the bailout started eighteen months ago every single bailout has increased the amount of debt greece portugal and ireland well perhaps and that exception but greece and portugal certainly have more debt today than they had when the bailouts began at what point do we realize that these bailouts are not helping these the first bailouts in history that are scooping and ladling water into the boat eventually they're going to sink it you know sort of struggling and almost an isolationist line here how does that tally with for example britain going into libya i mean isn't it sort of isolationism on the one hand expansionism on the other on the contrary if you think that what i said was isolationist i probably didn't make myself very clear i want britain to be a truly global player and not locked in a small room in the north west coast of europe doing everything with two or three other countries i want us to be truly global players it's right that we're global players by virtue of locking ourselves in the diplomatic room with europe i think we have less influence than we would have let britain after

doing pretty well that i think is the answer for greece for portugal for ireland probably for spain and for italy another way perhaps of looking at it is that maybe the german center of the euro zone should be allowed to establish its own currency whichever way you look at it it involves breaking up the euro and greece has recently said admitted really that it's not going to be able to meet its obligations certainly for the next year and possibly six years under current circumstances how much the british banks stand to lose in greece portugal and ireland well british banks are liable for quite a lot of money billions of pounds at least that used to be regarded as quite a lot of money until our government started printing it you know. the case the british banks are going to take a hit and they're going to take a hit not because of some abstract problem in the eurozone they're going to take a hit because their investment teams on their fixed income desks bought greek and portuguese and other government debt that they regarded as fixed income but turned out to be a really bad investment no

because they don't follow the rules but then you create a system make risk and a system a chris greece portugal spain italy then but now the confusion about. greece. and italy and portugal the situation the domestic situation of the nature of the crises the greek crisis and the nature of this situation in italy are part of a radically different then probably there is no real macro economic reason to have this done in a crisis and and that's why it's very important that the political decision will really. confirm i give trust to the market that we solve greece we solved the governance issue of. the federation of europe if we can say so and there would be no way to confuse the greece situation with the. irish of portugal so this is good news but. the good news i would like to hear for russia from my country is will the ripples of the european debt crisis reach emerging markets like including russia. yeah that's an important issue i think again we are also in historical times because now we are moving to a. global organisation and a g. twenty prefigure at this mill to poor organisation and this my

this year early next year some sort of solution and it could be devised that incorporates greece ireland portugal spain perhaps in a total kind of restructuring package either that or greece is going to have to unilaterally default. on to new york now where thousands of protesters that have been camping out near wall street have spilled onto the roadway causing part of the brooklyn bridge to be shut down and now let's cross live to our correspondent who is in new york for us so maria thanks for being with us or you're there what is actually happening on the ground. well this clash and confrontation between and why he gave the new york city police department and thousands of protesters took place on the brooklyn bridge now these protesters that have held camp down by wall street have been demonstrating for about two weeks this demonstration started by wall street and then the protesters rallied towards the brooklyn bridge when they got on the brooklyn bridge the police showed up and basically cornered off both sides of the brooklyn bridge and started to move in on the protesters to make arrests fo

when you do that amount of austerity and i'm thinking about countries like greece, portugal, ireland, spain, what you have to expect is you've got to expect deep recessions in those countries. we have seen that already in greece. we've seen it in ireland. we are going to see it in portugal and we will see it in spain. that has a material impact on both those countries' growth prospects but it also has a material impact on the european banking system and through that, we get recessions in france and germany. i think the implications for the united states should be that there's a sense of realism in making our policy decisions, that we shouldn't be making our policy decisions on the basis of rosy global scenario that is going to help the united states get out of its difficulties. i think that rather, in my mind, this would have bearings on how quickly one does the withdrawal of stimulus from the united states economy, that would be one aspect that one would have to look at, but the other aspect is when one does one's budget projections, one should be basing this not on the rosy scenario

of bailing these countries or one of the bailouts are these bailouts helping the people in greece and portugal are now they're not what they're actually doing is they're giving money to these countries to give back to our banks who over lent the money in the first place i mean the whole thing is mad what these countries need who are trapped inside this economic prison called these they need to do you value without the value. ation they're having austerity packages pushed upon them which is forcing them into a downward deflationary spiral which in my opinion in greece and possibly in portugal too could lead to revolution what we're doing is stupid and very very dangerous indeed so more austerity measures for the people and more bailouts for the banks as you say the banks are the ones who caused this crisis in the first place the e.u. commission president jose manuel barroso has called for coordinated strengthening of the region's banks in any way shape or form to help avert another recession or is it not just another way of lining the pockets of the banks to. what it is it's a way of preparing

happen now is that senior economists will begin to put together a contingency plan that allows greece portugal and probably are to leave the euro to reshow jule their debts to get a new currency that devalues maybe fifty or sixty percent as iceland proved back in two thousand and eight sometimes it's best to take the bad news is to accept where you are and start again and that is what needs to happen now serbia is the latest country aiming to join the e.u. it's candidacy has been put forward by the european commission on wednesday and what benefits are there when the region is struggling so much i've heard some analysts describe joining the eurozone as rats jumping onto a sinking ship yeah well it's very stupid and again this is the political class of europe that want to do this. i mean serbia and serbian politicians of course will all become multi-millionaires if they join the european union's about extremely attractive to them if not to the serbian people themselves but look i would think about this just a decade ago we had the croats and serbs killing each other involves numbers so they cou

possibly sixty years under current circumstances how much the british banks stand to lose in greece portugal and ireland well british banks are liable for quite a lot of money billions of pounds at least that used to be regarded as quite a lot of money until our government started printing it you know. the case the british banks are going to take a hit and they're going to take a hit not because of some abstract problem in the euro zone they're going to take a hit because their investment teams on their fixed income debts bought greek and portuguese and other government debt that they regarded as fixed income but turned out to be a really bad investment now when my constituents buy shares in a company that's badly run and lose money the government doesn't step in and underwrite their loss so i'm very very concerned that taxpayers in my constituency will be asked to bail out banks that brought this upon themselves now if if it is the case that we are going to have to prop up some of these banks because these banks have been so badly run such victims of their own greed that unless we do so our

when you do that amount of austerity and i'm thinking about countries like greece, portugal, ireland, spain, what you have to expect is you've got to expect deep recessions in those countries. we have seen that already in greece. we've seen it in ireland. we are going to see it in portugal and we will see it in spain. that has a material impact on both those countries' growth prospects but it also has a material impact on the european banking system and through that, we get recessions in france and germany. i think the implications for the united states should be that there's a sense of realism in making our policy decisions, that we shouldn't be making our policy decisions on the basis of rosy global scenario that is going to help the united states get out of its difficulties. i think that rather, in my mind, this would have bearings on how quickly one does the withdrawal of stimulus from the united states economy, that would be one aspect that one would have to look at, but the other aspect is when one does one's budget projections, one should be basing this not on the rosy scenario

greece, portugal, ireland, italy, and spain are all in danger of defaulting on their debt. we asked mark phillips to keep track of this fast-developing story. >> reporter: in greece, economic riots have become the new national sport, the frustration among those who see no gain to the pain they've been forced to endure again spilled on to athen's main square. the government has been forced to bring in more austeritiy measures -- wage cuts, tax increases, public sector layoffs-- to satisfy the european creditors who are trying to bail it out. and the result was eye national strike and this. the fear is of contagion, that if athens defaults on its debt, which is about 1 and a half times the size of its economy-- and many think default is inevitable-- what happens in italy, where the debt is 120% of economic output and where the country's credit rating has just been lowered by a second agency. britain's prime minister says the economic dominoes could be set to fall. >> the euro zone is in crisis. the french and the german economies have slowed to a standstill. even mighty americ

in addition, the issuing bank of greece, portugal, italy, and spain are getting tax infusions from the eu, known as target loans. these are also put by germany for 113 billion euros. all germany's stakes currently add up to 379 billion euros. this is far more than the german federal government have budget for the entire year of 2011. >> our business reporter is with us now for more input. we are talking huge sums of money. the german taxpayer is not happy about putting this bill. what does this mean for the german economy? it is horrible for the taxpayer. the burden for the german government is very tight. some experts already expect a recession. >> why is it so crucial for banks to accept this severe hair cut voluntarily? >> it is very important but the rating agencies keep their current ratings. if they see the hair cut as a forced measure, it certainly would have negative consequences. they could interpret it as a default. this would be a disaster for european countries and pension funds. this could lead to a chain reaction in europe. >> thank you for joining us in the studio. as we

first off, these various governments in greece, portugal, ireland, italy and spain, they have to encourage their people to go along with these deep austerity moves and cuts. that's going to be a challenge politically going forward. on top of the european news, we have decent news on the u.s. economy. it grew by 2.5% in the third quarter nearly doubling the rate in the second quarter and was three times better than the first half of the year. credit consumers for a lot of that. despite the worries over consumer confidence we have seen of late, consumer spending rose 2.5% in the third quarter on cars, furniture, clothing, all sorts of things like that. as a result, we're seeing very strong gains on wall street. look at the numbers again. dow gaining 370 points. well over 12,000 now. nasdaq is up by 94. s&p is up by 45. frank and grace? >> pretty much recouped everything it lost during that topsy-turvy spin. >> reporter: it's hard to say whether or not the volatility is done but i think it will ease back now that we have a near-term fix on europe so hopefully things will smooth out and then w

this year early next year some sort of solution and it could be devised that incorporates greece ireland portugal spain perhaps a total kind of restructuring package either that. greece is going to have to have to unilaterally default and it's that not only europe fighting financial troubles over in the u.s. hundreds joined a march in lower manhattan for a protest called occupy wall street their target is corporate greed and social inequality parties and stuff here tryphena well. the protesters are here for a simple reason they feel duped and defrauded by the system that planned on street greed pick up the financial meltdown that led to an economic collapse one in six americans are currently living in poverty bankers were held unaccountable and it was the people left to suffer distributer the skeleton of a revolution or the beginning of point possibly as high profile activists and scholars started joining these crowds it became harder for the media to ignore these demonstrations it also became hard for most americans to not take these crowd seriously as police brutality started to turn last weeke

problems that similar with debt but the euro is just really screwed because you know you bail out greece portugal and ireland and italy and then who knows who else will line up because if you can fail you're allowed to fail. when i was at the same petersburg economic forum year and a half ago everyone was still talking about the euro replacing the dollar as the reserve currency if there was going to be an alternative and it was ludicrous then . and that was very common of course over the whole last decade that people every time some oil sheiks said he was going to buy his oil in euros people thought the dollar was tanking what we see in this crisis of the extent to which the capitalist classes around the world look to the american state as being their guarantor and i must say in that sense the german bund a spank which really is the ethos behind the german central bank has since the one nine hundred seventy s. unlike the fed been extremely irresponsible every time that there's a crisis it acts in a typical bankers' orthodox way and that bankers orthodox way is always to look to the restriction of

and the worries, the concerns are spreading now, not just, you know, the usual suspects, greece, portugal and ire happened but to spain, to italy and very recently to france. so it's not contained any more. it's starting to spread and the contagion, if you will, is starting to worry a lot of analysts. >> and you included, here. exactly how bad could the damage be if the solution we hear on sunday or even the middle of next week isn't large enough? >> well, certainly the armageddon scenario, the lehman moment for europe could involve a very deep recession, a freezing up of their banking system, and at which could be just pretty horrific. so europe could go through a true second dip, something along the same leans as it did three years ago. very deep recession. as i said which could probably drag the u.s. back into a recession again. that is the double double dip scenario for the u.s. as well. >> what are the signs that you are looking for late sunday night to let you know if the european finance officials have a big enough solution. >> well, the key here is are they going to mostly through