cards ecb president bush jean- claude trichet was among those you aligned with the then finance minister to welcome the new era -- the ec president jean-claude trichet was among those who aligned with the then finance minister to welcome the new era. less than one decade later, it is in crisis. >> this is a national debt crisis. this is what remains. we are seeing this especially but not only in the southern countries. there is uncertainty in the banking system, and we are heading to serious trouble if we do not help greece, because we will have to bail out the banks. no one is speaking about the problem right in front of us. >> agreed that is a major challenge for the euro zone, and it is -- agree to that is just a major challenge. -- greek debt is a major challenge. some think it could even become a curse. >> the german economy grew last year at its fastest pace since reunification, with exports leading the charge. higher consumer spending has now also become a major driving force behind the recovery. >> in this germantown, business is picking up again at the restaurant. -- in this ger

of course, its concerns about rising prices -- jean-claude trichet's comments last month about the market's strong vigilance. the stronger eurozone countries will not welcome a rate rise whatsoever. asphil tyson explained why the ecb is so focused on inflation. >> it wants to get control. % andabove the ceiling of 2 that is key for the ecb. it wants to show it is tackling inflation. it will be looking at the core eurozone economies and the data there. >> let's take a quick look at the markets, starting in the asian region. i have to say chinese banks are certainly leading the charge in asia after the announcement yesterday that beijing has once again raise interest rates. it's the third time this year. just like we were talking about with the eurozone -- tackling inflation. european markets will be keenly watching not only the interest rate decision, but the very important speech from jean- claude trichet post announcement. we will be talking about this live at about 12:45. >> thank you. iran's president, ahmadinejad, is engaged in a public fight with the supreme leader. the supreme leader

. >> praise for portugal from jean-claude trichet. it will privatize more state assets than stipulated by the e.u. and imf and will raise taxes. those are reasons why the european central bank is bending its own rules and will continue to lend to portugal despite its junk debt rating. >> we have decided to suspend the minimum collateral requirements for the purpose of assistance and credit operations. in the case of marketable debt instruments by the portuguese government, this extension will be maintained until further notice. >> the eurozone debt crisis cannot stop ecb from raising its key interest rates. benchmark rates go up to 1.5%. but during the financial crisis, the bank rapidly cut interest rates to historic lows to stimulate the economy. inflation tumbled as european economies contract, but most have recovered and inflation has had it back up and is now running 2.7%. the ecb is using interest rates to slow it, but critics say will only make those harder on eurozone governments that are struggling with massive debt. >>> plans

meantime, german media reports president of the european central bank, jean-claude trichet, is asking big banks for advice on dealing with a euro- zone country going bankrupt. brian wesbury is the chief economist at first trust. so brian, is europe for of a threat to american investors today compared to where we left it last week? >> i don't think so, tom. i think we got hit by obviously the employment report last friday, the debt talks in the u.s., but then obviously renewed fears in europe. and there's a lot of unknown in europe about how far this will go, about whether banks will have to take cuts and whether that can be linked back to u.s. banks. so i think the fear is just there, and remember we were on fire over the last seven or eight trading days. so i think we just gave some of it back up as these fears were renewed. >> tom: you mentioned some of the uncertainty, the latest bit of uncertainty is italy, italian dealt problems. how real is that risk of italy? >> you know, i'm sure a lot of these are real. i don't think italy is in as bad a shape as greece is. i mean greece is i

on thursday, the central bank's president jean-claude trichet told reporters there's no change in theank's view and strongly against any measures that would be considered a default. >> our position is clear in the case of portugal, we are waiving the threshold. in the case of greece, where we have psi, where we have these debate on the nature of psi we say no to selective default, full stop. >> members are considering a plan to ask private sector investors about a voluntary rollover of greek debts, this would prevent funds from flowing out of the country. this comes at a time when a leading credit rating agency has said the new bailout plan would still likely be considered as a default. >>> separately the ecb has raised its key interest rate by a quarter of a percentage point to dispel concerns about the inflation in the eurozone. this move brings the key rate to 1.5%. the central bank made the decision at its board meeting held in frankfurt, germany, ona. it's the second rate hike since mid-april, when the bank terminated its extremely low interest rate policy. this measure was adopt

that was asked of jean-claude trichet. this is what he had to say. >> what is important in our view is the condition that greece is an absolutely exceptional situation and that for that reason it requires exceptional and unique solutions. >> who will decide whether this is a game-changener the euro-zone as many of the leaders were saying, that will be the markets. we'll see how the markets react come friday. jim boulden, cnn, brussels. >>> and we have indeed seen how those markets have reacted. they're broadly speaking as manisha was showing up two minutes ago speaking up. the bond markets reacting, yields coming down on that. some of the euro bonds being slightly less risky. i spoke with an analyst earlier today and he said for the moment some seem relieved by the decisions made in brussels. let's go to david jones. he joins us live from london. good to see you again, david. how relieved are you over what was said in brussels overnight? >> i think it's very fair. we've seen a good recovery yesterday ahead of the announcem