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>> union bank has put its financial strength to work for a wide range of companies, from small businesses to major corporations. what can we do for you? >> and now, "bbc world news america." >> this is "bbc world news america" reported from washington. italy on the brink. borrowing costs reach record levels sparking a wild ride for markets around the world. it is just as chaotic and greece. the prime minister says he is stepping down but we don't know who is stepping up to take his place. a year and a half after the worst oil spill in u.s. history, we returned to the gulf of mexico where the drilling is under way once again.

>> welcome to our viewers on pbs in america and also around the globe. economic and political turmoil go hand-in-hand these days. today, italy is serving up equal measures of both. just a day after prime minister silvio berlusconi plans to resign, the cost of the borrowing has risen to a record level. markets around the world hated to the uncertainty. the dow fell almost 400 points. >> italy is in a full-blown political crisis with the country on the edge of a financial disaster. ministers met to discuss the

bailouts which have caused other countries to seek a bailout. >> italy is seen as extremely weak politically. politically, this is seen as very weak and that is what markets do, they go after the weak ones. >> much of the focus has been on the presidential palace in rome, where the italian president stepping in to try to reassure financial markets. the president of the italian republic summit here today the finance minister and asked to see the economic proposals demanded by the economic union and the markets. the president stressed the importance of adopting these measures within a couple of days. president had to insist there would be no delay over economic reform. >> we need decisions quickly to give a new sense of responsibility and cohesion of the nation. italy must act to escape the dangerous situation.

>> the promised resignation of prime minister silvio berlusconi had not calm the markets as many had predicted. -- had not convinced t markets as many predicted. he scribbled the names above those that opposed him, traders - -traitors. here is why uncertainty. no one knows whether a elections will follow or in national unity government. time is running out. >> please, do take these decisions as soon as possible for the wellness of this country and even for old europe. >> the italian people know that a new austerity plan is likely to be hurried through parliament. there is talk of a special sitting this weekend.

there is a deeper fear that haunts many people. even if they are passed this weekend, will they be enough to keep the debt from mounting? >> i spoke earlier with our correspondent a short time ago. i thought the financial markets were meant to like the news that silvio berlusconi was going to go. >> well, what they did not like was the lack of certainty about whether he was going to go. he had touched his departure to the approval of a financial reform bill. italy to start to tackle its debt crisis. we have seen the president stepping in and saying, we see this sense of urgency.

this bill is going to get passed through the senate and then through the lower house in a matter of days. that is far quicker than this time yesterday. we thought it would take weeks. the markets are likely to find a slightly more reassuring. >> i know there has been an awful lot of attention focused on him and his leadership. to what extent is this a matter for the italian people? will they have to change their way of life if they get with the austerity program? >> well, the people we were speaking to today and around rome, a lot of people were saying that they don't actually mind feeling the pain. -that is as long as those at the top are feeling it too. the elderly working people are taking the brunt of what is going on now.

those at the top are completely immune. this is a common complaint around the world. they say they would be comfortable with it if those of the top take on some pain as well. >> thank you. that is exactly what we're hearing in the u.s. and in other countries around the world. the economic damage in italy is shaking financial markets worldwide. in the eurozone, there are calls for a much bigger bailout fund to be made available. failure to tackle italy's problems could inflict further global damage. >> the euro and eurozone now at the risk of disintegration of fracture with investors becoming reluctant to lend to a government such as italy's with

1.9 trillion euros in debt. today, it became much more expensive for the italian government to borrow. this significantly increases the cost for investors to trade in government debt or bonds. the pace of the crisis is accelerating. what that means is that the size of the bailout is getting bigger day-by-day and unless the politicians do very some -- do something very quickly to support italy, we will see the crisis get worse. >> the mayhem lifted the interest rates the italians will be forced to pay more than 7%. if that was levied on the debt, the italian government would be crippled and the government would not be able to pay everything that they owned. a strike would be a disaster for

italy because they have to find 362 million euros to pay interest. there is only 250 billion euros left in the bailout fund. >> the immediate issue that i think europeans face when trying to stabilize the situation is basically to come up with some new money in order to settle down the italian bond market. that probably means that the european central bank will be center stage in any such solution. >> tonight, the chief economist objected to the idea of a deep pocketed central bank becoming a lender of last resorts for strapped governments such as italy. eurozone countries are obliged

to help each other. >> our responsibility does not end at the borders of our countries, it goes far beyond. >> without kingvale outcome on italy could have mawson -- massive defaults. -- without intervention, italy could face massive default. >> some commentators are calling this a lost decade. >> with the stakes so high, european leaders will find a way of patching up the eurozone. tonight, their plan is hard to spot. cox almost impossible -- >> almost impossible to say.

there is still no word on who is running greece. the prime minister has about out and the vacuum did not stop him making a televised farewell speech. he even managed a hint of optimism. for more, i spoke to our correspondent in athens you could be forgiven for thinking perhaps no one wants this job. >> talks have been going on for days to try to break the deadlock. one of the opposition leaders stormed out of the meeting with the president and the talks broke up. there is disagreement over the name of the prime minister. earlier, we had an address from george papandreou.

he has in effect about out that has left the country in a perilous power vacuum. >> what impact does this have on greece's ture finance, who is actually running the country? >> this is less important besides who will be running the country than exactly what they will be doing. we had indications from mr. papandreou that there had been a commitment on both parties that they will move ahead with ratifying the latest bailout package for greece which basically involves a 50% reduction in greek debt. that is extremely important. without the bailout package, greece would not get the next installment of their international loans. dthat is what they need in order to stave off bankruptcy and avoid default. this could spread throughout the

global economy. this will be an extremely difficult task of whether whoever takes the post because austerity means more social unrest here. it has reached the boiling point but the austerity and the cost-cutting is likely to fan the flames in the three or four months to come. >> not so much a political back-and-forth but rather a poisoned chalice. thank you very much for joining us from greece. social unrest is hardly isolated to greece and italy. tonight in alabama, the most populous county filed for bankruptcy over their own debt crisis making it the largest bankruptcy of a municipality.

in the u.k., some 5000 students marched through central london to protest against increased university fees. there have been hundreds of aftershocks and thousands of people are camping out in tents in freezing conditions in eastern turkey. 10 buildings have collapsed. we have heard the phrase, too big to fail. there is another in policy circles, to nuclear to fail. growing concern has prompted the country to announce new security measures. the u.s. is very worried.

as part of a joint reporting project, the national journal and the atlantic have begun a story on this. the pakistani is our training 8000 extra people to insure the safety of their nuclear weapons. how safe are they? >> they are not very safe. the question i would pose to anyone, if you had 100 nuclear weapons, 120 nuclear weapons that you were looking to store somewhere in the world, would you pick a country that is the epicenter of global jihadists and that also has the headquarters of al qaeda and the pakistani taliban. no, of course not. >> is the pakistani told you

that the threat comes not from jihadists but from america. >> they don't doubt the jihadists threat. the pakistani are extremely worried that the u.s. is going to come in and steal their nuclear weapons. after the osama bin laden raid, the pakistani is realize that the americans can fly into our country and executed operation and fly out before we even know it. >> one of the things that struck me was the relationship that has survived only as long as it has because both countries have decided to believe the lies that they tell each other. these are not just the nuclear allies we are talking about. -- lies we are talking about. >> still hold relationship is

built on euphemism. here is the issue from the american perspective. the u.s. government of both parties, they have known that the pakistani government through its intelligence agencies support groups that the u.s. considers sponsors of terror. this is not really arguable at this point and yet pakistan, on like iran or syria, has never showed up on the list of state sponsors of terror. >> america cannot afford to put it there. >> there is nothing intellectually honest about that list. if it were created in an honest way, you could say that they were a sponsor of state terror. certainly, if you as the indians, they would assert that. we lie about what they're doing, they lie to us about what they're doing. the reason for this is very simple. the relationship is very very complicated. the u.s. gets things out of pakistan, pakistan gets things out of the u.s.

the nine states could not achieve what it is trying to achieve in afghanistan without pakistani help. -- and united states could not achieve what it is trying to achieve in afghanistan. >> thank you very much. you are watching "bbc world news america," still to come -- with the global economy on the rocks, we take you to brazil where they are bucking the trend. the growing middle class is reaping the benefit. russia's mission to mars has run into problems again. the last pitch came wind and unmanned probes went off course. -- the last pitch came when an unmanned probe went off course. they hope to bring it back in line but this is not a good start. >> it is started as a textbook launch. the robot and the rockets blasted off overnight.

its destination was the larger of mars' moons. once the booster rockets have fallen away, the russian spacecraft failed to fire its own engine. it remains in orbit around earth. it seems its navigation system has failed. engineers have three days to reprogram the computer and a desperate attempt to salvage the mission before the batteries go flat. and it was designed to go into orbit around mars and then land in october of next year. it was to collect soil samples before returning to earth. it was always ambitious but no one expected it to fail so soon. russia has had a successful half a century into space. they launched the first man into orbit. they have sent the spacecraft to venus and haley's comet. somehow, they have always been

on monday on their missions to mars. -- they have always been unlucky on their missions to mars. many have failed and none of them has been completely successful. >> in new zealand, hundreds have attended a ceremony tuesday consecrate christchurch cathedral which was wrecked by an earthquake. it had become a symbol of the devastation caused by the quake. the church is to be partially demolished and a new cathedral will be built at a cost of about $30 million. think twice about that card journey. -- car journey. global demand for oil is about to soar. that is the word from the international energy agency. china and other countries are pushing consumption to unprecedented levels. oil companies are exploring ever deeper wells to meet demand. that has risks as we learned in 2010 with the bp oil spill.

we're joined now from the gulf of mexico. >> i am taking a journey into the future. 200 miles offshore, a new frontier and a quest for oil. we travel for an hour and half and then our destination comes into view. this is the deepest drilling and production platform anywhere in the world. we're only here for a few hours. the top man has to sit through an extensive briefing. >> we can always start it back up. that is not going anywhere. we don't want to hurt anybody. >> when shall bought the lease, the technology did not exist to develop the field. now, it does. this has cost more than $3 billion.

the huge floating platform fits into palms and machinery on the seabed. oil began flowing last march and then everything changed. >> the coast guard is searching for survivors from the oil rig explosion and fire. >> the disaster claimed 11 lives and resulted in the worst accident in u.s. history. within weeks, the obama administration has shed down all deepwater drilling. -- shut down all drilling. now, the oil giants are back. this drilling floor is operating 24 hours a day. over the past 18 months, it has been a completely different story. after this drilling, people have left equipment standing idle. >> this has had a big impact. you think about what we're producing today. this is about 50,000 barrels a day. that is a lot of production.

we have lost hundreds of millions of dollars associated with not having that production. >> operating in this water has changed. there are tougher inspection standards, new rules. all blowout preventers have to be independently checked. this was the crucial piece of equipment. can this ever be safe? >> the only way we can have zero risk is to have zero activity. some people say let's have 0 activity but that means zero energy. where you have industrial activity anywhere, you can have industrial accidents. let's do everything we can to>> having lost a full year of exploration, the company is looking to move on. whatever the risks, deep water drilling seems set to go.

>> those jobs have been elusive for many countries and yesterday we reported on how the middle-class here in america is being squeezed. it is not a pattern everywhere. in emerging economies like brazil, the middle-class is growing and many standards are rising. >> they never thought they would get this height in their lives. but this is their first time on an airplane. >> i feel like a bird. our planet is wonderful. these clouds are wonderful. >> the boom in travel industry is being fuelled by a new class of passengers. lower and middle class civilians are traveling and spending in record numbers. -- brazilians are traveling and spending in record numbers.

♪ ♪ that these people are part of a new generation of tourists. they have come to a store in town where the first europeans landed in brazil 500 years ago. -- they have come to a historic town where the first europeans landed. >> food is not the only thing we need to live. this is living. look how beautiful this places. >> these people are clearly making the most of their holidays. this is a dream that has come true thanks to brazil's economic growth which has saved millions from poverty. these speeches used to be the preserve of the traditional middle-class, a professional and educated elite. -- these beaches used to be the preserve of the traditional middle-class. >> of course i feel there is prejudice, but they will have to put up with it. >> a short ride south still offers an escape from mass tourism.

even here, a more exclusive and expensive villas, there are signs of tension. "there are many people coming to this place now but they need to be more educated. they have to learn to respect this place. >> we noticed that not everyone here belongs to a or b classes. there are many people from the lower classes. they have different clothes and behavior. >> if of the country's economy continues to grow, so will the middle class. the country's emergence on the world has already shaken up the traditional order. now, at home, brazilians of every class are rethinking their roles and expectations for the future.

>> that brings today's show to a close. you can reach me on twitter. from all of us here at "bbc world news america," thank you for watching. >> funding was made possible by the freeman foundation of new york, stowe, vermont, and honolulu. newman's own foundation. union bank. and shell. >> this is kim - about to feel one of hisat favorite sensations. at shell, we're developing

more efficient fuels in countries like malaysia that can help us get the most from our energy resources. let's use energy more efficiently. let's go. >> union bank has put its financial strength to work for a wide range of companies, from small businesses to major corporations. what can we do for you? >> "bbc world news america" was presented by kcet los angeles. presented by kcet los angeles.