tv World Business Today CNN October 7, 2011 1:00am-2:00am PDT
hello. i'm monita roj pal at cnn london. the nobel peace prize is expected to be announced shortly, carried live in oz low in just over an hour from now only here on cnn. we'll bring that to you as we get it. a pakistani doctor is accuse of o treason for allegedly helping the u.s. kill osama bin laden. he helped the cia gather dna from the ab abbottabad compound. dramatic testimony in the trial of michael jackson's personal physician, trying to suggest the coroner's investigator made mistakes when
she searched his bed roof after mistake. she said she found a saline bag in the room with a propofol bottle inside. prince harry or captain harry wales as he's known in the british military is bound for the united states. he'll soon begin helicopter gun ship training at bases in california and arizona. those are the headlines from cnn the world's news leader. i'm monita rajpal, "world business today" starts right now. good morning from cnn london. i'm nina dos santos. >> and good afternoon from cnn hong kong, i'm andrew stephens. welcome to "world business today." the top stories this friday, october 7th. european stock markets face further turmoil as moody's down grades the credit rating of 12 british banks. >> and could eu measures to change carbon taxes spark a new
trade war? >> a luxury brand is forced to slum it as commercial rents skyrocket here in hong kong. first though to the stock markets, european banking stocks have been falling in the last hour or so that the markets have been trading. this comes after moody's decided to downgrade 12 british banks. the giant lenders like rbs, lloyds tsb are among some of the companies downgraded just a short time ago. moody's cut iterate tinges on rbs by two notches, and lloyds by one notch. the cooperative bank nationwide also saw their ratings lowered as well as seven smaller institutions across the country. this comes just less than 24 hours after the european commission president joe sell morrell barroso. let's take a look at how the major european stock markets are
fairing. yesterday's positive sentiment didn't last long. we've seen the stock markets have fought their way back into positive territory. some of the banks perhaps mitigating the effects of some of the resource sector stocks rising on these indices as well. muted gains at the likes of the footsie 100. similar situation across the your pi european continue meant as well. we have it live from the trading floor. first up, talk about these 12 down grades here. this move is a surprise. it also comes after yesterday's announcement of quantitative easing that was another surprise as well. how are the markets digesting these two moves? >> if you look at the stock
price reaction it indicates moody's may have been painting a little catchup in terms of what the market was telling me. you're looking at lloyds down a couple percent, bark clay's down 1.4%. so not really big moves in the stock market. so indicating that really i think a lot of this had been expected. george osborne, the chancellor here in the uk was quoted in an interview only about half an hour ago saying it's all due to the vickers report where the plans are to split investment banking away from more traditional forms of banking. if you're going to allow an investment banking arm to go bust, that does withdraw a little support from these government banks. i think it is interesting what they're doing, but i don't think this is the bigger picture, to be honest. the bigger picture is european banks need an awful lot more capital in order for them to cope with the huge losses on greek debt, possibly portuguese debt and possibly irish debt. >> we're not really hearing what
we need to hear, are we, from the eurozone ministers and other leaders across the eurozone heeding the warnings from bar rosso. we're not hearing anything, are we? >> no, the imf has been telling us we need hundreds of billions of euros put into european banks. we've been hearing that for not quite six months, but quite some time. it's good that merkel and sarkozy are getting around to talking about it. the amount of money that needs to be put in, they should have started discussing it a long time ago. it's going to be quite difficult to sell to the electorates and quite difficult to come up with. yes, good news we're talking about it. we're a very good long way away from having money put into banks. a good thing, but don't get carried away as yet. >> louise, one thing people are
concerned about, we're in a situation where entire governments are in trouble because they bailed out their banks back in 2008. can we afford to bail out more banks now and for governments to take more debt onto their balance sheets? probably not. >> the governments aren't in trouble because they bailed out the banking street. that's not the reason governments are in trouble. governments are in trouble because they enjoyed the credit boom and issued far too much debt. if you look at greece, it's got 300 billion euro of too much debt. they haven't spent anything like that on their banking sis industry. in the uk, we spent, what, 70 billion in the banking industry? truly the eurozone situation isn't due to bailing out the banks, it's due to spending too much in the good times and not putting money away for the bad. all european governments, in fact america as well, did that and believe the credit boom was
actually a new paradigm. clearly it wasn't. it was a massive credit bubble that many people didn't anticipate. >> in a yes or no answer, can we afford to bail out the banks? >> i don't think we have a lot of choice. >> louise cooper from bcg partners. many thanks for that. nina, you find a dollar for every time i heard new paradigm, i would be a wealthy man in all the years i've covered the markets. what louise is saying there, that line about not getting carried away with rescuing the banks, i think that's key. and even so there's still a rally here in asia going on into its second day. this is a relief rally. you're seeing equities back in favor as people move back into what they perceive as ris ngier assets. that was how asia ended up this day. you can see the big markets there with the exception of shanghai which is still closed, all making strong gains today, second day of gains.
hong kong up by 6% yesterday, up by another 3% today. the key does remain whether this euro news can carry through, whether we do have the beginnings of a substantial plan to bail out europe, get greece back on its feet, there's relief going only at the moment. how long lived this is, wait to see. the nikkei up, the bank of japan, up. their regular meeting said everything will stay exactly the same. one stock that's been moving today is samsung electronics, the company releasing its sales forecast for this third quarter of 2011 on friday. it says revenues should drop, but a 12% rise in profits from the previous quarter is coming thanks to solid sales of mobile phone hand sets. samsung's stock closed ability half a one percent higher. nina? >> andrew, we saw another show of confidence on wall street for
thursday's session. u.s. stock markets rose for a third day in a row, largely than tox the european central bank's unexpected move to boost liquidity into the continue meant's banks. the major markets closed about 2% higher. financial stocks leading the gains thanks to better-than-expected figures particularly when it konls to u.s. jobless claims, another reason to buy yesterday in the u.s. >> of course, it is the big jobless number, the monthly jobless number out in the u.s. later this day which is going to be very closely watched. that's what the u.s. futures look like at the moment. virtually unchanged. not surprising, jobs always such a big number at the moment, the latest expected number is job creation of around about 55,000 for the month of september. you'll remember last week there was a shock when the job creation number came in absolutely flat, sooerp row. unemployment meanwhile likely to stay at just above 9% in september.
so nina, still a long way to go by the looks of it in getting the jobs situation back under control in the u.s. >> absolutely. the unemployment rate remains about 9.1%. still it is higher here in the eurozo eurozone. you're watching "world business today." travel tax. why many people will be forced to pay for their carbon footprint. it could come at a heftdity price. the full details next on cnn. with b vitamins, the first and only one to help support a healthy metabolism. three smart new ways to sweeten. same great taste. new splenda® essentials™. people have all kinds of retirement questions. no problem. td ameritrade has all kinds of answers. call us for quick help opening your new ira. or an in-depth talk with a retirement expert. like me. stop by my branch for a free retirement check-up. retirement hows and how-muches? whens... and what-ifs? bring 'em on. it's free. you're gonna retire.
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economies, that could curtail the demand for oil. it's trading down about 13 cents on the barrel at $82.46 for the nymex crude. welcome back from cnn london in hong kong. this is "world business today." airlines say they eel continue to fight new legislation that will force them to pay a carbon tax on flights to and from the european union. china says this policy will cost its aviation industry $125 million a year. the policy has created a big dilemma for a business that says it is committed to fighting climate change. aviation is one of the most competitive industries in business, but in hong kong, a show of solidarity against a common enemy, a new european law that comes into force next year. >> i think the global airline industry is united against the eu ets. it's the wrong approach.
>> from the beginning of next year and europe's new emissions trading scheme, any airline that lands or takes off in europe will be charged for its carbon emissions. those emissions will be calculated not just over european aerospace, but from wherever the plane starts or ends its germany. if you're starting in hong kong or london, you'll pay for you're missions all the way, not just in european aerospace. lit be exactly the same for the return flight. that the airlines say is unlawful. they say the eu is intruding on other country's sovereignty. it's not the cost which will add only a cost of $20 on a return ticket. the problem says the group that represents more than 90% of the world's airlines, is it's not a global solution. we don't have a problem with emission trading schemes, but by
doing it this way as a regional thing which has territorial application, the europeans are actually driving a wedge between countries who should be working together to put a global scheme in place. that's what we're advocating. >> europe apparently has little appetite for change. >> i think there are lots of misunderstandings out there how the new ets functions, probably also because this is a new thing to many of the airline operators, and we are ready to explain and clarify these misunderstand dings. >> this dispute looks anything but a simple misunderstanding. what of the persistent phrases at the greener skies gathering in hong kong recently was trade wars. >> if the eu persists in going forward with the trading obligation that begins on 1 january, other countries will retaliate. it's just a matter of time. >> the u.s. congress is now considering a bill that would
ban u.s. carriers from complying with the eu legislation. china says it will take action against europe, although it's not clear yet what form that will take. but any sort of new trade dispute can only damage the airline industry and only be another head wind for a global economy already struggling to find common ground on how to kick start growth. air gravel is also one of the fastest growing sources of greenhouse gases. this year about 650 million tons of the gas carbon dioxide will be spewed out into the atmosphere, that's about 2% of all man-made carbon emissions. but the industry says it will cut emissions by more than half to 320 million tons a year by 2050. nina? andrew, when it comes to shopping, we all know high-end brands mean high-end prices, usually high-end surroundings as
well. one luxury hong kong brand is turning that idea on its head in relocating instead to a set of tents. improve the health of your skin with aveeno daily moisturizing lotion. the natural oatmeal formula improves skin's health in one day, with significant improvement in 2 weeks. i found a moisturizer for life. [ female announcer ] only from aveeno.
dollar today. we also have news of potentially more liquidity pumped into the european banking system. interest rates on whole across the eurozone and great britain, the euro trading at 134.45 japanese yen at 76.63. you're watching "world business today" today live on cnn. he's a president with big plans for employment, but having declared a state of emergency in the u.s. economy, barack obama needs backers. in august a grand total of zero new jobs were created. september figures released in a few hours from now and forecasts are now not spectacular as dan lothian reports, desperate times may call for desperate measure. >> reporter: it wasn't a full-throated endorsement on the tax on millionaires to pay for his jobs bill, but it was as close as president obama got. the president used a big part of
his roughly one-hour press conference to lean on congress to pass the jobs bill, single out republicans for often saying no to his proposals. >> the question is will congress do something? if congress does something, then i can't run against a do-nothing congress. if congress does nothing, then it's not matter of me running against them, i think the american people will run them out of town. >> reporter: with an economy going in reverse after showing signs of moving forward, the president named europe, a tsunami, high gas prices and the debt ceiling fight for the dark outlook. >> there's no doubt that the economy is weaker now. >> reporter: he says ideas the republican are backing won't produce the immediate jolt. >> go ask the republicans what their jobs plan is, if they're opposed to the american jobs act and have it scored, have it assessed by the same independent
economists that have assessed our jobs plan. >> reporter: later while honoring the ncaa women's basketball championships in the rose garden, he joked that the practice of throwing candy to fans might sweet ten the deal. >> i'm going to try that. >> reporter: the president says all this boils down to simple math. if action isn't taken now, there could be some serious consequences, that the nation could end up with more significant problems than we're currently experiencing. dan lothian, cnn, the white house. another couple stories we're following here in europe starting with this one. the bank of england's governor, mervyn king who you can see on the right says the uk could be facing its worst ever economic clis sis, even eclipsing the great depression of the 1930s. hits warning came yesterday as that bank decided to pump
billions into the economy the in a second round of quaunt theyity easing. take a look at this, look no further than the cost of the country's most expensive street. granted this particular property is up for sale at a cool $15 million euros, about $20 million. six years ago this six-bedroom edwardian house sold for a total of $78 million. i guess perhaps andrew that makes it a bit of a bargain now. i must say we still have some 60 million pound, pairly $80 million houses here in the united kingdom as well, especially in london. they seem to be flying off the shelves like hotcakes. then again, the economic outlook is sourg. >> as you were saying, russian mon any going into london, not so much into ireland. interesting that a lot of people will end up making a lot of money out of this downturn and
buying those places like that and will eventually rebound. that's the low price. let's look at the other side of the coin here. here in hong kong there has been stories that the property market, at least the residential property market is slowing down a bit, but certainly it's not the same story in the commercial market. the south china morning post, the newspaper here, is reporting the luxury clothing brand with a particular link to hong kong is being forced out of its prime location in the heart of the city to a set of tents on the nearby ferry pier. they're moving from central hong kong to a bunch of tents. i'm talking about shanghai tang. rent reportedly doubled to nearly $1 million u.s. dollars a month. no price for royalty.
they had been at this place for 17 years. the landlord decided they're going to open its space to the top bidder and abercrombie and fitch swooped in and put in a bid double what shanghai tang had been spending, and that's what happens in a nice economy like hong kong. the company actual started in hong kong by david tang, a local brand, even though it's owned by richmond. money does make the world go around. >> they do have a store here in one of the most expensive streets in london. then again, you've got to wonder whether london perhaps isn't raising its rents as much because we're all concerned about the economic outlook. i can say on my way back from the office towards my house, i passed one of the most expensive
streets in london every day. there are starting to become vacancies on that street as well. different on this side of the planet, andrew. >> even though we have been talking about a slowdown in china, hong kong is still going gang busters, all to do with the luxury retailers in here, desperate to get some of that chinese money going through their tills. while that's going on, expect to see the rents atry dick loupsly high levels. it started on wall street. now the protests are spreading across the united states. >> we got soldout. >> the banks got bailed out! >> the occupy wall street movement is gaining momentum. after the break we'll tell you why iran is weighing in on the debate. stay with us.
from cnn london, i'm nina dos santos. >> i'm andrew stevens. welcome back. you're watching "world business today." >> let's take another look at how the european markets are fairing. they fell in early trade largely on the back of moody's decision to downgrade 12 british banks. we've also got the "financial times" reporting that we could be seeing future bailouts for the likes of rbs and others on the front page. that hasn't helped the markets. they have managed to recover a little bit. the picture is virtually flat for the ftse 100, that index up by .1%. a lot of focus on the banks today because we did have news overnight that we may see a
recapitalization for some of these banks. that's what joe say manuel barroso in berlin was calling for. banks very much center stage here again. a second day of rallies here for the asian markets, nina. pretty strong numbers, too. remember we had a big day yesterday. so the fears being allayed in europe was the theme today. hong coming up another 3% after yesterday's 5.7% rise. australia up also by more than 2% as was seoul. pretty strong gains to end the week in hong kong. over the week the hang seng is still down by about 2% and the nikkea is down by about 1%. nina? >> it was an upbeat day on wall street thursday, stocks closing higher for a third straight day despite a rise in initial jobless claims. shares of apple didn't fall too far despite the death of the company's co-founder steve jobs.
alison kosik has all the details. >> stocks closed sharply higher for a third straight session on thursday. investors looked past the small progress in europe and focused on u.s. unemployment claims. at the close the dow soared 183 points to end at 11,123. the nasdaq and s&p 500 jumped almost 2%. apple shares lost a quarter of 1% on the day following the news of steve jobs's death. investors have known for a while his health was deteriorating. the market already priced in the possibility of apple wout its iconic leader. a sign of confidence that the company will be just fine. even with jobs' health problems, apple shares have continued to climb. when the ipad was released in 2001, apple shares were valued at just $9 apiece, now worth
almost $380. weekly jobless claims rose to almost 400,000. the rise came after two weeks of declines, helping to add fuel to the broader rally. the bigger employment reading is due out friday when the government releases its closely watched jobs report. employers are expected to rise 65,000 in september after creating none the month before. that's a wrap of the day on wall street. i'm alison kosik in new york. >> friday marks the 21st day of what's been called occupy wall street. demonstrations by ordinary americans against what they see as corporate greed, income inequality and the long list of social ills. >> the movement started in new york's financial district where police have scuffled with protesters accused of blocking streets and walkways. by thursday the demonstrations spread to more than a dozen u.s.
cities. this gathering took place in austin t state capital of texas. >> we got sold out. >> the banks got bailed out! >> and this protest was in sacramento, california. the occupy wall street protests are to continue on friday as the movement continues to spread to other cities. >> those protest scenes on tv not just in the united states and also on cnn, they're also being broadcast in iran. as you might expect, they're accompanied by criticism of the west. jonathan mann examines the coverage there. >> reporter: occupy wall street. opportunity for iran. iranian news outlets are using the current protests to level harsh criticism at the u.s. state-run press tv reports mainstream tv in america are
ignoring the protests and police in new york are beating wall street protesters. >> more and more states seeing fed-up institutions and corporate greed. is the united states of america as united as its name suggests? >> reporter: press tv says many of the protesters with the occupy wall street movement say they were inspired by the tie rear square protests in cairo. some say the current protests in the u.s. could go the way of the political uprisings in egypt, tunisia and libya. >> it's a revolutionary period, no question about it. whether the movement is revolutionary remains to be seen but we are in a revolutionary period. >> reporter: back in august, iran's state-run media chastised british officials for their handling of riots in london. there's been perhaps understandably no mention in iran's wall street coverage of the country's own post election violence in 2009 when dozens, if
not hundreds of anti-government protesters were killed in clashes with police. jonathan mann, cnn. starting today, thailand is giving its farmers a boost, and in doing so, potentially giving the global price of rice a boost as well. the government will buy rice up to 50% above market rates to stimulate economic growth. it's believed it may push up the price of rice on the world market by as much as 20%, cutting the export market share. the country currently supplies about one-third of the world's exported rice. according to an hbsc report, the aggregate monetary food index fell by more than 2% between march and august. in contrast, though, take a look at rice. it was up by almost 7.5% during that same period. that's in part down to the thai
government's intervention, but also due to widespread flooding in rice-growing regions. meanwhile, the index for edible oil sank as much as .5%, and wheat down by more than 4%. heavy rain is causing severe problems in thailand. that's taking a toll on the economy. let's check your business traveler's forecast now. to do that we go over to meteorologist jennifer delegate toe at the cnn weather center. >> good morning. we're talking roughly about $807 million in damage across parts of thailand, this is after widespread flooding. let's go to the video. many areas under water. southeast asia has been so active over the last several weeks. it's that southeast monsoon. really this is a direct effect of la nina it looks like for thailand, the ancient capital under water. people are sandbagging, trying
to save this area. the problem is with the canal systems, many areas are just so backed up, there's really nowhere for the water to go. that's one image coming out of thailand. let's go to the other video out of thailand. this is once again showing through parts of bangkok. this is, of course, the area that does not need it with so many people living across this region. as i take you back over to our graphic here, for bangkok, look at the precipitation. we're talking nearly 60% above average for this time of year. for elsewhere we're talking 45 in some of the regions down towards the southern part of thailand, right near the gulf of thailand. as we go through the next several day we're expecting more rain fall. in the last 24 hours, 96 millimeters of precipitation right in that region just to the west and the south of bangkok. as i said to you, more of that rain is going to continue to pop up. it's also going to affect cambodia as well, the country
under water for many parts. let's also go to video coming out of china. and for hinon, we have the typhoon that passed through the region. the problem is people are being evacuated. they're evacuating residents as well as the animals there because this is a low-lying region. millions, if not billions in damage coming out of china. nina, right now it looks like there's not any immediate relief any time soon. many people suffering. >> indeed they are. jennifer delgaddelgado, thanks much for up the date. >> for more check out our website as cnn.com/biz 360. the jobs report will be out
later today just before our second edition of "world business today." we will be giving you everything you need to know about the state of the u.s. economy as it relates to those jobs numbers. make sure your join us then. >> we'll be keeping our eye firmly fixed on that as, of course, the unemployment rate as we've been saying remains in the high single digits in the u.s. and also double digits in some parts of the eurozone. if you're looking for a job that's out of this world, then we may have something for you. houston is hiring. that is to say, nasa has announced a recruitment drive for new astronauts. the successful candidates will become part of the country's post shuttle intake in 2013. applicants should have a bachelor's degree in engineering, science or mathematics and three years of relevant professional experience, an apartment tude for moonwalking might also be desirable. applications open in november. no television presenters need apply, i suppose, andrew. >> i guess you have to to be an
american passport holder, too. that rules out my son. that will be a blow to him. that's this edition of "world business today." thanks for joining us. i'm andrew stevens in hong kong. >> i'm nina dos santos in london. good-bye for now. [ male announcer ] for sore muscles use new bengay cold therapy, it's pro-cool technology releases armies of snowmen masseuse who cuddle up with your soreness and give out polar bear hugs. technology. [ male announcer ] new bengay cold therapy. the same technology used by physical therapists. go to bengay.com for a $3 coupon. there's no time like the present to consider all your health insurance options. does medicare alone meet your needs? would additional coverage be better for you? well, now is a good time to take a look
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this week on "marketplace middle east," turkey takes a tougher stance on syria. we take a look at the disintegrating ties between the two countries. syria's ripple effect. lebanon central bank governor, riad salami talks about whether the crisis in syria could impact business in his country. the as sat's bloody crackdown was at the center of talks this week. russia and china vetoed a kurt council resolution that would call for an end to a serious clamp down on dissent. the u.s. immediately declared
its outrage which, along with europe, has already slapped damascus with sanctions. now turkey seems to be following suit taking a stronger stand on the assad regime as ivan watson found out. >> reporter: the turkish military announced it was starting a week of military exercises in a province bordering syria, a move many are interpreting as a direct warnings against damascus, the turkish government is very unhappy with the on going crackdown against anti-government protesters that claimed the lives of more than 2,700 people over the course of the last six months. the turkish prime minister endorsed a failed united nations security council resolution against the syrian government which would have condemned on going operations against unarmed civilian protesters. he says despite the failure of that resolution, it being vetoed by china and russia, he would
still impose sanctions on syria. he warned that the bonds of friendship between himself and syrian president xwash shar al assad, it's remarkable how quickly this relationship has collapsed, considering that barely seven, eight months ago, the two governments were holding joint cabinet meetings, removed visa restriction ps from each other's citizens and signed a free trade agreement and even held joint border patrols together. it's unclear what this rapidly deteriorating political relationship, what impacts it would have on what had been flourishing bilateral trade which reached more than $2.5 billion in 2010, a three hold increase over the course of four years. ivan watson, cnn, istanbul. >> trade between turkey and syria took another hit two weeks ago when damascus imposed a ban on imports that have a customs tax of more than 5%.
mobile phones and vehicles like buses an vance, for instance, that ban has now been lifted after pressure from syrian importers, major trading families of the two capitals regarding financial trade. one country that's watching developments is lebanon. in 2010 syria was lebanon's second largest trading partner accounting for over 11% of the country's total global trade. as the unrest continues in syria, lebanese businesses are preparing for the economic ripple effect. arwa damon has more from beirut. >> reporter: absorbing shocks, an imperative for any business to succeed, es speshl li in lebanon. the ability to do just that has allowed indevco with companying worldwide to endure. the ceo and president and also the head of the association of leb mean industrialists. >> the whole area is unstable
and the lebanese are thinking of what can happen in lebanon. >> reporter: especially when it comes to the unrest in syria, a country closely linked to its tiny neighbor. >> through syria, lebanon exports around 25% of its total value of exports. it sells to syria 5% of its exports. we are preparing ourself to be able to sell through by passing syria. >> that advanced preparedness is the lebanese way, a characteristic born of the nation's own experience with wars and conflict. this company, for example, has been around for more than half a century and it managed to weather lebanon's civil war and
its often turbulent and violent past. it has done so through its ability to adapt, to function and cope with anything from not having sufficient power to not having a proper government in place. it is quite simply darwin's theory of evolution that applies to business in lebanon where only the fittest survive. that said, there are no illusionless. the future remains uncertain. in 2010, according to the imf, lebanon's economic growth was at 7.5%. compare that to the imf's april 2011 projection of 2.5% based at the time on the country's own internal political instability. but as the arab spring hit syria, lebanon's growth prospects took another blow. the projection now, a mere 1.5%. smaller businesses are the ones really feeling the impact. on one of beirut's main shopping
streets, all the store own erls we spoke to said their incomes had plummeted. >> the tourists who used to come by land through syria, those who used to summer her in lebanon stopped coming this man tells us, plus local consumption is down. the lebanese are expert at the art of survival skills that he argues continues to make his country a worthwhile investment. perhaps now more so than ever. he sees lebanon involving into the gateway to the region. >> i see headquarters of multi-nationals being headquartered in lebanon despite the fact that some would think lebanon is a dangerous place. i think we're seeing today more dangerous places in the area, aren't we? >> reporter: for those interested in the middle east and willing to take on the risk, lebanon may not be such a bad
business bet after all. arwa damon for "marketplace middle east" in beirut. up next, the impact of the syrian crisis on its neighbor, lebanon, and its banking center. a interview with central bank governor, riad salami when we come back. [ female announcer ] in the grip of arthritis, back, or back joint pain? aspercreme breaks the grip, with maximum-strength medicine and no embarrassing odor.
riad s salameh took over th central bank in 1993, he's the country's longest serving governor. as the region continues to final the impact of the arab spring, i asked him about the spillover effect of serious unrest on his economy. >> well, as you know, the tourist activity was penalized because those coming by road did not come this year to lebanon.
trade between the two countries is going to be less in terms of volume and the amounts. but as you can see, the lebanese economy has not profited, is not really penalized by what is happening in syria. >> can it be buffered, can remember none still sustain having the capital inflows despite the chaos next door? >> yes, we can. there's confidence in our financial sector. we have growth this year of around 7% in our deposits. our total composites compared to gdp is almost 300% of the gdp. so we have ample liquidity to
finance both the private and public sector. >> if you look at the four-year running growth average for lebanon, it was in the range of 8 pfrs and quite a substantial dip now to 2.5%, projections maybe of 4% in 2012. what is the best formula to get to the pre crisis growth rates for lebanon again. >> we have to restore confidence which was lost in the first half of 2011. our figures show better growth for the second half which unreal liesed could lead to 6%. confidence in lebanon is linked to political and security stability. as our banking sector has a good performance. >> as you know, you're ranlinged in the top tee of central bankers internationally. i wanted to get your thoughts on
the crisis in europe and america. america wants to spend its way out of the crisis. europe is calling for greater austerity. which path would you follow? >> well, i think now is the time to take unorthodox decisions to put liquidity in the banking sector and to save greece. the markets today are penalizing the hesitations and the confusion and stating solutions. >> so you would suggest that greater austerity is not the answer for southern europe going through this very painful recessi recession? >> i think it is not the time to go for austerity. it is the time to put some discipline in the expenditure. but as the growth is not happening neither in europe or in the united states, we are
aggravating the problem by not putting the necessary liquidity and by stressing on austerity programs. >> ria salameh joining us from beirut. send your comments via e-mail to email@example.com. you can check out our web page in arabic as well. that's it for this edition of cnn "marketplace middle east." i'm john defterios, thanks for watching. we'll see you next week. -- captions by vitac -- www.vitac.com