 2:00 p.m. uk, 7:30 p.m. in india, 10:00 p.m. in hong kong, 11:00 p.m. in tokyo. if you're traveling around the world, make sure to tune in every day, "world business today" on cnn international. >>> one

a certain amount of control by the troika, by the imf, the eu, and the eurozone, whatever, and the ecb in that instance exerted on how they spend their budget because they want the rest of europe to pay for their budget. >> jim has something he wants to ask you. >> sylvia, where do the greeks think they're going to get the money if they don't list en to the rest of the people? >> that's exactly the point. they go out -- i understand that they have their difficulties in implementing the kind of measures they promised a long time ago but essentially, cynically, they go 0 out with a begging boat to pay for their debt. so that's -- if you go to the bank and you tell them i've got no money, give me money. the bank gives you the conditions under which you can get the money, and then you have to either take it or not get the money. this is the same that will happen here. the rest is saber rattling and posturing and ultimately either the greeks will deliver and it doesn't look like they do, there will be some kind of eu control or eu/imf/troika control. they will call it a nicer name. ultimate

interesting, be andy's comment earlier, the ecb took the place of the federal reserve in europe. and what they did there is what we did here. the banks are doing better, the companies are doing a little bit better. we're all doing a little bit better. the funding that they did, the qe, the quantitative easing in europe is helping everybody over there. so that's been taken off the table as a source of concern and uncertainty to a great extent for spain and italy. portugal and greece are a different story. if you listen to jamie dimon at jpmorgan, greece and portugal aren't going to be taking down the u.s. with the european banks. you put that together, get a little bit of growth as you're talking about, and then you have this ridiculously cheap stock market in the u.s. and other markets around the world. that's why you've got the selloff today that didn't become a selloff. >> andy bush, what about the feds' zero interest rate policy in all of this? is that going to damage the dollar? some people are saying since the fed made its announcement, the dollar rally ended. and if the dol

. >> o ecb? >> yes. so what is the basis of the foreign-policy? is there a goal of the foreign- policy of the czech republic? >> we have three priorities. the first is to be a good neighbor to our neighbors. which is the most unfortunate thing. of course. and we are -- we, as i said, are very good neighbors to our brothers, the slovaks, to poland. we had even a regional cooperation group that is called v-4, which we now happen to be the chair, the czech republic. it is a group of the czech republic, slovakia, poland, and hungary. all the countries are members of the european union. but we do have a lot in common. so our second priority, of course, is to be a good and valid member of the european union and to integrate this project -- even though we do have many -- i would say, not differences, but many issues how the european union should develop in the future. and we are just having this discussion in europe right now. and the third and, of course, not least one -- not in this order -- is the transatlantic ties. particularly the strategic partner

the ecb doesn't have referred credit to status. so i think this story with respect to the greek haircuts, still has quite a lot of room to run and run. >> okay. michael hewson joining us from c & c markets. thanks for coming on "world business today." andrew? >> thanks, nina. >>> as the euro zone debt crisis continues to unfold, the single currency is trading close to an 11-year low against the japanese. take a look at the patent off trading we've seen over the past decade or so. the yen, steadily strengthening in recent years and further harming japanese exporters. the europe single currency is down 43% against the yen. now standing at 97.29 to the euro. elsewhere, the euro has strengthened slightly against the dollar. it's still close to a 17-month low. take a look at the numbers there. euro against the dollar. 1.5310. we have more debt crisis coverage still ahead. at half past the hour we're live in paris to see how france is reacting to that s&p downgrade, ahead of a crucial test on the bond market. stay with us for that. nina?

average is 39%. >> you make a good point in terms of the ecb.can look forward to a round of stimulus in february. then again we're waiting on greece to do a deal. they have a bond payment due march 22nd. if they default, that could create a dislocation. how do you want to invest in this environment? you've been a dividend picker for a long time. todd, let me kick it off with you in terms of what you want to buy here. what do you want to allocate capital to in this environment? >> we like the small and mid cap stocks. those are areas of the market showing leadership. we think those stocks will continue to lead. we like the consumer discretionary, retail restaurants, for example. utilities, you've got low rates. >> and you've got dividends, of course. you've got a yield. real quick. >> technology, apple, qualcomm, intel. buy these technology stocks, maria. >> david, todd, good to have you on the program. we so appreciate your time tonight. thanks, guys. >>> despite the recent pullback, the s&p 500 is still up 4% for the month of january. historica

we figure most of the discussion was going on between the ecb and the imf on about whether the ecb was prepared enough to take a hit. i think actually that's where the discussions have been going on. nevertheless, ahead of the u.s. open this is where we stand, green on the board pretty much erased yesterday's slim losses by the close yesterday. right now up not quite a percent for the ftse 100 and the xetra dax and the ftse mib up 1.5. one stock to point out today, designs a lot of chips for apple, came out today. fourth quarter and really blew past estimates. the stock up. not quite the reaction to apple. they are reaffirming the guidance as well so expectations might meet or beat on that side. you talked about portugal. just come on to that. german unemployment today. hit an all-time low. the adjusted unemployment number since reunification. over here in italy unemployment hit an 11-year high so that shows you the disparities between the ten-year gilt, a sharp supply. more qe. portugal very briefly we saw the two-queer yield today hit a fresh all-time high. 21.5. we just came back to

the ecb. >> let's start with the bond auction. it was a real big test of the troubled economies of italy and spain. they returned to the international money market for the first time in 2012 to sell debt and raise much-needed funds. so far, so good. italy raised $11 million. the good thing, the yield. the interest rate investors demand these governments pay them to take on their debt dropped significantly. here is the thing. both countries are only selling short-term debt. it's a lot easier to get higher investor confidence on the short-term debt. the european central bank made available half of one trillion euros. these banks have money to buy bonds. experts say, credit where credit is due. investors are starting to believe spain is on track. listen to this. >> in contrast to other countries in the euro area, spain has made enormous strides. they introduced this that break into the constitution. it is a very rare occasion. of course, the austerity package is that you just mentioned. i would say that the market is taking -- >> in

we have the ecb deciding on interest rates today. it's widely expected to keep them on hold at 1.0%, pausing for the moment in terms of the interest rate policy for the euro zone. we have a couple of corporate earnings that are affecting things, particularly on this market here. the ftse 100. it's currently down by about 0.16%. we've had disappointing figures coming out of tesco. the country's largest supermarket chain. and also major change at rbs. that could involve the loss of 1,300 jobs. we have the likes of the cac 40 and the zurich smi up. >> pretty much green -- red arrows, excuse me, across the zone here today. the trading has been quite light, particularly in the china-related indexes because we are coming up to chinese new year and this does tend to be a quiet time between the christmas break and the chinese new year. the main story pretty much across the region, the one everybody has been focusing on, not just today but pretty much for the last 12 months, inflation. we have the december index out. inflation is easing down

>> they can do that quite a long time because they have the ec being -- the ecb backing them up. they have months ahead of them of this kind of stuff. >> oh, great. thank you very much. out to pakistan. is country's government locked in a standoff. on monday, the ruling party faces a vote of confidence. from islamabad, orla guerin reports. >> in the grip of a crisis and suffering more losses. today, pakistan buried two policemen. as well as battling that's enemy, the civilian government is facing a conflict with its own army. the military is on the warpath because of a mysterious memo, asking the americans to help prevent a coup. it was since last may in the turbulent days after osama bin laden was killed on pakastani sold -- soil. it conveys a strong, urgent, in direct message to the army chief. in parliament today, another crisis session. the interior minister insists the government will serve its full term until 2013. >> with democracy, there are ups and downs. yes, we do have a bumpy flights, but we landed in safety in a very nice way. >> but are you having a difficult time w

fact that just last month, eurozone financial institutions secured nearly half trillion years from the ecb a brand new tee-yea lending facility. >> and his international green week in berlin. the biggest food and agricultural eibition i the world. the trade fair is of particular inre t those involved in the developing markets of central and eastern europe. but one that the central themes is a local food production. th heen very topical with one food scandal after the next. factory farming is in the spotlight. e's dbtt s resulted in cheaper food prices, but it has led to many problems. >> germanympts l o fresh produce from spain. the business may be brisk, but it is not that a lucrative for spanish farmers. rm wholesalers drive a hard bargain these days. consumers are continually looking to save on fees. with low-cost supermarkets leadingheay t price war is intact. as a result, only around 10% of household expenditure in germa es on food. that compares to 12% in france and 14% in italy. it isos eenve in romania, over a quarter of consumer spending goes on food and drink. germans pay just 50

the ecb with loads of money for banks to borrow and they are doing it in droves. >> absolutely. that's a very important story. the european banking situation. we have just seen italy go to the money markets once again. a big test for italy. they went to the money markets to try to raise about $6 billion. they raised that $6 billion. the yield that they pay -- last time, they paid 5.6%. today, investors only demanded 4.8%. the expectations were huge. yesterday, spain went to the money markets for exactly the same type of short-term three- year bond debt sale. spain was very successful. the expectation of italy was that it would basically do the same. because there was such a difference between spain and italy, i ask an expert earlier -- as this investors judging italy against spain? >> we have to consider the differences between spain and italy, because the political situation is different. despite the fact that spain has an even worse situation than italy at the economic level, the political situation is more stable. there is a clear government. that will allow for the following

>> ramin, with the focus on bond auctions in europe this weekend, the ecb meeting, how are the currencies trade thg tuesday? >> the yen against the euro, a big focus there. let's look at the focus levels this tuesday morning in japan. you can see 98.21. already traded below 98 just in the last few days recently, so that's a major focus. if the bond auctions in italy and spain don't go smoothly, we could see further weakness for the euro. so that will be a major focus. generally with u.s. earnings coming up and european central bank meeting thursday and bond auctions, little more for investors to grapple in the second week of january, 2012. back to you. >> ramin, thanks for that. ramin mellegard from the tokyo stock exchange. >>> nissan and daimler are cooperating to produce gasoline engines in the united states. the japanese and german automakers are making engines former said east benz and infinity vehicles. they announced it sunday. nissan spokesperson says the automaker will begin the daimler engines in 2014 at a plant in tennessee. the alliance of nissan and fran's renault established

also note that the ecb dramatically slowing down bond buying in the eurozone. your yellow light, kind of stop, go, don't really know, stock investors still largely sitting on the fence, clearly nervous about putting their money to work at least in equities. look at this data from ici, investment company institute. they're the firm that track ths stuff. the data's about a week old, keep that in mind because they have to tabulate it. $9 billion in equity outflows the first week of january and inflow of $1.4 billion the second week $484 million outflowed. total still inflowed the last couple weeks most of that money going into bonds. here's the bottom line of this. not a lot of new money going into stock funds, but at least the money that's there isn't making a dramatic move out, which is our green light. volatility or lack thereof. investors who are already in this market, not that spooked, right. the dow had what? i mean tons of triple digit moves last year. hardly any this year. we had one earlier today, but the volatility index shows despite all the stuff we'v

the index attributes the upbeat mood to the cheap loans the ecb has offered to banks.t has prompted 500 million euros into the financial sector in recent weeks. it asks nearly 300 analysts and investors for their take on the economy. the positive report, britain was among the investors. stocks closed higher in europe. our correspondent has more from frankfurt. >> the stronger than expected index of the center for european economic research is proof that more and more economists and analysts believe that germany is facing a short roof break at best and not a long and hard depression. good news which field demand for stocks in frankfurt. more good news is that several eurozone estates, as well as the efsf, without problems managed to borrow money on the financial markets. this, too, shows that, at least for the moment, investors have become a bit more relaxed. >> let's get a closer look at those market numbers. in frankfurt, the blue-chip dax was higher, nearly 2% higher. a similar story for the euro stoxx 50. in new york, trading still underway for the dow jones average

the announcement was made after an ecb board meeting thursday at the bank's headquarters in frankfurt, germany. the decision came after two consecutive months of rate cuts. the bank wants to wait and see the results of lower rates. unrest in foreign markets continues despite additional measures to address the ongoing debt problem. the euro keeps weakening. china's new car sales slowed down significantly in 2011 even though the country remained the largest auto market for a third year in a row. the china association of automobile manufacturers say sale of new vehicles came to 18.5 million units. that exceeds 12.7 million for the united states. but the rate of growth was only 2.5% compared to the previous year. but a record increase of 32% was posted. analysts say the slow down is due to a reduction in government incentives for vehicle purchase. worries about the european credit problems also dampened consumer demand for big ticket items in the latter half of 2011. the global slowdown is weighing on japan's exports. the country's current account surplus in november fell for a ninth stra

they said that for several reasons, especially because of the fact that thursday, there is the ecb meetingand there will be two options of italy and spain on thursday and friday, and these issued new bonds of course, is uncertainty. investors fear they will be too expensive for spain and italy. this is also why the euro has been dragged down to this day. >> we can stay in germany for a closer look at the numbers to the starting off with the dax. it closed with a big blank on the screen. it was down by nearly 0.2%, 6152. the euro stoxx 50 sliding by more than 0.3%. across the atlantic in new york, the market opened in late trading down by 0.3%1%2,425. the euro is lower against the u.s. dollar, trading at $1.2699. >> human rights groups are planning to hold some international protest condemning the guantanamo bay prison camp as it enters its 11th year of operation. the american facility is a location where hundreds of people, even children, have spent years in prison without being charged with any crime or appearing before a judge. the camp is notorious for systematic abuse. it was set up by

the ecb had to step in today to buy bonds from those markets. italy and spain will have their first debt auctions of thehe yer next week. and s some ak economic data is adding to the fears over the eurozone era in germany, factory orders fell sharply in november, the biggest drop in three years as demand from abroadd weekend. the official figure was down, germany relies heavily on exports, andnd anasts do not expect a turnaround in coming months, but they say there is no reason to panic as sentiment among business executives remains positive. a better than expxpectejobs rereport from united states coud not offset concerns that the eueurozo is aded for a recessssion. stocks closed lower in europe. our correspondent has more from frankfurt. >> good news from the american labor market was simply not enough. in the eurozone, business sentg. the german manufacturing sector reports about less factory orders, and then the international monetary fund is considering another lowering of its growth forecast. all these factors w were just to much for the st