greece was not able to reach an agreement with private lenders over the hair cut. at the same time, concerns are rising that portugal will face similar problems as greece. belgium could sell easily 5-year and 10-year bonds at a lower interest-rate and slowly confidence is coming back. >> in frankfurt, we will have a closer look at monday's numbers. the dax fares 1% lower. the dow jones industrial fell by one 1.25%. across the atlantic on wall street, the dow has rebounded, and still not in positive territory, but looking much better. 0.5%. vero trading at the value of $1.25. the french government's has half -- has half its economic growth forecast -- halved its economic growth forecast. the revision means -- the announcement one day after president nicolas sarkozy announced plan to implement a controversial transactions tax. french debt was recently downgraded from aaa to aa +. italy held a successful bond auction on monday that brought a sigh of relief to rome. that just at over 6% of the lowest level since october. the option was seen as a key test of market conf

many people in the marketplace expect greece to default. what's wrong with a greece default? what's the worst-case scenario? >> we are prepared. but we are working to avoid a greek default. >> but you can't categorically say greece will not default? >> i cannot say greece will go for it. that would be a major disaster. and i think i'm convinced we are working for it. >> the next big deadline to watch, march 22nd. in fact, greece faces a major bond payout on that date. the eu commissioner would not rule out an agreement as late as late february. we are looking at bull actions for the long term, for the eurozone. but of course, the markets, investors, we want to see change in the short term. tell me how you see the greece recovery, or default playing out. >> i know more or less how the eurozone will look like in two years. but the next three days could be very important. especially in relation to greece. and we are now very close to see an agreement between the greek government and the private creditors. the talks are going on. and i expect that we see a deal, if not today, may

greece and outside of greece. it's a blackmail of the using against the greek people took two to have them accept. irrational and then work up a bully so you are saying the greek people are blackmailed it's interesting you bring that up because it struck me today i was very early listening to the world economic forum's press conference about davos which is next week and angela merkel is going to deliver the opening remarks so she's presumably i'm guessing going to talk about some of these solutions that european leaders have come up with for the crisis to a room of the heads of state of some of the wealthiest and most powerful business elites in the world in a place that is literally and metaphorically very far removed from the actual people that have been most impacted by the policies of european leaders who is it more important for angela merkel to convince that these solutions are solutions or working those people in davos or the people all over europe who have been so impacted by austerity. neither members of

bail out of greece. i asked correspondent mark lowen how much irritation is there in the greek community at the suggestion that germany should have tax control and spending power control? >> there was a swift reaction in athens by the finance minister all saying that greece must remain in control of its own budget. they fear a loss of financial sovereignty to brussels. they reacted badly indeed, and it is something that would go down badly on the streets of greece as well. this country is dividing banks to multieye euro-bail -- multi- euro-bail outs. those are very unpopular here in greece among the majority of greeks. so anymore seizing of control to the european union would be unpopular in greece. >> is there still a fear over the debt and the repayment deadline? >> there is. i think that was what was driving this german proposal, the widespread concern that greece is not meeting its fiscal target. the deficit is still too high. reforms are not being met quickly enough. the privatizat ion program neede

there could be a rau between greece and germany here after germans suggested that greece should tax in spending, some kind of eu budget commissioner. greece always seems to hog the headlines in these summits. this one may be no different. the crisis is not over. it's not just about greece, george, portugal is another country starting to cause serious concern in the back corridors, countries like greece has had one big international financial bailout. if current trends continue, it's hard to see how it won't avoid asking for another one as well. >> there's a bit of patching up to be done, isn't there? if you think of the last sunday in december, though britain exercising the veto, there's a bit of acrimony there? >> there was. and david cameron, the british prime minister came in to bat again in davos and he attacked them and said you're not doing enough. no one is in the mood to have a big rau. if you get in a room with nicolas sarkozy, sometimes tempers are raised. nothing can be taken for granted. >> thank you very much. thank you. >>> the meeting in brussels will focus on the financ

let's deal with greece. are we any closer to get some sort of agreement that is going to once and for all draw the line on greece's debt problems? >> it certainly seemed over the weekend that we got very close, indeed, to an agreement. it wouldn't be a great surprise if today or tomorrow we were able to say that a preliminary agreement has been reached between greece and its private sector creditors. but that's only one tick in the box, andrew. that's only one step forward. that would be something the markets would be looking for. it would be a disaster if they didn't agree, but then we have to see the details of that agreement, then the people who will be arriving here in brussels today, the leaders of the european union, all 27, would then be discussing this and then deciding whether to sign off on that agreement depending on the details. as we know, the european commissioners did not like some of the talk last week about the interest rate on the 30 year bond that the creditors would be getting from greece

now greece is another standstill with a mass strike underway just as the country's global paymasters pay another visit thousands of workers hit the streets to voice how destructive the cuts are even though more may be needed european central bank and i.m.f. delegates are there to try and beat a deadline for greece to get vital funds to slash its almost unserviceable debt well economist and professor younis borrow fokus now joins me live from. which is at the university of athens thanks for being with us first off if a deal is not soon struck greece will default will this latest meeting get those results and time greece afford to yield any more than it already has. well the goods will be full of not will depend ultimately on the official sector because again you can be met with it they're prepared to fork out the money which is necessary in order to meet its repayment of the late last the latest the bond issue which is maturing in march and it seems that is what everybody keeps saying is that germany particular is not going. to fork out. the billions which are necessary not to do that

s were triggered even though greece is already technically defaulted and i think the bigger issue is the banks because the banks are the ones who don't want to take right now so they've been kind of churning this paper all around us with the l.t. our own europe was about it was just about how do you get these banks to buy more of the crap that they already have in their balance sheet that they don't want to get rid of they want to get rid of but can't so they can keep their ass values i keep saying afloat zombie banks basically i would blame it more on the banks than on hedge funds and hedge funds are like little puranas banks with the giant elephant. wales in the in the logic at the blame game these days right everybody wants to point things i would anybody there's a plan but so you're saying that you know technically greece already defaulted we still haven't seen this massive chain reaction that a lot of people were expecting so what do you think i mean is are the chances of seeing this just orderly default the same now as they were a couple of months ago. so it's hard to like put

greece to hand over control of its fiscal budget as a condition for the next bailout package the further irony is that we've seen capitalism really be one of the topics one of the issues here at this davos questioning of capitalism in its current form is still serving the global and these western nations and i just heard david cameron in his remarks at davos asked about this and he said you know despite the problems i still believe that the capitalism in its current form and in western democracies is the best first serving freedom and democracy at the same time that we see not only technocrats managing it to push through very difficult budgetary reforms in italy in greece these are people that were not democratically elected now to go a step further we have germany wanting greece to hand over control over its budget entirely this sovereignty over its fiscal matters at the same time that the backdrop where we're hearing that this is the best situation for democracy i spoke to the chief economic correspondent for the british newspaper the had to believe greece has already succumbed to the

this is a step backwards then as more trouble in the euro zone hedge funds are threatening to take greece to the human rights court to force the country to make good on its bond payments so we've never seen anything like this try before arty's or me trick athena's producer on the capital account is going to give us all the details and we've told you about the government labeling animal rights activists as terrorists but calling journalists extremists for that kind of critical reporting that's right it's actually happening we're going to speak to will potter who runs the blog green is the new read about the chilling of free speech we'll have all of that and more feet and i couldn't he does have happy hour but first take a look what the mainstream media has decided to miss. it so today is january nineteenth two thousand and twelve not that really means anything in the mainstream media world to them it's just another day which means just more obsessive political horse race coverage than other seismic shift in the g.o.p. presidential race rick perry expected to drop out two breaking political

is also contracting so it's a tremendous problem in greece is going to be solved. and i think austerity measures along well that's the thing too right i mean let's say that they do and measures let's say if they do do what the i.m.f. and what angela merkel wants them to as you mentioned greece's debt is growing at astronomic rate so even if they supposedly follow the rules here and go along with this deal what is going to help greece at the end of the day the fall to just the ideal scenario i think for greece would be a default they maintain the euro for private sector purchases and the government wants to run up a huge amount of of if you want to spend a lot of money they should issue drachmas for the public sector and they can you get all the inflation but the private sector continued to use the euro for all the because there are a lot of contracts that are have been issued over time in european in europe in europe so be difficult to just break those up there's a reason that they have to exit the euro entirely they could have competing currencies that would be th

because you mentioned greece and you have that p.s.i.a. which is just basically it's the it's a it's a deal to to have greece restructure it's that with private creditors involved really quick because we have to go what do you think is going to come out of these negotiations are we going to eventually get that greek default sooner rather than later well let's recognize that greece is already all i mean here we've written these bonds down already fifty percent the next card is going to take seventy six percent the s. and p. or movies or french one of the three came out and said you know this is a default it's just a default it's triggered credit default swaps it's looks increasingly likely that we're going to have a credit but you know that drove this thing out now so long at great expense but the banks are probably prepared for this now you see these not prepared for this now it is easy beason a situation where the e.c.b. is going to have to take some losses on it but remember shakes me when i started to say that you don't know what i got

leaders are gathering for their first summit of twenty twelve with a sense of deja vu greece is still the center of discussion the pressure is still on athens to overhaul its economy with the german finance minister warning it won't receive a second financial lifeline if it doesn't correspond to reports now from brussels. they're supposed to talk more about the fiscal compact they had agreed upon at the last summit as well as push for the european stability mechanism which is the permanent bailout fund we will put in place now in june instead of july these are the official informal topics but greece is still hanging over their heads especially since there have been war of words between greece and germany with the germans are calling for moving taxing and spending power over to brussels and the german finance minister saying that the europeans are willing to support greece as long as greece actually implements the this issue instead of just talking about it all the greeks had responded to that but with a lot of still to be saying that this is definitely out of the question especially s

it's greece. >> greece is certainly the word these days. in the meantime, while investors haven't gotten the deal they wanted, angela merkel got the deal she wanted in brussels on monday. 25 out of the 27 countries have now backed her plan to fiscal rules aimed at protecting the eurozone. any protection for greece is far from assured. jim bold en reports. >> after six hours of talks in brussels on monday, european union leaders agreed on some things in order to help stabilize the euro zone and try to calm the stock market. the first thing is they've agreed to start the stabilization mechanism starting in july. a year earlier than planned. this is a permanent bailout fund that will be available for any country that may need a bailout in the future, including greece. the idea is that if you put enough money in a permanent fund, maybe the market will think that europe is very serious about the euro and won't go after these economy's bond market. however, they weren't all able to agree on the stability pact. 25 of the 27 e.u. countries have agr

structural reforms of the economy i think with respect to what greece needs it's still very much the same issues that are on the table the only problem is greek greece hasn't left any time to bring these structural reforms about and so something needed in the short run and i think also here in europe at the brussels airport is of the european commission people start to realize that really is no other way to solve the greek problem by but then by an exit from the euro zone right there have been overread has bonds on the euro and where it's going in twenty twelve thanks for being with us on the line from brussels. well it's seen as one of the biggest blight on modern british society but tackling gang violence is proving difficult but the government seeing a firm response is the only means of dealing with it there's a growing criticism though that attempts to improve the situation aren't addressing the roots of the problem are just more smith explains. it is. six years old. and often also teaches. the dark underbelly of life in britain is in a city's gang culture dramatized here for a t

see greece leave the eurozone? >> no. i don't think we'll see anybody leave the eurozone in 2012. we'll have more problems in 2 2012, but there are 40 elections around the world in 2012, christine. governments everywhere are going to be doing their best to make sure we get through the election. maybe 2013 you should be panicked, certainly by 2014. 2012 i think we'll be okay. not panicked but okay. >> does 2012 mean there could be a slight change in strategy on your part? >> still short european stocks and i'm still long the euro. i'm wondering why i'm short european stocks, since they've been going up in january. no, i'm still short european stoc stocks. >> what news would you like to hear to start buying european stocks again? >> i would love to say, okay, it's a disaster. everybody is going to take big losses, banks, bondholders, shareholders of the banks, all take big losses, we're going to start over. everything would collapse. i would buy all the euros i could and all the stocks i could. i don't think it will

money actually wants to control the fiscal matters and the budget of greece so you know greece going to have to give up its sovereignty if that goes through and this is because of debt written by the banks and taken on by the kleptocrats do they have to lose their country as a result. that's the theory obviously the plan is to do the greece what america and europe used to do into latin america in third world countries in the nineteenth century when a country couldn't pay the creditors would send in the gunboat and they would literally occupy the trust them office or they could collect tariffs revenues and repay the bondholders so what you have to get a is a decision that. finance capital and extracting money to pay the bankers is incompatible with democracy a few months ago when the elected prime minister of greece five grails was about to sign an agreement with europe to say ok we're going to sell off the speed billion euros worth of reply and this water and sewer systems of athens and others that is on the market by rest maybe even the parthenon if you will islands. the prime minis

we have more -- waiting for greece to strike a debt deal. we have more from frankfurt. >> there were some shares that managed to gain a little bit. most were down for the day. there is uncertainty about whether the agreement will go through. most people say there is no option, really. nonetheless, there was uncertainty over how long this was taking. that was our reason -- a reason for profits after considerable rises this year. soybean managed to garner fresh capital -- spain managed to garner fresh capital at lower interest rates. >> let's get a closer look at those market numbers for you. to determine the benchmark -- the dax closed lower at 6419. in new york, trading still under way. the dow jones industrial is also in negative territory. the euro declining slightly against the dollar, trading for $1.30. a german energy giant will/jobs worldwide, 6000 of them in germany -- will slash jobs worldwide, 6000 of them in germany. eon signed a pact with its unions to save 5.5 billion euros by 2014. a large amount is needed to build wind turbines

so the pressure remains on greece tonight. >> as those talks continue. simon, thank you so very much for now. let's go over to steve. a very different story for france, which has hurt some reassurances today. >> a big market rally, a huge relief rally. european shares soared tuesday after fitch ratings said it does not plan to downgrade france this year and that it remains confident the 17-nation eurozone will not break up in the coming months. you're out's bailout fund reliance on the top credit ratings of france and germany to borrow at affordable rates. the downgrade for friends would torpedo the region's efforts to stem the current debt crisis. however, it was not all good news. several other european countries, including italy, were warned that their credit ratings could be downgraded by the end of this month unless they continue to pursue reforms. and to restore economic growth. spain, belgium, ireland, and slovenia, as well as cyprus, all remain on a negative watch. european markets did rally tuesday as investors were given some cause for cautious

in fact of using this second bailout as a pretext to force greece to leave the euro zone in a voluntary manner at least have it look that way if that were to save the euro why not them. well i think that's again one of the explanations that can be given but i think there was pretty much very broad conviction here in brussels among your files and european top politicians that could give the eurozone together just by giving extending credit and money to greece on the one hand and on the other and obliging greece to follow a strict program in terms of expenditure tax increases and of course most of all structural reforms of the economy i think with respect to what greece needs it's still very much the same issues that are on the table the only problem is greek greece hasn't left any time to bring these structural reforms about and so something needed in the short run and i think also here in europe at brussels that quarters of the european commission people start to realize that really is no other way to solve the greek problem than by an exit from the euro zone right over about his father

for unless either the commission was wrong or the handling of greece has been wrong since it ended which which is it ends in the it's pointless to talk about how things were in the past we're talking about the future you can go i hope we manage to keep greece in the eurozone for that to happen you know i hope the package of aid agreements that european leaders have agreed on is implemented if that's the case that i think we can start taking care of so they have allies in the market because it was a great deal of help from greece of course there is one point i would like to make the country should not be broken down not only does greece need a budget discipline which is of course true but what greece needs most on our investments are creaking and it will be good to see wealthy greek citizens who are currently investing abroad pay taxes in their own country instead of looking for investment opportunities is there a red line beyond which german thursday we're not going to bail out southern europe anymore or does germany have a historic debt to europe has from. been digging about debt i'm no

need a budget discipline which is of course true but what greece needs most on our investments of a would be good to see wealthy greek citizens who are currently investing abroad pay taxes in their own country instead of looking for investment opportunities is there a red line beyond which german thursday we're not going to bail out southern europe anymore or does germany have a historic debt to europe has from. been digging about debt i'm not against discussing a red line the problem is that if you start to talk about a red line then you'd eventually have to correct it in germany's interested both politically and economically in a functioning europe that have economic interest is easily explained what it is forty percent of our export goes to the european union and beyond that if those countries are hit by a crisis then so is germany your secondly or the lesson we learned in the past and our prospects for the future dictate that germany is not strong enough geo politically to play a significant role in a game where the u.s. is one superpower and an asian leader. in this. china is t

yes and you know on the one hand nothing that happens in greece makes any difference because the over the important decisions are reached in brussels and frankfurt and banishing bubbling. on the other hand to the extent that good politicians are to cory these days to walk in the in the street to attend meetings to give speeches to give talks well this kind of data that has been inspired in the minds of politicians is not insignificant they have received their comeuppance so to speak and there it hopefully there you know they think much more carefully these things about the decisions that they make. the i have said on wednesday that it needs to raise up to five hundred billion to buffer the world against any further european slump do you see this as support for greece or perhaps it as other nations may be protecting themselves because they think greece might go under. the i.m.f. move to shore up its own finances in order to extend good clients to the european union it's going to stick in countries concerned not you can sense it or primarily to. the europeans have failed to put their ho

you were chancellor when greece cooked its books to join the euro should you have stopped athens from joining the single currency club nick. i do not think that was our situation of the european commission its employees that had to conduct inspections they had let us know that we could take the responsibility for greece's e.u. a session on ourselves but it was a purely preparatory mission conducted by the european commission not the national government we had made the decision to take greece in we could not claim without having firm proof that the information we got then was diplomatically speaking not entirely correct very much keep in mind that the european parliament voted in favor of greece's membership almost unanimously including the conservatives who are now trying to distance themselves from that decision sometimes in politics you don't want to believe things that he wants condoned or actually happening. under either the commission was wrong or the handling of greece has been wrong since it ended which which is it ends in the it's pointless to talk about how things were in the

well it's certainly possible it's not going to be good for greece if they do it if they did that who's going to lend money to greece any time for decades i mean if they go ahead and withdraw from the from the euro then they go back to the drug may everybody knows they're going to print drug was day after day after day just is that good before you're going to have recurring periods of bankruptcy and crisis and you and greece sure they can do that they were a basket case before they will be a basket case again if they do it it would not be the best thing for greece but it does not mean they won't do it politicians do police things all the time with that said germany and france have repeatedly pledged their commitment to the euro with chancellor merkel saying she wants all states within the single currency to stay how far do you think the powerhouses are prepared to go to prevent a greek default what greece it has to is going to default that's no way there's no question that greece cannot pay its debts they can do it in an organized manner where they can say ok we're going to put this tog

and you know the creditors are now in greece trying to renegotiate this deal greece's debt talks with creditors stall amid coupon dispute so that was last week when the creditors had walked away from the talks after failing to agree with the greek government about how much money investors will lose by swapping their bonds and increasing the risk of the euro area's first sovereign default so apparently it's the hedge funds in particular who want to make as much profit as possible and the only way therefore they're demanding one hundred percent repayment on these bonds or outright default they don't want to voluntary arrangement because they want to be paid off on their credit default swaps people should understand that leading up to the crisis was the result of financial masochism these are financial firms like goldman sachs masochistically destroying countries like greece of ireland portugal and others now that we've had the result of the crisis and they're trying to eke out austerity measures this is sadism so sadomasochism economics is the preferred metal model of the wall street ba

greece the critical part of the euro zone issue. greece has a bond payment dumar much 22nd. we see that turn into a default, could be a market dislocation given the fact that invest letters start to worry about the cred of the other euro zone bonds. here is what the german finance minister told me about greece, they are hoping that there's no default, but can't categorically say no default. >> we are prepared but we are wanting to avoid a greece default and optimistic we can afford. >> you can't categorically say greece will not default? >> i can't say that that would be a major disaster and i think -- i'm convinced we can avoid greece default and we are working for this. >> but not all negative there are positives you took away, right? >> there is. march 22nd, die watch on greece, positives, spoke to the ceos of rio at this point toe, barrett gold, due pop the, ellen coleman, mining continues to be hot there is demand coming from around the world, technology also very strong that has been the winner in 2012, still see money probably moving into technology and mining compani

of course, it is this is written in greece that it will be talking about. that country is stumbling efforts to get its finances in order. >> stumbling could be putting it mildly. are germany and the imf still fully behind greece? >> certainly, they are. chancellor merkel has repeated that, of course, she does not want greece to lead the eurozone. she wants to see that country, you know, moving forward and strengthening its economy. but she has reiterated that greece must do more to implement the reforms, the fiscal reforms, that it has agreed to before support money can be paid across. there is 130 billion euros up european support money that has been waiting to go to greece since december. she said the catalytic a when there are real signs that greece is implementing the necessary reforms. one other thing that the private investors, people who have lent money to greece, they want to know the details of the restructuring of the debt, the 50% write-down they have been asked to agree to. until they know what the terms are, they are unlikely to agree. so the p

one expert said with greece, from the table, one prominent case less. the commerzbank was the favorite of the day, shooting up in value. there was speculation that the requirements for capital for the banks would be partially and temporarily relaxed, and also, still a factor, the commerzbank's announcement last week on how plan to fulfil capital requirements without going to the state. >> let's take a closer look at the market numbers. in frankfurt, germany's blue- chip dax was higher on the day by 0.5%. euro stoxx 50 also higher. over in your, trading still underway for the dow jones industrial average, and it is little changed. it had been rallying earlier in the day. the euro gaining against the dollar, $1.3017. the spanish economy made it back into recession this year. the bank of spain estimates of gdp will contract by 1.5%, putting more pressure on the country's already high unemployment. that jobless rate could soar to nearly 24%, according to estimates. spain may have to wait until 2013 before the economy is growing again. by what is expected to