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tv   Journal  PBS  September 7, 2011 6:00pm-6:30pm PDT

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might not be given those same opportunities. you have a chance to help do something about it. check out the website at the bottom of the screen and get involved, and help our young people pursue their dreams. thank you. >> welcome to "the journal." these are our top stories at this hour. germany's highest court says yes to bailing out the eurozone, but presents a new headache to
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the chancellor. in russia, more than 40 people have died after a plane crashed just after takeoff. watch out for the trash. find out about a new radar that could trek the junk flying about in outer space. we begin in germany, where the constitutional court has ruled that germany's hundred and to the eurozone bailout of grease was legal. the court also ruled that chancellor angela merkle must in effect that the parliamentary go-ahead for similar initiatives in the future. >> the court has thrown its weight behind the eurozone. the plaintiffs argued the bailout of debtor nations violated the german constitution and eu treaties.
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the decision was clear from the judge. but the justices also barred the government from going it alone in the future. the court ruled that parliament must debate and approve any more bailouts. in the bundestag, this came as a relief. it gave into lumber called the ability to continue her pro-iraq policies. -- it gave angela merkle the ability to continue her pro- euro policies. >> the euro is much more than a currency. >> she again dismissed calls for eurobonds, which would carry a single interest rates for all eurozone members. the opposition criticized her stance on the eurobond and called her government a failure.
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>> the european ship is drifting aimlessly. the world is waiting for berlin, but there is silence and this agreement in the coalition. that is not enough. the card just chasing the banks. they do not have the will to break the will of the financial markets. the dream coalition has become a nightmare for germany. the majority is disappearing. this chancellorship is obviously entering its twilight. >> some members of her coalition are reluctant to back the latest bailout package. merkle will have to work to restore that majority. parliament votes in three weeks. >> the ruling means the process of helping other european countries in crisis will now be much more political. we put that to correspondent simon young at the german parliament. >> what the court has said is
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that the government must ensure that parliament has its proper say on all these big decisions affecting finances, affecting expenditure. at least parliament in the form of the budgetary committee. i think what this will do is encourage many euro skeptics in parliament to exploit the opportunities they have for scrutiny. on the other hand, some of the rebels are mainly worried about the role of parliament in all of this. they may feel the court decision backs them up. having said that, this process remains extremely complex. there is no blueprint for rescuing the euro. nobody knows exactly how many times the government may be tempted to come back to parliament in future to try to secure approval for further measures or further trenches of money. it is good to be more difficult
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for the government to get through. we are not out of the woods yet. this decision really does not show how angela merkle can move forward. she still has a tough time in parliament ahead of her. >> that was our political correspondent, and young. one of the countries that has been evicted from the bailout -- that has benefited from the bailout mechanism is greece. the you will see evans impose strict cost-cutting measures. -- the eu will see gris impose strict cost-cutting measures. >> greek texas drivers will be on strike, protesting the austerity budget. the majority of the greeks reject the savings measures and feel the you, most of all germany, is meddling in sovereign affairs. but there was general
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satisfaction with the court ruling. >> it should never have been argued before a court. that was a step too far. >> it is a very complicated issue. in the end, the simple people must pay the price. we greeks are being hit especially hard with wage cuts and high unemployment. i am also unemployed. >> most believe the budget cannot be cut more than it already has been. they're disappointed germany has taken so long to free up funds for the bailout package. >> will have more later in the journal. first, the impact on the financial markets, where there was a sigh of relief. >> the markets are certainly applauding the ruling. it gives political leaders in europe leeway to act. they are under increasing pressure to deal with that and
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the recession. as the debt crisis has deepened, market volatility has increased. the investors saw this as an opportunity to buy back into stocks. that does not mean the roller- coaster ride is over. >> traders at the frankfurt stocks gained were prepared for the worst this morning. now that support for the bailout mechanism has been approved, they are relieved. many say the future involvement of parliament in payouts is a good thing. germany's association of state- owned banks agrees. members say recent volatility on stock markets is mostly related to uncertainty about europe's ability to pull itself out of a serious debt problem. >> the clarification that the government is free to support the bailout fund but has to support -- but has to consult parliament will make future assistance possible. >> we have problems we cannot
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solve quickly. we will continue to experience for action, so this will still be a problem for equity markets. but things could improve if it turns out the economy is not hit as hard as many fear. >> some economists are upbeat that the wide swings we have seen on stock exchanges in the last few weeks might soon come to an end. >> the ruling dominated the day in frankfurt. here is our markets report with more. >> traders here in frankfurt waited nervously for the judgment. all the more relief when the ruling came. no bailout plan has to be shelved. banks are considered the most endangered if the state would go into default. banking shares were among the top earners in frankfurt. still, people say it is too early to say the crisis is over. nothing has been solved.
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people are still waiting for concrete solutions from the politicians. people are saying volatility is likely to continue, putting pressure on shares. >> let us look at the closing numbers in europe and frankfurt. the benchmark dax finishing up 4%. eurostoxx 50 up 3.4%. the dow jones industrials up 2.4%. the euro at $1.4096. italy and spain are making progress in attempts to avert a debt crisis. the italian government has approved the austerity program and will pass it to the lower chamber. spain also give approval to reforms that would cap the budget deficit. we will look of how the most fragile eurozone economies are
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in spain, demonstrators took to the streets for a second day running. many are worried about steep cutbacks in social benefits. despite protests, parliament passed a controversial constitutional reform, setting a limit on future deficits. the italian senate passed a new austerity package aimed at reducing the country's deficit by more than 54 billion euros over three years. the emergency measures are the top story in italy. hikes in sales tax and an extra levy on those with large incomes. the plan has been revised constantly and the government has lost credibility. greece can only attract investors to 10-year bonds by offering 18% interest, a record rate for an eu member. one reason is many austerity measures have not been fully implemented. athens has sold only a fraction of its holding in state enterprises, promise to bring
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in 50 billion euros. ireland is being kept alive by an 85 billion your rope belt -- euro bailout. growth projections are being revised downward. the imf is calling on the irish government to sell state-owned assets to reduce poland's huge debts. >> sweden's iconic car maker sa ab has filed for protection from bankruptcy while it continues to look for other funding. saab says it will present a reorganization plan to creditors in three weeks and get assembly lines back up and running. >> saab has been unable to pay its bills for months, some suppliers have stopped delivering components. production ground to a halt in june. workers are not getting paid. saab's debts mount.
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for the first half of this year, the company lost 224 million euros. they sold 13,000 vehicles, more than last year. >> we will be out of cars soon. for that reason and other reasons, the most important thing now, of course, is to pay the workers. we must make a deal with the suppliers and get production going again. >> finding backers has been a real problem. this could be the end of the line for the swedish car manufacturer. the saab 9000 was one of the first vehicles with a computerized display. but then the innovations were few and far between. although many would like to see them survive because of the unique tradition, the economics do not seem to add up. >> we have to go to russia now, because at least 43 people have
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been reported killed after a plane carrying a top ice hockey team came down shortly after takeoff. one of those who lost their lives is a member of the national hockey squad. the plane had just left the airport in yaroslavl, 40 kilometers northeast of moscow. >> the plane carrying the lokomotiv team plunged into the river shortly after takeoff. international players from the czech republic, sweden, latvia, and germany were killed, as well as the canadian coach. the plane crashed and caught fire. then there was another explosion. >> there was a mushroom fireball like a nuclear explosion, and then thick black smoke. >> because of the crash is not
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yet known, but reports suggest the plane struggled to take off and hit an antenna at the end of the runway. >> the french foreign minister has accused syria of crimes against humanity in its crackdown against anti- government protesters. syrian activists said at least 14 more protesters were killed in homs as army vehicles swept into the old city. one resident is quoted as saying the gunfire never seemed to stop. homs has been at the center of months of demonstrations against the president. in pakistan, suicide bombings have killed at least 20 people in the southwest city of cueto. the killing includes the man who heads the force that recently killed a cut the operatives. one bomb struck near his car and
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another near the house. the man himself survived the attack, but his wife was killed and at least two of his children were injured. outer space is full of junk, and it is reaching a tipping point according to a report released earlier this month by u.s. space researchers. the millions of pieces of debris floating around are a danger to satellites and astronaut orbiting earth. now a laser would help. >> the simulation of an orbital collision is already a reality. over the last 50 years, we have filled our cosmic backyard with space junk. it ranges from bits of rockets to broken tools. it is a real threat to all the high-tech equipment in orbit. this summer, the international space station was temporarily evacuate did because debris was having its way. a company near canberra, australia is working on the
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solution. specialists have developed a laser which contract an object as small as a fingernail. this would allow satellites to quickly be moved out of harm's way. >> we can reduce by 70% the number of moves the satellite is making by giving more accurate tracking. then we have a 70% improvement in terms of the lifetime of the satellite. >> the scientists hope to contribute to the conservation of the space environment. the u.s. defense department has given them $3 million to prove the tracker really works. >> one item of sports news. the spending champs spain have beaten and germany in the second round of the european basketball championships. it was always good to be a tough match against spain, but germany did put up stiff resistance. they even took the lead after
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this rally by dirk nowitzki. germany made too many errors and allowed spain to gain the upper hand. germany must win against turkey and lithuania to have any chance of reaching the quarterfinals. i will be back with an in-depth look at the crucial ruling from germany's constitutional court. stay tuned.
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>> as we have seen, germany's constitutional court as handed down a key ruling that the country's participation in rescuing other ailing eurozone countries is constitutional. but there is a major privies so. judges say the government must in future consult parliament
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before using public money to help other economies. one former constitutional lawyer says marco can no longer just travel to paris and agreed with president sarkozy and present the facts to the german people. this was how german lawmakers saw the issue. >> in the nine years i have been a member of the german parliament, this question is by far the most difficult i have had to answer. >> since 2008, we have been in a permanent state of crisis. it began with individual banks and became a global crisis. but now it is a sovereign debt crisis. we are treading new ground. >> it is difficult for every deputy to grasp what is happening, but it is as important as the question of german reunification back in its time. >> the events of recent years have forced people to quickly
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decide on complex matters applied to billions of euros. the normal parliamentary procedures are not adequate anymore. >> for some years, parliament has been kept out of the decision making process. we are faced with a loss of democracy within parliament. the right to preside over the budget is the key right of parliament. it has to be preserved. we will soon be agreeing to pay into the european stability mechanism, or in the form of large amounts of guarantees. >> as parliamentarians, we demand participation. our coalition have forced through unanimous voting in the stability fund. germany has a veto. we as lawmakers have the power in parliament to impose this veto. >> the german government can brief us in a more timely, precise, better way.
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in this scenario, the problem is cutting through the considerable amount of material. >> it is a real problem, but i make a big effort to get on top of things when draft arrived in short notice. -- when drafts arrive with short notice. >> it has been a year. >> you have to get into the details, even if it takes a few hours' extra. >> to talk about the ruling here in germany by the supreme court, i am joined by simon young. a very important ruling. was it what you expected? >> i think this was what most of the experts were expecting. there was a small chance that the constitutional court might have questioned the government right to carry out these bailouts and to take on the economic problems of other countries on this scale. but as it turned out, the
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guardians of germany's constitution recognized there are limits to those powers. they said the powers of the government and above all parliament must be respected. that is the message coming out today. the sovereignty of parliament is paramount. in that sense, the decision is in line with previous rulings by the court about the big european treaties. the parliament must retain its ability to adopt or reject decisions when they affect the big money questions. >> let us talk about chancellor angela marco. is your position being strengthened or weakened? >> this decision went in her favor. this is what she was looking for. i think this is a bruising week for the chancellor.
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she felt her policy had been endorsed, if anything, by the court. the opposition leaders were queuing up to the opposite point of view, saying that the government has failed to inform the parliament as it has changed tack so many times in recent months. it has been impossible for people to keep up. the other thing is how many rebels within the government ranks are being encouraged to vote against the new powers for the european financial stability facility. a vote on that coming up later this month. if many rebels to vote against the government, the will of course tarnish the image of chancellor merkle. >> that decision does not mean it will be easier for europe, does it? >> certainly not. what this does is introduce more politics, more party politicking, into this decision
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making process. it will incur -- euro skeptics. it could unsettle the markets. they want to know which way things are going. this does not help with that. as we know, the markets do not like it. >> thank you for that update. recently, germany's finance minister wolfgang short-term -- finance minister has said that to come to terms with its challenges, the eurozone must press ahead with greater financial union or follow -- fall behind in the global economy. he is talking about shared fiscal governance. for many, that points the way to a united states of europe. >> these are dark days with no end in sight to the eurozone crisis. experts say the currency union has no time to lose in getting out of the debt debacle. >> the worst scenario is the
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monetary union collapses and europe's international power is declining rapidly. >> in brussels, fears are growing that more is needed an emergency summits and bailouts. they want an economic government for the eu with real power. >> if we do get an economic government, we would need a transfer of sovereignty to brussels. not dramatic, but enough to stop one country from raising taxes while another drops them. >> that means, and fiscal policy on top of a common political agenda, a step toward a united states of europe, as long as the person in charge has the necessary powers. >> a person which is full accountability to the european parliament for all actions taken on the fiscal front, who can take decisions going over certain member states if they do not respect certain obligations.
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>> perhaps the measure of how serious the situation has become is the number of former european leaders who have been popping up in brussels. they have been throwing their weight behind the notion of more europe to solve europe's problems, not less. they argue that eurobonds, so far rejected by berlin, should be part of a solution. >> eurobonds should be developed. they need an effective control mechanism to avoid systematic fiscal deficit. nation states have to understand and will need to share certain dimensions of sovereignty to a central european entity. >> this scenario would not be painful for national parliaments, as their voters would not be affected. a different story for governments in office. >> a strong vested interest and
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strong feelings that this is part of the national history. the only way to make it work in the future is to have more power at the center. that is the only way by which monetary union can survive in the long term. >> weather the storm clouds over europe clear is ultimately in the hands of national governments. they must decide whether to vote for a national or european solution. >> that has been our look at wednesday's key ruling by germany's constitutional court, and its implications for the financial challenges facing the eurozone.
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