he will miss a two-day eu summit in brussels. he is recovering from eye surgery. moody's cut the ratings of 28 spanish banks it is another blow to spain after lowering the assessment of bonds earlier this month to just about speculative status. the latest bank downgrades range from one to four levels. the largest banco santander a two-notch reduction to be aa-2. the largest bank, affected, bankia was also cut by two levels to the speculative rating of ba2. many other banks are also now considered below investment grade. moody's says the downgrades are due to a forecast rise in uncollectible loans due to the collapse of spain's real estate bubble, and that is in addition to the impact of the rating cut of spain's sovereign debt. spanish leaders have turned to the european union for help. they asked for a bailout as many had expected. and hours later the leaders of cypress asked to be bailed out too. government officials did not specify how much they need. but they said they would use the fund to shore up their troubled banking sector. banks suffered heavy losses ea

, weaker eu countries want and what germany, which is the strongest eu country, can actually give. so we'll see how that plays out. back to you. >> all right, ramin. thanks a lot for that update, ramin mellegard from the tokyo stock exchange. now both the nikkei and the topix are down just about half a percent this tuesday morning. that is the latest for me from this hour. i'll leave you with a check on how other asian markets are opening this hour. >>> eu foreign ministers have confirmed a ban on imports of iranian oil. the ministers have been frustrated in efforts to get the iranians to halt their nuclear program. so the sanctions will go into effect on sunday as planned. nhk world's takashi ichinosa reports from luxembourg. >> the sanctions that have been agreed will be implemented from the 1st of july an embargo on iranian oil imports. >> reporter: eu foreign ministers approved the embargo in luxembourg on monday at a meeting over iran's refusal to halt uranium enrichment. this followed last week's meeting in moscow between iran and five permanent members of the u.n. security c

the eu leaders stressed that the eu will address mid to long-term issues by unifying ways to supervise euro zone banks. they said the move will help stop a negative sfirl in which banks lose healthy business operations when government bonds they hold are downgraded due to poor fiscal policies. >>> iranian officials say their country will continue producing highly enriched uranium. the officials expressed their resolve in a new round of talks on iran's nuclear program. the first day of a two-day meeting in moscow ended on monday. it had the negotiator and delegates from five u.n. security council permanent members and germany. the eu foreign policy chief katherine ashton is attending. the delegate says it's impossible to discuss halting the uranium enrichment program. they added the country has the right to continue with the program for peaceful purposes. the comments were an official response to a proposal by the western countries at the previous meeting in baghdad last month. the western delegates at that time suggested they would ease some economic sanctions on iran if the country st

two-day eu summit is beginning in brussels later on thursday. urgent problems to be addressed include how the eu should deal with greece, the country's new government wants to ease austerity measures. procedures to rescue spain and cyprus is also going to be on the agenda. the two countries asked the eu for financial help earlier this week. the eu recognizes that belt-tightening policies are dampening the economy rather than contributing to fiscal reconstruction of the region. to achieve an economic recovery, the leaders hope to agree on a $100 billion euro economic stimulus package. measures include recapitalizing the european investment bank which is the eu's long-term lending institution and encouraging private sector investment into infrastructure related projects. to deal with the crisis the leaders are expected to discuss the idea of integrating banking supervision and introducing common eurozone bonds. however, opinions are divided over these issues. for one, german chancellor angela merkel has made clear once again her opposition to the

for years, the island was known as an eu tax haven. foreign investors who wanted a place bonds year came to financial advisers for help, but this has rattled investor confidence. he hopes cypress will hold on to their tax advantages even if it receives an eu bailouts. >> nowadays, the corporate taxes in 10%. there is no taxes or dividends blowing -- flowing to beneficial owners. as you know, the island has kept the low tax rates. that has been agreed by the european union. therefore, i believe cypress can achieve the same treatment. >> small-business owners like this one accused the business -- the government of delaying reforms for years. he predicts a bailout will not improve conditions. >> again, with a bailout it will be reduced some people will not be able to spend as before. generally, the prediction of our association is that 2013 will be worse. >> his store may stand empty for years to come. >> c1 was hiring on a second plane that flew there to help to look for the pilot who was still missing from the first plane. now the turki

. >>> the eu president will propose greater integration in banking supervision at the eu summit that begins on thursday in brussels. he'll also suggest the introduction of common eurozone bonds. herman van rumpi issued a report on friday entitled toward a genuine economic and monetary wr union. he drew up a plan for the next ten years with three other eu leaders. the report proposes integrating banking supervision to prevent bank failures which burden state finances and calls on member nations to get approval from the eu if they need to issue government bonds above a certain level. another proposal is the introduction of common bonds that would be jointly issued by member nations. but a heated debate is expected as germany and some other members oppose the bond plan. they're concerned that richer countries will have to cover the costs for debt ridden members. >>> greek prime minister anthony samaras has appointed a respected economist to fill the post of finance minister. the prime minister's office said samaras chose the leader of an influential economic research group. the first ch

eu has providing funds to portugaf strict austeri measures. on monday, asked the european union financial assistance t just hours made t move. and when t rating moody's cut the 28 also it's yet anothspain, lowered assessment of the govern month to justlativestatus. the ldowngrades ranged from onenotches, largestbanco santander a two baa2. cut two theative rating to many other ban consideredgrade.towngrades are rise uncof spain's real estate of thebt. >>> stocks york following n's banksout for investors were week'seu to the dow jones industrial average last friday's close day's session 12,502. for more here are trading this go ramin mellegard, who is tokyo stock ramin, l i else off t some positive >> definitely, very ai and really ta lower a a turn fors final week in of with inv grips wi eurozone debt iss also questions in china,europe and volatile trading that commodities andave a look and the are tradingmorning, both nikkei and 740.course stos in the u also uncertaintie eu and su kick offlot of whether some of those be that's markets, an we a

this has been the function of the eu institutions. remember what we had for the last 20, 30 years has been this incremental progress towards more integration and it has worked very well and particularly when it comes to big bank enlargement that was a successful policy. crisis management is not necessarily going to be the strength of a consensus based organization which is what the eu is, hence the disconnect with markets where markets are expecting answers in the short term which will take longer. you saw for example germany talking about the need for a referendum. there's been interesting public opinion data out of germany which suggest physician a referendum were held on today in staying on the current currency. when asked has germany done enough 37% germans think germany has done enough. merkel is facing elections next year in 2013, the case in italy. it could be that in the german case the spd they are campaigning on doing more on europe to your point. no one is talking about comprehensive solutions but i think that there is open

there has to be further decision by an eu council. before that's in place nothing will happen and the time frame is for the end of this year or possibly beginning of next year. the next thing then the esm could theoretically start buying. so countries have to qualify as well-behaved countries and then this kind of access to temp sm can be granted. not quite so simple. >> the esm may have to inject funds in banks from january 1st. ties in with the timeline you're talking about. give me the sense of the politics here. has germany given in at all on anything? because the view is spain and italy won, italy won in football last night, they won in the summit, had germany taken a step towards a liability that they didn't want to have? >> reporter: no i don't think what they have. germany hasn't gotten anything to take home. they were prepared to give in, to they just wanted a bit of a tit for tat. they wanted something more tangible on fiscal union. what they agreed to at the moment these are the short term fixes that the market needs to sta

brazilian presidency wanted to put the final draft on the table, but that lack the ambitions from the eugermany. they sort of played hardball and said, no, we're not going to sign a declaration that does not work. so they went into a night session, which we hear was quite heated. this morning, they actually came up with the new draft which is slightly more ambitious. actually, there are three key elements in it. the environmental program of the united nations will be upgraded institutionally, so they will fall short of a fully fledged u.n. organization, but they will get better funding probably and there will be more important. there is strong wording on ocean protection that is a compromise. the one to establish protection zones for oceans. then the green economy was mentioned. one has to say it is a very, very vague declaration, so the ngo's a very disappointment despite the so-called breakthrough. >> thank you very much for that. well, the rio sustainability summit is the culmination of decades of discussion, conscious of growing pressures on the environment of a global leaders and en

eu officials said they're ready to provide that and more. the finance ministers are still wrestling with the challenges of greece. the new government wants to relax austerity measures necessary for billions of dollars in aid from the eu. the eu officials will visit government leaders in athens to check on their plans. they fear they will have to help out the troubled neighbor once again. nhk world, luxembourg. >> eu officials find new faces on the other side of the table in greece. prime minister anthony samaras has launched his new coalition government. his party won elections but fell short of the majority. samaras persuaded the parties to join the coalition. the leader has pushed to carry through with the austerity program of spending cuts and tax increases. the inauguration of a new government ends nearly two months of political deadlock and dampens speculation that greece will leave the euro zone. greek leaders must implement the austerity measures to continue to receive eu aid. the leaders of all three ruling parties pledge to negotiat

the eu also okayed aid to malta for air malta.s of headlines coming along here. >> final word from erik, we talked to randy about stocks in california. i mean, i suppose it's like cyprus, you know, to the eu. it's not a big deal. probably a big deal if it was california, but the -- the difference is, when a section of the united states gets into problems, it is part of the united states with a brady bond and that's what we need to recreate in europe, right? >> exactly. nobody is talking about this or the fact that california is in -- bonds are in default at the moment. nobody's talking about that as presenting a risk for the dollar. that the dollar will collapse as a result of that. that's why the flight to safety means essentially a flight into dollar denominated assets, which is benefiting munis and a variety of other dollar assets as well. that's exactly the problem in europe. we don't have that feeling that the whole structure is underpinned by a set of arrangements that mean there is no circumstance in which the euro will col

the eu expressed its willingness to help. its assistance would be limited to aiding commercial banks, not the government to that suffering from heavy budget deficit much like greece. it's not considered easy to calm market worries about spain's fiscal trouble. the eu aid would further increase the amount of its debt. ours after spain's announcement, a cyprus said it would also apply for eu rescue funds. cyprus is the fudge country to ask for such a bailout after greece, ireland, portugal and spain. >>> muslim brotherhood candidate mohamed morsi has been declared winner of the presidential election in egypt. but the new president election faces challenges bridging divisions in his country. nhk world reports from cairo. >> reporter: after the big celebrations of morsi's victory, people are still occupying the square to protest against the morsi government. >> egypt remains in upheaval. the military has passed laws limiting the new president's powers. young protesters in cairo's tahrir square are not happy. >> translator: i will

the two leaders said the eu will produce short to mid-term measures. and target for easing pressures. they include unified banking supervision for europe. ed leaders are trying to get a better grip on the financial assets in each country. the eu is also trying to create a close fiscal union. >> this isn't what it will make possible to achieve lasting confidence and truly sustainable growth. these steps will show the word that the euro and european project are irreversible. >> what's the united states -- >> reporter: they are getting increasingly frustrated because the crisis is dragging on. it has started hurting the u.s. economy. the u.s. thinks that richer eurozone countries should give more support for its struggling members. >> reporter: chancellor merkel urged stronger leadership to overcome the crisis. the united states plans to ask china and other emerging economies to implement stimulus measures and to try to expand the domestic demand. >> they'll do a joint declaration, do we know what it's going to say? >> reporter: the eurozone members are l

>> i mean, you know, it is -- >> eu summit?the eu summit, some of that is factored into today's trading. i think that, you know, we are highlighting the world now. as you look at what's going on for us, it is not that pretty. the u.s. economy to me even with the -- growth is still looking better than anywhere else. we are looking at the bigger picture. >> sean, didn't get to ask you before what you would invest in. what r there opportunities? >> they have fallen in global commodity prices and good for the emerging markets. particularly china, starting to get back on their growth path they had. >> you mean by commodity relate. >> i would probably -- look to -- the en countries, china and asia at the moment. they welcome a falling crude oil price. great banking systems. strong balance sheets. great economies, just being hit by high inflation over the last couple of months. >> all right. thank you both. heading towards the close. peter, sean, nice to see you. one of the more popular bell ringers today, executives from harley david

another crucial eu summit. >> you know what? every one of them absolutely has been and will continue to be. i think capitulation at some point that we are all in this together. it's been said so many times on this station how, you know, in many ways the eu is a political union but not a fiscal union, now the realities of the fiscal union need to do that, and you need to have a sort of central bank and a sort of euro bond. it's the only way this will get solved. austerity is not the only way do it. we are seeing austerity is actually hurting countries ability to get healthy again so we will have to lead with fiscal policy a fiscal band dade around the entire euro to allow austerity to take a back seat for a while to allow for growth. once we get growth in, which is what everyone needs, then the austerity are kick in more. that's starting to take hold. you will see this back more and more part of the debate. >> yeah. whether the germans want to write a check is a different matter. let's talk about greece. stay with us, ken. greeks

the eu summit wraps up later today. markets not really looking for anything concrete to come out of that. also, bond yields in italy and spain are very high. and on a separate note, ai, interesting that spain and italy are actually in the finals of the euro 2012, as there's such a big focus for their fiscal health as well. so interesting tie-up there. back to you, ai. >> sports mirroring life, ramin. ramin mellegard from the tokyo stock exchange. ramin just mentioned japan's core consumer prices fell in may, the first decline in four months. the internal ministry said the index in may was down 0.1% from a year earlier. the index excludes the prices of fresh food. the fall in prices of home appliances like refrigerators and personal computers. >>> tokyo stock markets are down half a per september this friday morning. i'll leave you with a check on how other asian markets are doing. >>> the u.s. supreme court has upheld president barack obama's health care reform law. 26 states had challenged the law. they claim the indiv

so this is very much not a, you know, eu-15. it's a very, a group with everyone in, basically, and you know, once vasilav klaus is out in the czech republic, who knows what the czech republic will do and we're in a situation with 26 visas vis-a-vis one. unfortunately the politics i think of the uk is almost certain to keep it out of these deep sovereign issues. how that is going to be squared away with, vis-a-vis particularly the financial markets and the role of the city of london is a really good question. i mean, i guess i have some faith in the fact that at the end of the day, as it was actually came out a couple of weeks ago in a euro skeptic think tank open europe, had a report on, you know, what should the uk do in this, and they actually came out and they said, and these are people who, you know, your skeptics saying at the end of the day, the uk had more to gain from being inside than outside, so i think they will remain a member of the eu, but whether or not it will be more sort of a special relationship than a full me

economic hope to $1 economic measures irecapita investment bank eu's lendingate sector infrastructure deal with the crisiare expected to ducing common bonds.pinions are these for one, german chanerkel has once again h idea of common e >> translator: enforcement of unified ame mistakes. >> merkel that if introd not achie have to bear the burcountries. >>> ahead of summ hi following improve data. end 12,627. now for details on how morning we're goin mellegard, who tokyo .u.s. housing boosted optimism being here to to definitely ai in the first ading, pendinge out a littleo that's boosting marke however as so taking more from the summit today. out. the eco u.s. has really k at the you can nikkei is trading however a a tight rangee to check volume lit less than average here and abroae in the having said road between the french and s really not anything maj concreterom the eu. neve majorfor financialgoing forward judging b currency the a sl let's have a foreign the fxll and ag at the euro/yen, 99.28-35 soe a little bit the also bit againstollar but holding prettyt the lemin, i hear some na

eu officials demanded budget cuts in return for billions of dollars in aid. but the parties in the coalition have also pledged to renegotiate the terms of the bailout. >>> and that concludes this edition of "newsline." i'm catherine kobayashi in tokyo. we'll update the news at the top of the hour. xxxxx

now the eu wants the treaty to come into force next january. ireland is the first of the25 eu signatories to hold a referendum on the issue. recent opinion polls in ireland showed a majority in favor. however, a growing number of people are rejecting the treaty as a symbol of severe austerity measures and spending cuts. ireland was bailed out by the eu and the imf after it was hit by a financial crisis in 2010. if irish voters reject the referendum it could affect their eu bailout. >> i voted yes. very reluctantly, but i dn't see any better option. >> i voted no because i don't really believe voteing in something that i don't believe is going to work. >> i will leave you with a look at the figures. >>> human rights activist chen guangcheng has urged china to learn from eastern democracies like japan or south korea and establish its own style of democracy. the blind activist escaped house arrest in the chinese province of shandong in april and sought protection at the u.s. embassy in beijing. he left for new york on may 19th. cheng delivered his

. >> the eu commission getting ready to work with failing banks. is it too little too late? >> finally australia's economy gross at the fastest rate among the developed countries. putting further rate cuts in doubt. >>> hello, kelly. >> hello and good morning. >> good morning. what a morning. my goodness. >> long day in store. >> it's a really interesting week because there's a lot going on and yes we're double-shifting. we're sending a whole bunch of people out all over the place to cover all these events. ecb, so people all over the place. it's interesting being here in the studio and getting all the feeds in. >> people are forgetting that we got the bank of england meeting, ecb meeting. all the while trying to figure out what kind of details we'll get from various regulatory bodies, the next steps in europe. >> also now of course the ftse traders back from their prolonged holiday. maybe the market action will pick up a little bit. on today's show we continue to, with our full coverage, we go the iff conference in copenhagen. buying greek debt is the quote trade the year.

eu bailout funds will be made available direct to struggling banks. the eurozone will work on plans for a banking and fiscal union. the president of the european council, herman van rompuy, claims the agreement was a breakthrough. the latest from brussels -- >> after 13 hours of talks, they got what they wanted. italy's prime minister is happy. spain's leader is all smiles. europe has agreed to a direct bailout for troubled banks in those two countries. it gives them and the euro breathing space. some see it as europe's richest nation caving in. angela merkel said there were conditions. >> [speaking foreign language] >> i think we've done something important. we still maintain there is nothing without getting something in return. >> in the early hours, talks have stalled over europe's 120 billion euro plan for growth. that is for the long term. europe's leaders are positive about the deal. >> the decision shows once again the commitment of the member states, the versatility of the euro. >> written is not in the euro, but david cameron has been urging

tracey has more. >>> investors and anxieties over the outcome of the eu summit. weak start after that long holiday weekend. the composite slipped 6% hitting its lowest level. the biggest losers, markets will be waiting on china's official june pmi data expected to be out this sunday for fresh clues on the economy. and hong kong shares failed to stay in the green either finishing about half a percent lower and tokyo dipped lower, weakness centered on europe expo exposed stocks. the kospi moved down by 1.2% with bellwether electronics traging the broader index. australia up by half a percent as well closing at a three-week low. india sensex is the clear outperformer trading up actually just about stepping down tomorrow paving the run as president of the country. as kelly mentioned earlier, the rbi has interviewed a series of steps to stem the weak rupee slide. back to you, ross. >>> tracey, thanks for that. the government has announced a specific amount of funds in the request, though. it's july the 9th. stephane pedrazza has more. no word on the amount. that would

this is to centralize banking control among eu members. the proposal is not likely to take effect until 2014 at the earliest, though. this has led to criticism that it would not be effective to resolve the current banking problems in spain. >>> all right. positive start to the nikkei and topix. i'll leave you with the latest in markets. >>> the presidents of china and russia are getting nervous about what will happen once nato troops pull out of afghanistan. they are meeting in beijing with the leader of four central asian nations. their discussions have underscored the dynamics of the security situation in afghanistan. the leaders started out by agreeing they will do what they can to bring more stability to their neighbor. u.s.-led multinational troops are scheduled to withdraw from afghanistan by the end of 2014. so members of the organization are expected to increase their involvement in the country over the next two years. and they are considering inviting afghan officials to future summits under the status of observer. the leaders als

and the eu trade deficit deficit, 4. billion. sterling was already down this morning on the measures announced last night with george osborne and king. u.s./sterling is up to 0. 140. gilt yields are lower at 1.667. let's show you the rest of the markets, yields are lower in both spain and italy. spain, 6.83%. we broached that 7% mark. 6 opini 6.05 for italy. european stocks up a bit. the ibex has been a sharp out-performer this week. it's bouncing off nine-year lows and it has been bank stocks that have driven that action. plenty to talk about. let's remind ourselves with what happened last night in the city of london. the bank of england and the british government are joining forces to boost growth. the chancellors told an annual gathering of financiers that now is the time to coordinate banks and i dundustry. >> in order to inject new confidence in our financial system and support the flow of credit where it is needed in the real economy. we are not powerless in the face of the eurozone debt storm. >> meanwhile, the package inc

the eu says the country cannot have both. >> a bailout has brought misery to greece. it -- to make demands a we're not able to honor. we are the party that gives greeks hope. >> it is an attractive message in a country that calls the cuts a hardship. >> like most agreed towns, it is bustling -- buckling under austerity. people are fed up with chronic mismanagement. the question is whether creeks will feel they send their message of protest and come back to the political mainstream for fear of leaving the euro. >> small businesses may be in tough times, but greeks want to keep a single currency. could that swing the vote of back in favor of the pro- bailout center right? >> i was so angry at the two big parties. i was pleased with myself. and now i don't think i will vote for them again. i was able to find out about them and what they represent. >> but the recall remains strong for a nation craving a new start. there are the ones to watch this new election, the rising greek left challenging europe. european union leaders have warned that a government that tries to turn

eu foreign policy chief katherine ashton is also attending. the iranian delegate says ipts impossible to discuss halting the program. they added the country has the right to continue with the program for peaceful purposes. the comments were an official response to a proposal by the western countries at the previous meeting in baghdad last month. the western delegates at that time suggested they would ease some economic sanctions on iran if the country stopped enriching uranium to levels used in weapons. a spokesperson said that iran is simply repeating old statements. meanwhile, a high-ranking iranian official said the western countries need to win iran's trust to make progress in the dialogue. the talks will resume on tuesday. >>> economic growth is vietnam is catching the eyes of the world. another key factor attracting foreign investors is deposits of valuable minerals. japan is reaching out to vietnam to help it step up production and have its own future supplies. nhk world has more. >> reporter: japan has looked at vietnam as a provider o

much of that comes from the eu's social fund. the workers are paid up to 400 euros a month, depending on their qualifications. the supplements their modest welfare payments. >> it is an opportunity for the unemployed. the question is -- what are their long-term prospects? so far, we only have funding for one season, but i hope the project will continue. it is now under way, and we will do our best to see it carries on. the most of the team are from nearby. many from the village itself just beneath the castle. there is a severe shortage of work here. as in many communities of eastern slovakia. many have left to look for jobs in the more prosperous west of the country. they recently set up a chicken coop next to the apartment building they live in and bought some hens. they could not afford to buy eggs in the shop. this machine fitted could not find a job. he lives with his wife and children and father in law in a three-room apartment here without a proper income, life is tough, though the state does provide child allowances. >> i

the eu president will propose integration into banking supervision at the eu summit that be guns on thursday in brussels. he will suggest intro ducts duc common euro zone bonds. he issued a report, entitled towards a genuine economic and monetary union. he drew up a plan for the next ten years with three other eu leaders. the report proposes integrating bangi banking pervision. it also calls for member nations to get approval from the eu if they need to issue government bonds above a certain level. another proposal is the introduction of common bonds issued by member nations. but a heated debate is expected as germany and other members oppose the bond plan. their concerned that richer countries will have to cover the cost for debt-ridden members. >>> now let's take a look at what is taking in south korea. our reporter in seoul, sue choi. >> reporter: one reason is a massive outage that gripped the country a year ago. the power failure affected 1,620,000 households and businesses across the country. [ siren sounding ] >> reporter: last week the government conducted blackout drills that involv

we had a rally in europe ahead of their eu summit tomorrow. we're going to the highs of the education at 12633, the dow trading in a tight range through much of the day following that early rally this morning. nine of the ten s&p groups lead by energy and health care getting a booth because of arena pharmaceuticals weight loss drug. by the way, shares of eqt midstream are on fire today hitting session highs now as we head toward the close. it is the first company to go public more than a month after the fb trading debacle. are things turning around? or is it a company specific issue. >> joins us is scott cutler. >> took a month to get a company to go public again, huh? >> yeah, we had a brief delay? >> why? is it connected to facebook? >> i don't i think it's directly linked to facebook, you had bankers telling companies not to go public because of the greece elections. we have this deal today, another tech deal that prices tomorrow night, and the pipeline looks more optimistic. but again, i think we see good signs of things to come. >> i was

definitely until the end of june, this month, because their main task is to get the money from the eu, the imf, to pay the greek government bonds. so concerning the repayment schedule in july, i think the end of june is a critical point for the political issues. >> okay. i guess also speed with this will also keep the confidence of both investors and voters. >> right. yes. i think the response of the financial market is just a shortfall. i think the financial players are thinking this is a good occasion for them to reverse the accumulad position t-- afterwards, th are just watching what will happen. as i said, especially, how rapidly the greek parties will form the coalition cabinet. i think it tends to be negative. they want to say again. that might lead to the contention to the other european countries, especially spain. >> can't let you go without getting your thoughts on another big story today. of course, the g-20 summit is coming up. european lders a leaders from around the world will be discussing ways to contain the european debt crisis. >> yes. >> what's going to be their mos

cyprus is the fifth eurozone remember to ask for financial assistance from the eu rescue fund.spain is also in trouble. after madrid applied for an eu bailout to shore up its banks, moody's downgraded 28 spanish lenders. >> it shows how they see us and how solvent they think we are abroad. >> investor confidence in spain's banks is already tumbled. the downgrades now make it even harder for them to get their hands on fresh capital. they are sitting on billions of euros of toxic assets. the question of how to prop up spain's faltering banks will be high on the agenda at the talks in paris. >> so far, germany has been able to buck the trend of eurozone economies, thanks largely to strong exports and steady consumer spending to the german consumers are not immune to concerns about the economy. our correspondent has more from the frankfurt stock exchange. >> here on the floor of the frankfurt exchange, the people do not believe that the german consumer can avoid the effects of the crisis in the end. but for the moment, the very sturdy labor market here and rising incomes for german

definitely until the end of june, this month, because their main task is to get the money from the eu, the imf, to pay the greek government bonds. so concerning the repayment schedule in july, i think the end of june is a critical point for the political issues. >> okay. i guess also speed with this will also keep the confidence of both investors and voters. >> right. yes. i think the response of the financial market is just a shortfall. i think the financial players are thinking this is a good occasion for them to reverse the accumulated position to -- afterwards, they are just watching what will happen. as i said, especially, how rapidly the greek parties will form the coalition cabinet. i think it tends to be negative. they want to say again. that might lead to the contention to the other european countries, especially spain. >> can't let you go without getting your thoughts on another big story today. of course, the g-20 summit is coming up. european leaders and leaders from around the world will be discussing ways to contain the european debt crisis. >> yes. >> what's going to be

preliminary discussions between japan and the eu concluded at the end of may. wednesday's decision to delay will come as a blow to european counsel president herman van rompei. he had earlier expressed his wish to meet with prime minister yoshihiko noda in july and discuss the final start of the trade talks. >>> for an update on the weather forecast, sheers mai shoji. >> we have been tracking the tropical storm. it will be moving toward the eastern coast of the philippines and likely to turn into a hurricane. storm warning posted against eastern luzon and some of the islands of the philippines. it is now moving at the speed of 20 kilometers per hour and wind gusts packing 126 kilometers per hour and likely on sunday morning, just around that local time, this could pack winds and gusts up to about 200 kph. now this is directly impacting the area with high waves as much as five meters in the eastern seaboards but also enhancing and exacerbating the southwestern monsoon. we have been talking about this for a long while now. the western seaboards will also see thos

the eu has already expressed its willingness to help. its assistance would be limited to aiding commercial banks, not the government that's suffering from a heavy budget deficit much like greaece. the eu aid would further increase the amount of its debt. spain is the fourth country to seek eu assistance after greece, ireland and portugal. >>> we'll be back with more updates in 30 minutes. i'm gene otani in tokyo. from all of us here at nhk world, thanks for joining us. .

we are on the back of the eu summit.ning a corner or is this a fleeting rally in jason is from glenn meade and charlie smith from ft. pit cap capital. welcome to both of you. >> thank you for having me. >> is this fleeting or is there something more to this here? >> i vote for a fleeting moment, carl. if you remember in october, we sought same response in the summit around greece. the ecb came in december with the rltro that the markets got going. so i think the central bank is where we want it focus our attention instead of the stop/start summit result. >> by the summit bank you mean the ecb? >> yes, definitely. >> what is to think you from thinking that day two might take on a larger role if merck el and germans can change the way things change collectively. >> i don't think they need a larger role, they just need to continue what they are doing every six months or so. politicians will kick the can and put the central bank when it comes in when things really get tight and that's been the pattern for, you know, over two

from the rest of the eu. see the eu providing support for its own. my colleagues at deutsche banc are encouraged for the first time it looks like spain is getting ahead of the curve and hopefully they don't come back and ask for anything more. >> they have to probably raise capital on their own, however. and that's going to cost them a lot more money to do so. >> so far we see with this program, favorable interest expense thanks to spain borrowing the eu's greater credit rating and i think also importantly, there's capital buffers being put between the ecb and the assets of weak banks throughout europe. that shows them more comfortable in an emergency. >> bob pointed out the fact that the italian banks are seeing the biggest percentage losses at the end of today's trading sessions. are you worried about it sfli we keep going from one country to the other certainly but the two main areas of concern on a large scale have been spain and italy. >> one concern to the other. when one fire looks like it's been conta

. >> instead, merkel wants the eu to have more power when countries failed to meet obligations or break you budgetary rules. merkel says there's too much talk of joint liability but not enough about improved control measures. >> there has to be a balance between supervision and liability. supervision and liability have to go hand-in-hand. joint liability can only be considered when sufficient supervision is insured. >> merkel is standing firm, but she has made some concessions. on friday, both houses of parliament vote on the fiscal pact and european stability mechanism. merkel needs votes of the opposition to secure 8 2/3 majority, but they have set conditions for that support, such as a task to cut u.s. unemployment across europe. -- on measures to cut youth unemployment across europe. >> we are relying on this government and on you, chancellor, to insure that our agreement is reflected in the outcome sent to the european council. that is the only way you will see 8 2/3 majority. >> but among german voters, merkel's tough stance is popular. opinion polls show the majority reject everm

the eu anticipated the bailout spans banking system would cost around 100 billion euros. madrid was expected to officially request e you help on thursday, but that has been postponed at least until next week. the spanish government faces growing pressure from the financial markets. interest rates on its 10-year bonds surged above 6% on thursday. >> the new government in greece says it wants to renegotiate the terms of the country's bailout. but it has pledged to of all targets on deficit reduction and that control and vowed not to endanger greece's place in the eurozone. >> the cat net one that has also been announced. -- the cabinet has been announced. it does not include parliamentarians from junior partners. >> with grease voting to stick with the international bailout and the euro, european leaders are focusing their energy on making sure no more bailouts are needed in the future. >> the goal is a eurozone fiscal pact. so far, only france, greece, as lavinia have ratified the agreement. >> in berlin, german chancellor angela merkel is wheeling and dealing to get broad

many lawmakers are concerned about the eu's decisions, especially that the esm should be able to aidtressed banks directly. but angela merkel defended the brussels accord. she said funding recipients would be subject to strict and, long-term, that would help stabilize the euro. >> there is a legal connection here between sound policy and solidarity. that is a very important. we back the euro. we want it as our stable currency. we believe we can run our economy better with it, that our living standard will be higher, and that is why i am is seeking agreement from you all. >> while many in the opposition are wary of handing over more power to brussels, the general consensus in parliament is that the common currency must be saved. >> and voting has just begun after that debate. let's go to john who is following things from our parliamentary studios. is the government going to get its two-thirds majority? >> i think that is very likely. i just returned from the chamber. and just to clear up a possible misunderstanding, because i think in the international media, this is often being and a

commission has examined that this country is actually in a position where it has fulfilled certain eugetary discipline and budgetary rules. otherwise, there will be no money. >> that was from brussels. >> there was no rest for angela merkel after that late night of+ wrangling in brussels. she flew right back to berlin for a major debate in parliament on the euro crisis. >> the bundestag is voting on both the eurozone's new rescue fund, the ees and, and a fiscal pact aimed at government -- cutting government debt. >> two-thirds of the majority is needed to ratify each of the bills. >> the atmosphere in the german parliament was tense in the lead up to the vote. chancellor merkel needed a two- thirds majority, which meant a lot of votes from the opposition to approve the fiscal pact on budget discipline and the new eurozone bailout fund, the esm. many lawmakers are concerned about the eu's decisions, especially that the esm should be able to aiddirectly. but angela merkel defended the brussels accord. she said funding recipients would be subject to strict and, long-term, that would help