be a forced restructuring, contrary to what the european central bank wants or not, these are all open questions. we'll get back to them on "world business today." let's ask specifically about where we're going to end up with greece now? are we going to end up with a default? is this package likely to go through that you and i were talking about. let's get on the line to journalist john sur rop loss in athens. he joins me now. john, clearly the vote of confidence was something papandreou could expect to pass and he did pass. no fraying at the edges. next week's vote on this huge package of austerity measures is likely to be a different matter, isn't it? >> it is. because the government has no leeway to negotiate. it's been handed down by greece's creditors, the eu, the european central bank and the imf. they have to accept it wholesale and pass it. it's very difficult because it contains 4 billion euro's worth of public sector spending cuts

party says that this is a sham. >> the banks have sold a large part of their greek debt to the european central bank. the debt restructuring means that the people of europe will have to pay for this. the banks have already sold out to the european central bank. >> despite this skepticism there was a resolution showing support for a second bailout. germany will have to show that private investors will have to bring back the euro from the brink. >> the french president is going to be in berlin next friday, nicolas sarkozy. angela merkel will try the them to support their position on the 23rd and 24th of june. >> steve is here to talk about the cheerleading for christine. >> the imf has a two-horse rase between -- race between france and mexico. it is said to be unfortunate if the next person running the international monetary fund is from europe. it is becoming obvious that christine lagarde will get the job. >> her last stop was in lisbon, where the chinese development bank was having their annual meeting. she got the backing from africa for her candidacy. however, she does not have the support of in

a key demand of france and the european central bank. >> we want the involvement of private creditors on a voluntary basis. i want to stress this. there is no legal basis so far r the beingobligatory involvement. and we also say that this involvement with private vedtors must be worked out together with the e.c.b. >> meeting the schedule for the european bank all next week, sarzoky and merkel want concrete proposals to be presented at an e.u. summit starting in a week's time. >> the markets are unhappy about all of this. >> this is all about restoring confidence, and it worked. at least for the time being. queakt markets in europe ralliedn frida ashe default eased back a bit after germany softened its position on shoulders a part of the burden. financial shares got a boost. the uniteds stand by merkel and sarzoky on a bailout package for greece, bolstered investor sentiment. sending equities and the euro higher. so after sinking to three-month lows, stocks bounced back. >> equities and the euro made a jump of joy after the meeting of chancellor merkel and president sarzoky. of course,

some favor a debt restructuring but the european central bank says that option would amount to default and it would have far wider repercussions. well, the man in the hot seat is the governor of the european central bank and richard quest sat down with him. >> our position as far as the governing council is when known, i submit up. we are in command because we are not taking the decision ourselves. these are decisions taking by executive branches. and we are telling them don't embark into schemes that would be compulsary. we are advising them to have voluntary scheme and to avoid schemes that would trigger credit event or selective default or default. that is very clearly our message from governments. but it is their responsibility. >> but a voluntary scheme, and we don't want to get into the mechanisms of what it might be because there are so many variations. but most people seem to accept voluntary is in some part inevitably going to be compulsary. >> again, i have said very clearly what is the position of the governing council. >> so you're not then impeccably opposed to a reschedul

debt is owned by them, even though they're divesting themselves of it by selling off to the european central bank, still it would force them to collapse. it would force many german banks to collapse because they are more exposed than they would like to be to greek debt. finally, enormous recapitalization pressures on european governments to bolster the european central bank which has 45 billion euros worth of greek debt. it would trigger a new bank bailout, round of bank bailouts. it's not an attractive option. there's also the question of a gentler sort of default in the form of reprofiling of bonds by extending their maturity and opening their interest coupons. that is seen by the ecb and ratings agencies as unattractive because it will be seen as a credit' haven't. don't forget the pressure from the credit default swaps market which says we've invested in betting against greece. if greece is let off the hook and allowed to default, we're going to lose our money. we've taken very wise positions because we never thought greece would make it. there are all sorts of arguments against default at th

going to bring this down is the european central bank itself an organization that all the member states have put money into and the point at which greece defaults and it's coming it could come with a couple of weeks in my opinion a point at which greece defaults you will see the european central bank itself effectively will be bust because they've used all this money buying up effectively their own bad debt and then when the hat goes round i just can't see countries like finland countries like the netherlands putting money in so we could be fairly close to the whole thing bustling but. if it does collapse in the way you're saying what happens i mean you were talking earlier and we've heard obviously that greece have talked about dropping the euro and then going back to its own the original currency but just how easy is that transition we've got can countries already in debt i mean is that really the answer to revert back to those old currencies again well the greek prime minister who just resigned as the cap and said there is no alternative to the austerity package and staying in the eu

some european politicians are backing off from demands that bank and in shares shoulder part of the burden of show of -- of restructuring the debt. >> the european central bank president was in berlin this thursday for a courtesy visit ahead of his expected confirmation to the post. no official statement was released after the meeting between the president and angela merkel. they discussed the eek debt crisis as well as other economic and finaial issues. he is expected to succeed jean- claude trichet as ecb president later this year. as the debate cononnues over expanding the burden borne by private investors in the greek bailout, ireland is pushing for a similar option for their debt crisis. the finance minister said that he would like senior debt holders to shoulder more of the 70 billion euro bill. the move would mark a reversal of the policies set by the previous government to protect owners of senior securities this is a consistent with the new -- this is consistent the policy that the burden on taxpayers should be minimized. ireland is working to solve a debt crisis in which they had an $85 billion bailout from did eu and imf. they would need the

central bank and yesterday we heard from the european central bank. so the focus is on interest rates. >> that's right, catherine. and the ecb didn't raise interest rates yet for this month, but many are expecting them to do so next month. the european central bank announced that it willeep its key interest rate unchanged as the credit crisis continues in greece. at its policy board meeting in frankfurt on thursday, the central bank made the decision to keep the rate at 1.25%. in europe, the credit crisis continues in greece as it struggles to rebuild its economy. the central bank kept the interest rate unchanged at a relatively low level, making it easier for companies and financial institutions to borrow money. however, concerns over inflation continues in europe as crude oil and food prices remain high. many market players anticipate that the central bank will hike its key rate in july. >> on balance, risks to the outlook for price stability are on the up side. accordingly, strong vigilance is warranted. on the basis of our assessment, we will act i

federal reserve and european central bank on the back foot if you consider the fed is about to stop its current round of easing by the end of this month and the european central bank is still set to raise rates perhaps in july. moving on to the currency markets and how that's affecting the dollar/yen and euro/yen staying in a tight range compared to monday at the lower 80 yen levels for the dollar/yen and around the mid 115 levels for the euro against the yen. u.s. data this week is going to be critical for market players, who want to see that after the recent unimpressive data out of the u.s., if that was just a blip or if there is sustained proof in the numbers that we're going to get this week on inflation, housing and retail sales that the u.s. economy is, in fact perhaps faltering. there will be critical economic data there. many attributed recent data in the u.s. to the march 11th disaster, because that did supply, disrupt the global supply chain so they have been looking into the finer points of those economic data. later today japan's going to get revised industrial production i

that is the integrity of the european central bank itself. warned that you can't go on buying a vast quantities of your own that i'd. mr. barroso, do you accept that the finances of the european central bank and its integrity is now in a serious and powerless state? [applause] >> no, i don't accept. but think the european central bank is a very credible institution that is managed great wisdom and diligent than i think the independence respected by all of the member states of the area and of course we know there are some difficulties. as i party sacrament they are not on the difficulties. unfortunately, your criticism is always pretty logical. the problems on average, the taxes lower than the death of britain's for the example. in fact, we have the different problem because it's the first time we have kind of this modesty and of course we have some are integrated institutional sentiments. that is where we are now trying to have a country of response and that effort you are making with financial stability to the area. >> jos yesterday the resp

sorry it's not central banks it's not private banks they're going to pull through this pretty well at the end of the day but it's the populations of those countries want. well the european central bank has bought up a lot of greek banks so they will pay but yes it will be than the ordinary population that will pay they paid when the euro was introduced to lead to higher prices in their shops that was deeply unpopular in greece and it's now helping to create a very deep vast within the greek economy so really it is that it is no ordinary people of greece that are paying for something which they never actually asked for where the political elites of you got together decided that it would be a nice idea to have a common say but of course didn't listen to economic reality and it will be their populations that will pay the price unless of course they recognize that they have made a mistake by creating the euro and they begin to have their own currencies and manage with all of the euro that would be the appropriate way for rightly and journey. times of our run out of time here and nothing has been resolved our eyes on july third many thanks my guest today in london and in was

bailouts but problems remain as germany and the european central bank argue over how to get private investors to contribute. the u.s. navy vessel in the black sea sparked outrage from moscow and claims it's a prelude to the planned nato missile defense shield for europe the u.s.s. monterey docked in odessa at a joint military exercises in the area. next artie's daniel bushell sits down with french far right leader marine le pen who's taken over from her famous some say infamous father who ran for the presidency five times and of next year's presidential elections in france she shared her views on the country's politics. to win an unprecedented first round victory in france this presidential elections next year she says that france is on the verge of revolution but what tuck the extra expect nicolas sarkozy to use to try and stop the winning power. but you know i don't think there is a risk of a person a sincere and a fan's he's a her own ideas there is no reason to warry the greatest danger in connection with nicolas sarkozy so he may again do what he did in two thousand and seven namely make

the fiscal rules so your body the credibility of the monetary policy it was outsourced to european central bank so now you have the crisis would lead to better fiscal policy i don't want to say this war but european fiscal authority that and this could lead to a war that a lot of people in the euro zone afraid of expression i mean someone said to me once roll in which all that was really quite interesting is that everybody should stay in the euro zone except for the germans they should lead the euro zone and then things might work out better what do you think i think they've probably benefited more from the eurozone than than than anybody else and i think the euro zone actually is a great political invention and has been very successful actually politically if you think about european history and what do you have that's that's the heart strings i mean i used to be a professor of european history i can absolutely agree with you i mean creating unity here but can you do that look to can you do that monetary really and maybe it just takes a much longer time than they had expected i mean we have co

germany's finance minister told the imf and the european central bank that a new package should allow more time for greece to repay its loans and he also said taxpayers in the private sector should shoulder some of the burden of the additional bailout. >>> sonny pictures has told more than 37,000 customers that their personal information may have been compromised in the latest hacking attack to hit the company. hackers raided sonypictures.com, the entertainment arm of the company last week it seems. sony said the stolen information did not include any credit card numbers. >>> you're watching "world business today." coming up, she's traveled the world in an effort to win the top spot in the international monetary fund. we'll take a look at that, just ahead. [ female announcer ] together at last. introducing new stouffer's farmers' harvest with sides of lightly sauteed farm-picked vegetables. find more ways to get to the table at letsfixdinner.com. >>> from cnn london, this is "world business today." welcome back. the french finance minister christine lagarde's visit to china is enterin

the european central bank and bank of england wrap up policy meetings. both are expected to leave interest rates unchanged. >> suzanne: money is on the way for farmers in europe after a huge e. coli outbreak. the european union will give the growers emergency aid totaling more than $300 million. tons of unwanted vegetables are rotting in fields over fears they're contaminated with a deadly strain of e. coli. those crops will be destroyed. the source of the outbreak is still unknown, but it has killed more than 20 people. >> tom: demand is dropping for personal computers-- so says technology research firm gartner. the group cut its growth forecast for p.c. sales this year to 9.3%. it originally estimated that number at 10.5%. gartner says consumers don't want mini-notebooks known as netbooks. instead, they're buying tablet computers like apple's ipad. as stocks have moved lower this month, investors again learn the lessons of diverisification and defense. tonight's "street critique" guest finds safety in food, electricity and telephones. she's hilary kram

there is a note of caution that optimism echoed by the european central bank, juan claude trichet. we must point out that now that the greeks have passed the awe stairty pl -- austerity plans they have to implement them. gains, modest ones though, ftse 100, up by 0.5%. lloyds banking group is moving today after confirming it will be cutting 15,000 jobs by the year 2014. >>> let's move along and talk about the currency markets. the euro has been strengthening against the dollar. currently trading at 1.4510 and the british pound bouncing back as well. that one trading, 1.6103. japanese yen at 80.37 at the moment. banks were among some of the big winners across the asia pacific region. hong kong led the charge for most the day with hsbc and the bank of communications performing especially well in that market and even though the nikkei ended the day in flat territory, citigroup stock finished about 3% higher on the tokyo exchange. is this how the markets finally settled. let's take a look at them. the nikkei putting on 0.2% for the day and the hang seng up by 1.5%. the s&p asx 200 in a

central bank and european central banks go in and engage in extraordinary measures like they did in 2008 to keep the funds solvent and the dollar a share limit. so it's a worry, but i think it's probably a manageable worry unless you have two or three countries default at the same time. >> susie: for people who want to play it safe, what investment moves should they make? >> i would migrate up the quality scale in every asset class, whether you own bonds or stocks, you want to migrate up to big conservative stocks with a global foot print that have gentlemen graphically devirs -- diversified. you want to go towards high quality triple a rated debt. it's not a time to run into a fox hole, but it's a time to put up a fence because there's a lot that could go wrong. migrate to quality. >> susie: and what about if you own a business, are there any moves you should be making to protect yourself from what's going on in greece and europe? >> well, the risk is that the financial crisis, the financial sector seizes up and goes into a crisis again, and we lose access to credit from banks and finan

but in his acceptance speech, the head of the european central bank talked about the difficulty of handling the debt crisis without being able to impose solutions on indebted governments. >> you have to stop individual countries from enacting policies that hurt themselves and the entire eurozone. >> jean-claude trichet is calling for the establishment of a central finance ministry to coordinate economic policies in the eurozone. national leaders are unlikely to agree. >> gree isrying to solve its debt problem by privatizing part of its industry. >> a german company is very interested. deutsche telekom is buying an additional 10% stake in a greek telephone operator. the telecommunications giant alady has a 30% share and has to buy the next state in your -- under a deal with the finance ministry. athehe wants to get rid of its tireolding in athens and# elsewhere, thousands of greeks continue to demonstrate against austerity measures. there is a 24 hour strike to protest the deal with deutsche telekom. >> they are trying to prevent the privatization of their company. the asset sell-off is inte

>> most of the running is made by the eurozone and european central bank but what the i.m.f. has insisted, if they are going to release the next slice of their lending, they need to see tough austerity measures and two, they need to see promises of financing from the partners going quite a long way into the future and it's a judgment call as to whether they have seen enough of those to let the money go. but those are the areas that they need to be comfortable with. >> developing countries with a european in charge of the i.m.f. and they fear that their needs will be ignored. >> it's hard to say what developing countries want but brazil, russia, india and china lined up behind the europeans. many would say they are more qualified thanla guard and has been the finance minister and central bank governor and works at the i.m.f. >> now why is it that lawyers are getting the top economic jobs these days? >> having been in this position myself, i would be wary, however, if anything is serious going on, people have lost faith in economics and economies and not because economists disa

. >> auditors from the imf, at the e.u., and european central bank agreed athens should a group receive -- should receive the next installment of their bailout, but they also want more caps on public spending from the debt stricken country. >> the chairman of the euro group and the greek prime minister or relieved to hear that athens had qualified for a second bailout. >> it is obvious that there will be no exit from greece from the area. greece will be able to fully honor its obligations. >> auditors from the imf, the eu and the ecb give a positive assessment of their efforts to rein in public spending. that paves the way for athens to receive the next installment of 12 billion euros in bailout funds. the money will come from the 110 billion euro fund that was set up for that purpose a year ago. there are also increasing signs greece can expect additional financial support of up to 65 billion euros. but the cash injection comes with conditions. athens must continue their austerity measures and cut spending by 78 billion euros by 2015. but many ordinary greeks are fed up with making sac