the head of the european commission says saving greece was simply not enough. now the alarm is sounding over italy and spain. the latest countries struggling with a loss of market confidence. our economics editor starts our coverage. >> two weeks ago today at their um theengt energy summit euro's leaders say they had made the tough decisions. the euro was safe. someone forgot to tell the financial markets. >> this is an abc news special report. >> we're interrupting your regular program. the closing bell is ringing now at the new york stock exchange where stocks have plunged this afternoon. >> today tens of billions of pounds were wiped off stock prices as fears about the euro fed into worries in america about the strength of their recovery. u.s. stock prices are back to where they were at the end of last year. >> a couple weeks ago markets generally anticipated that the ecp and the rest of the european players got together and found a sol oous to the problem. when you dig into the detail that lies behind the grand statement, it's very clear there is not a lot

international atomic energy marring times professor chris for a scientific secretary of the european commission on radiation risks many speak till after. the world. now the number of terror attacks and counter terror operations is on the wrong lines in russia north caucasus region just over the past twenty four hours a day for a dozen militants being killed by security forces well also has been a quarter of a joins us now live from the caucuses with the latest on all this and we do we understand that the counter-terror operation is still ongoing in the region take us through what's happening there. the latest the latest information that we have received is coming from change now where during an anti terror oprah gratian seven militants have been killed and one of these seven has already been identified he was one of the high profile terrorists working in the region of north caucasus he was also preparing a suicide bomb as well as he was planning future attacks in the region the identification of the other six is now in process of the chechen republic i was on a bit of said that this operation w

>>guest: yes, the problem is that big of the money that the european commission does not really have. they are saying, you said you had contained the problem and it would only affect a small number of countries, greece, portugal, ireland, that is where it was supposed to be contained and now it is spreading to italy and spain. and with these two countries that will be affected they know there is not enough money available so what are you going to do? it does not look as if there answers from euro. >>neil: very good, my friend, david, thank you. so this is the latest. gold was rocketing and retreating and old made a dive. all that glitters was not gold. and now, scott on the good and bad and i guess more of the ugly. what happened? >>guest: well the play-by-play is this: we started off this morning with an orderly sell off in equities and it looked ugly coming off of europe and then once we decided that it was now a panic, everyone was taking the money off the table and they reduced themselves to cash so that is why when you see the market trade lower like gold did, that tells me as an

not only the european commission, but also the countries themselves, riding their commitment in the constitution. this would create more credibility for the market. >> does this mean that we will see more in -- economic think it -- economic integration in europe? let's not only was it a huge commitment for the germans to agree on, which they were not in favor for some months ago, but france and germany said that they worked closely together and that in the future they would consult each other when they planned their budget. when they had regular meetings. i guess that already gives a sign. i think that the track is set for more integration. >> thank you. also coming out of paris today, a resounding no to eurobonds. >> the idea was dismissed a proposal that has been hotly discussed in the media. many are disappointed that the two leaders did not back the suggestion. issuing eurobonds was not a solution for today, according to leaders. saying that it would put the stronger economies in great danger and would only be possible at the end of the process of integration. the leaders have agreed on a ta

the european commission has given german energy giant rwe the go-ahead to it sell-off a high vaulted subsidiary. expense 11,000 kilometers. they say that it would not have any a larger effect on the competition. they would go to a financial consortium that is paying 700 million euros. rwe will retain strategic control. they plan to use the proceeds from the sales to help reduce its 30 billion net euro debt. a swedish company is disposing of swedish operations in poland. they will focus on germany and the netherlands. they are shutting down heat generation plants in poland as well as the distribution networks to two polish utilities. if approved by officials, the deal will go through later this year. with all of the gloom and doom about the world economy there is a bit of optimism on geany. they predict that exports will grow by 11% this year. they will take the value of foreign sales past the $11 trillion euro mark. political stability in the country could pave the way for smaller countries to invest there on top of the oil and engineering sectors. >> germany is mourning the loss of

a monthly european commission survey showed economic sentiment in the 17 countries using the euro fell to a measure of 98.3 in august from a revised 103 points in july. optimism declining in all sectors. the euro zone will need strong economic growth to put an end to the sovereign debt crisis. economists are expecting the euros on the economy to grow by only a 10th of one%. in an effort to get its debt situation under control, italy held a bond auction tuesday to raise fresh capital. the sale attracted few buyers. traders said the european central bank quickly stepped into the secondary market in order to prevent interest yields from rising to unsustainable levels. >> on the milan stock exchange, it is lower-than-expected. rome is trying hard to read how the market confidence. the prime minister's government has put forward a 45 billion euros austerity plan, but it is already being watered-down. a tax for high earners has been scrapped. >> unfortunately, there is a global economic crisis going on. we have to compensate for that somehow. " the government wants the measures through parli

the most opposition came from the european commission. they said it is good that germany and france called for more coordination in economic policies, but they were critical when it came to the joint economic governance. how can it work if there are only two meetings per year schedule? how can it work if none of the member states actually wants to hand over power to the european level? the other problematic part of financial transactions -- it will be difficult to convince great britain to join the idea. i think the ideas were well accepted. there is a chance that next summer they will be accepted. all those ideas were in the discussions before. many people have already approved the ideas in general. i think it is likely they will be adopted. >> let us go straight to monica with a look at inflation in the eurozone. >> inflation has fallen slightly in the 17 eurozone countries. in july, the inflation rate was 2.5%. that is 0.2% less than in the previous month. the decline in inflation follow signs of slower global growth. prices surged on

the european commission president sent a stern message to governments talking about growing market skepticism about their capacity to deal with the crisis, which, he said, had extended beyond the periphery of the eurozone. he urged a rapid reassessment of what more can be done. the european central bank did take action today, announcing it would step in to support governments under pressure by buying their bonds, something it has not done since march. bank presidents also had some stern words for national politicians. >> the key for everything is government ahead of the curve in both fiscal policy and structural reforms. i know that structural reforms are difficult and may be politically difficult -- particularly difficult in our democracies. >> today putt to fall was the biggest since the financial crisis nearly three years ago. the details have changed, but the mood in the market is starting to feel familiar. >> we take a look at the asian markets now. they have tumbled as much as 5% this friday. that is after the sell-off on wall street. it is the worst since the global financial crisis st

but there is a perception among the european commission is part of what fueled the crisis. >> we have had difficulty communicating in the agreement to the citizens. experience has shown we need to stand ready right after our crisis management tools, and head of the curve, to be effective. >> there will be no announcement today on eurozone bonds. jointly issued securities would make the debt of countries like italy and spain a common burden. the italians believe it is the master solution. the germans do not share that enthusiasm. nicolas sarkozy has added for closer economic governance. the loss of sovereignty that could result from the eurozone scheme, as well as the highest interest rate germans would pay, could be an immensely difficult sell for angela marco. and yet french and german leaders will be acutely aware that they will need something big to reverse the downward cycle of the past few months. it is the integrity of the single currency at stake. that is why huge emphasis is being placed on the meetings here at the palace. the germans are already plain down expectations. they

it stillwelcomes 2.5 billion dollars annually in foreign aid - 70 million dollars from the european commission's budget alone, millions more from eu member countries including cash-strapped greece and ireland. >>abou: we try to adapt smartly to this situation where we have to help a country which has huge financial means - but i can say that in spite of that, these programmes that we are helping would not be done if there was not our help. >>reporter: poverty reduction, environmental protection, strengthening civil society - these kinds of targeted programmes are actually political priorities for major donors like the eu, the us and japan. but there's also a legal explanation for aiding china. >>for sure, china has the means to dazzle by spending billions on events like the shanghai expo and the beijing olympics - not to mention a hundred billion dollars annually maintaining its military. and the country has also emerged as a multi billion dollar donor itself - though it's accused of propping up unstable african regimes as it seeks valuable mining rights to feed its industries. >>but despite hav

material since the disaster despite efforts to clean it up professor christopher possibly of the european commission on radiation risks says that nuclear energy to power should be abandoned altogether. it was very silly to build reactors on what is clearly a fault line and in an area where there are known to be. quakes. we see the result of having to you cannot really believe that you can create these things and expect them not to come out and not to have these sorts of accidents and other accidents will occur in the future and these accidents are so terrifying and the consequences of them are so pawling that really we cannot afford to use this method of generating electricity because you can't stop it just now because that would bring the whole of japan to a halt because it depends so so much from what we've got here is a situation where you've got fission taking place no most neutron concentration neutron flux and seawater. and then effectively we're producing a very large quantities of radio nuclides all the time and i haven't been able to deal with that we're talking about something that is abso

america but i think time we don't have anything about the european commission so it's a it's a very complete framework to be able to because we are within the countries to create an institution. that will create the kind of. silver and t. from this country france germany to a european institution and that's what why. that's why it's going to but we all need. to get driver more. away to think about europe and then probably. part of the. case germany would not. really be the chief we have two things because we know it's not. if we all go together in the same way you feel it best to thank you so much i'm sorry about the some problems there but did manage to get a conversation together thank you so much indeed chief economist at not texas asset management joining us live in paris thank you. well the european central bank has announced it spent an unprecedented twenty two billion euros in just one week the money went to prop up the shaking economies of italy and spain but it's all going to reports public faith in the ailing euro may already be beyond a quick fix. some work to live others live to

emergency phone conference of the g seven finance chiefs later on sunday earlier this week the european commission president joining the fight to plug the financial hole calling for the e.u. bailout fund to expand and help deal with the crushing debt just save on rubber also also wants the fund to be able to buy government bonds but the crisis is now engulfing two of its largest economies italy and spain both saw their borrowing costs showed up again but economics journalist patrick young says the banks have to stop cashing in on the troubles of the european union's be a light fund is on the verge of running out of money as soon as one of those major economies such as spin or italy default and every day the market is saying it is terrified of the debt that has been built up in the system and it's a bold by the fact that nobody in the euro zone wants to actually lead a side of this problem i think the public is being kept in the dark and it's been spent a lot of smooth messages from the political classes that don't really hold up to the stark reality of markets i think the problem is that ultimatel

leaders as the pressure mounts on them to take decisive action over the debt crisis and european commission president admitted spain and italy are now under threat and called for the e.q. ballo fund to expand germany's finance minister rejects of the call saying questioning the decisions of the recent e.u. summit but only calls one. worries on the markets i cannot return a list patrick young says it's high time the banks start accusing in the troubles for the sense of the european union's be alive and is on the verge of running out of money as soon as one of those major economies such as spinner italy defaults and every day the market is saying it is terrified of the debt that has been built up in the system and it's appalled by the fact that nobody in the euro zone wants to actually lead a side of this problem i think the public is being kept in the dark and it's been sent a lot of smooth messages from the political classes that don't really hold up to the stark reality of markets i think the problem is that ultimately banks are going to have to lose money as part of this entire play they

very unhappy with the activity and in recent months coming from the european union itself the european commission and. euro zone finance ministers and she's been increasingly critical of the fact that there is basically new leadership in the euro zone it keeps going these false agreements that signed wonderful everybody says the euro zone crisis is solved and there is within a matter of a few weeks we have a further crisis in another economy and we need more money so there's a very very fundamental argument going on within the euro zone within the european union and it's going to call for starter noon in brussels the euro zone needs to come together with sensible lose because at the moment they've been throwing money at any possible problems and all they're doing is wallpapering all for cracks in the edifice in the structure of the building and that just won't do now the french and the germans are appalled by this whole situation because they want to try and get together a kind of fuzzy warm solution to what goes on but it's just not realistic the french and the german government want to blame po

in scotland the trunk has run into a small problem renewable energy with the support of the european commission and the scottish government a massive wind farm is under construction mile and a half from trump's golf course and monkey here trump is not happy grain of the guardian newspaper trump has vowed to use any legal means make sure the wind farm isn't built because it'll ruin his view hello the energy needs a skyline trump needs his golf first to have a good view priorities people. trump has a problem with the renewable energy then he should just build more golf courses here in america we're smokestacks burning the fossil fuels that he thinks we should steal from iraq line his golf course and the very very ugly tea party leader judson. the c.e.o. of tea party nation was in wisconsin to rally and windell lean tea party crowd to fight the upcoming wisconsin recall much less but i will tell you ladies and gentlemen i detest and despise everything the left stands for how anybody can endorse and impervious an ideology that has killed up billion people in the last century is beyond me a billion

and your european commission will do regarding waiting for the funds into the relief fund because right now it is my view would be that it's not enough to sustain you know if you would have a serious serious situation in spain and italy. you know it's anybody's guess but it looks kind of boring to me ok peter weston chief strategist out on capital thank you so much for being with us and for your comments. right let's move quickly to the markets gold is still edging up what we've been talking about with peter eleven and a half dollars per ounce the silver being just a notch twenty cents that's after of course concerns over us and economies have been pushing investors over the past couple of weeks as we've seen a tremendous rally for gold this is of course a safe haven asset and it still remains so. while now world prices making a slight comeback light sweet fifty cents brant so one dollar fifty cents this hour light suites now stand. eighty seven dollars a barrel when it was eighty four the previous session. move over to europe the markets recovering slightly as we're looking at a positi

very unhappy with the activity and in recent months coming from the european union itself the european commission and the euro zone finance ministers and she's been increasingly critical of the fact that there is basically new leadership in the euro zone we keep having these false agreements that signed wonderful everybody says the euro zone crisis is solved and there's within a marker of a few weeks we have a further crisis in another economy is going to be more money so there's a very very fundamental argument going on within the euro zone within the european union and it's going to kick off a softer noon in brussels and also at the polish finance minister recently announced that the eurozone is at threat of disintegration and sharp contrast of course with the rhetoric we're hearing from germany and france. that's how much unity is there within the e.u. how much of a fight are we going to see at this meeting well i think we're going to see a very significant argument because let's face it we've got realists like mrs bowles and also starsky who you mentioned the polish finance minister is a thir

today it's it's a meeting between the america but i think time we don't have anything about european commission so it's a it's a very comforting framework to be open because we see that countries are asked to create an institution that. could create the kind of problems was very key from this country france germany to a european institution and that's what that's why it's going to keep it but the things i think we all need. to get covered more than it was a way to think about europe and in such case probably. we have two fronts theropod over i was covering the. entire case germany we know how we know really is the chief we have to share things because we know it's not thirteen on the if we all go together in the same way you can have their stuff thank you so much i'm sorry about the some problems that but at least wanted not to get a compensation together thank you so much indeed chief economist and not texas asset management joining us live in paris thank you ok. well the european central bank has announced it spent an unprecedented twenty two billion euros in just one week and money went to p