tv BBC World News BBC America January 22, 2015 10:00am-11:01am EST
out the colonial penn program, and ask one of their representatives about a plan that meets your needs. i'm definitely gonna call about the colonial penn program. hello you're watching gmt. i'm lucy hockings. our top stories, ordinary people on a bus in donetsk are the latest victims of the bloody conflict in ukraine. at least eight people are killed. and it's unclear which side was responsible for the attack, but it comes as ukrainian forces lose control of the airports of pro-russian rebels. we'll take you live to donetsk and also to the capital, kiev. and on a day europe's central bank is expected to announce a huge injection of cash into the economy, we're in europe's most indebted country, greece as it prepares for the
election on sunday. we're testing the mood in the cafes of athens. plus rubbing shoulders with the world's wealthiest in davos, with a noble explanation of the world's economy, using snowballs. and aaron is here. it seems like there's an end to teasing. >> the teasing is out, and the easing could be in. 2 1/2 years after the european central bank's big boss says he will do whatever it takes to preserve the euro it looks like the bank will finally follow through on that promise. stay with us we'll be bringing you the decision live later in the hour with all the reaction coming from brussels and davos. hello. it's midday in london 1:00 in the afternoon in davos, and 2:00 p.m. in eastern ukraine, where there are horrific scenes in
donetsk. ordinary people on a bus, the latest victims of the escalating violence. despite renewed calls for a cease-fire at peace talks in berlin. at least eight people were killed after shelling hit a bus stop in the center of donetsk. we're getting reports that said that that figure could be much higher. these were not soldiers just ordinary people getting on with that are lives. also today, ukrainian forces reported to have withdrawn from the main path of donetsk airport. this is a scene as an important symbolic victory for the rebels after months of heavy fighting around the airport. i'm joined now by a web cam from donetsk, but a free lance journalist who has been in ukraine since february 2014. christina, good to have you with us. really horrific scenes in donetsk today. what more can you tell us about the shelling of this bus. >> well, i think it's really -- this shelling was really surprising because it's in an
area that has been relatively quiet. i don't know of any shelling or anything that has gone on within this area. it's well within where -- ukraine has been where its workings are far away. so obviously, they're blaming russia being responsible for arming the rebels and again, it was way far away from the ukrainian line. there has been some discussion of infighting within the rebel side. i spoke a little while ago to a donetsk s.w.a.t. team, saying that criminals had become part of the rebels and had become a real problem for them that these criminals are in power and flubs and that that needs to be stopped, as well as getting groups within the rebel's side as well as the rebel government and so they could have some different political interest as
well. it's easy to see how a power struggle could happen in this region, but of course it's much too early to really tell who is behind this attack. >> christina, life was already difficult on donetsk. scary as well. but how must it feel for people at the moment to know that they can't even go and get a bus, without fearing for their lives? >> yeah i think, the significance of this recent attack it has been pretty quiet since earlier, after the truth. but many people did believe it to be true after the holidays. however, i think it tends to be a surprise to people. what surprised me is yesterday i went about five minutes away from the downtown the center of donetsk and five minutes away i saw a building that had been destroyed, presumably by a shelling, and the fact that it's
so close to the center one local said that now, to go in. of course it was a city caught in the donconflict for months, but there could be areas you can feel okay in. and again, people have started walking the streets again a bit, but i think it's really hit home for them that it's coming civil right into the heart of city. >> christina, thanks so much for the update from donetsk. let's get more now on what these new developments mean. we can speak to our correspondent in kiev for the moment, but first let's bring you some quick background now to where the battleground is right now. we've got a recent map for you that shows the areas under rebel's control. it's marked here with red and grey line in the east of ukraine, with access to the black sea in the south. international monitors say more than 5,000 people have been killed in ukraine, since the conflict started in april last year.
the organization for security and europe also say more than 10,000 people have been wounded. and as many as 1 million people have been forced out of their homes by fighting. let's take you now to david stern, who is in kiev for us. david, we've just been hearing about what happened in donetsk today. but we did see this meeting in berlin yesterday. does it feel in ukraine, that these talks are simply meaningless, because we're seeing an explanation of violence on the ground. >> i don't think they're meaningless, obviously, for the fighting to stop the talks do need to take place. but at the moment they do seem to be spinning in place. the fighting is going on. we've been hearing, obviously, from donetsk about this horrific loss of life in the city itself. and as the fighting escalates, it needs to be said also that the war is also escalating. the ukrainians blaming the rebels, russia as well and we've just heard from the
russian foreign ministry calling this a blunt provocation, blaming the party of war in kiev. it's said in the ukrainians were trying to undermine the peace process. so i think we can safely say that at the moment this is very much not helping the talks. the fighting is escalating not just in donetsk, but also in other towns around the donetsk region as well as region,, so it will take a great deal to dial back the tensions. >> and is it clear where the numbers are in the military buildup? >> it's not clear. the ukrainians have announced a mobilization, more a call-up. they're bringing in tens of thousands more but this is just starting. they also have people that are obviously going to the east on a regular basis. at the same time, though we are seeing a large number of fighters among the russian-backed separatist.
we are hearing a lot about heavy equipment that they had. so it's not exactly, the call-up doesn't have an effect yet, but there does seem to be more people entering into the conflict in the east. >> and david, what about that figure we were just sharing with people, that 1 million people have had to leave their homes. what is life like for them? >> well they've been going to a number of places. in ukraine and also in russia. the internally displaced people there are some in kiev. they are finding homes with friends or acquaintances or perhaps if they have enough money, they can rent or buy an apartment. but a large number of them are in temporary housing, in dormitories around the area not just in kiev but in other places. it's a very difficult situation. some of them don't have heating or very little. and of course it's a very uncertain existence and their looking on what's going on right now, obviously, and becoming extremely concerned about what is happening in their hometowns
and cities. >> okay, david, thanks so much for the update from kiev. we've got a lot more for you on the website as well about the conflict in ukraine. our correspondent in moscow has a great app. she gives you russia's involvement in the conflict. as david was just saying there's a war of words between both sides now, but sarah's looking at whether the russians are thinking war or really pushing for peace. that's at bbc.com/news. britain was hard hit by the financial crisis in 2008 but both country's economies are performing well, at least on paper. it's not a coincidence that both have called a strategy called quantitative easing. basically, this means printing money to inject cash into a struggling economy. in about an hour's time the european central bank is expected to announce that it's going to follow the same path. let's take a look now at how qe actually works.
>> aaron's with me now to look into this a little bit further. it seems like it's been a long time since we've had quantitative easing here in europe. but some countries don't like it. >> the germans. the payroll masters of europe. day don't like this. they're very worried that you pump -- you know we're talking quite possibly, to the total tune of about $1 trillion euros. mario draghi's plan is what we're expecting to hear is that he wants to pump all this cash 15 billion euros every month, keep the plan running until the end of 2016, and that would be 1.1 trillion euro the plan lady out on the table. the germans don't like it, because they're worried that all this cheap money flowing around will kind of put the other european countries that really
need to make structural reforms in their economy, they want to put that kind of on the back burner and start just slapping up all this cheap money. the german like structural reform. the qe is not structural reform. that's what they're worried about. but mario an draghi the big bank of bank said 2 1/2 years ago, he said i will do whatever it takes. i am ready to do whatever it takes to preserve the euro. finally after all this time we may see this -- very likely going to see this announcement that critics will say, both sides will say, the european and euro zone and economies are in such a state that something like this is needed. >> huge amounts of money. billions have been spent here trillions, more than the u.s. >> their program was $3.7 trillion. >> and it's worked? >> still debatable, but, yes. look at the u.s. economy and the uk economy. the international monetary fund as good examples of certainly
putting the financial crisis behind them. there is an argument that yes, these economic stimulus programs have certainly boosted both the uk and the u.s. is it right for europe we'll have to wait and see. >> one country that will be closely watching the qe announcement is greece. they're getting ready for an election on sunday. it's an important one, because depending on the result some say it could even trigger greece's eventually exit from the euro zone. let's take you to athens and we can join mark lowen who's there for us. mark? >> thank you very much indeed. welcome to lovely sunny athens. great weather for theened of january. in this beautiful square you can see the vibrant cultural is alive and well. sometimes we focus too much on the pain and suffering, but again beneath the surface, there is a lot of pain here. this is a country whose economy has declined by a quarter in the
last four years. unemployment over 25%. pensions and salaries have been cut an average by 40%. and that is very much at the forefront of people's minds, as they prepare to decide who to vote for on sunday. do they go for the outgoing party, new democracy that wants to austerity, or try something completely new. they want to completely renegotiate the whole bailout and write off half of greece's debt. let's speak to one voter here at this cafe in athens. have you decided who you're going to vote for? >> yes. >> the ruling party. >> the new democracy? >> yes. >> but isn't it seen as the party of the past the party of arts the party of corruption -- >> no, there's a saying here in greece, who's going to pull the chestnuts out of the fire? so they had a plan. no matter if you like it or not. one way or the other, we should go out of this mess.
>> what do you think of the new exciting party for many people who will go against the established order? >> you're right, it is new. but new does not mean better. because i'm sure he has a plan to follow that's meant for the better of the country. and it's a plan that is not well explained to the people pop so the people are confused. >> do you think that he can, he can do what he promised wipe out half of greek debt? >> i don't think so. say they're about to turn the elections, but they have to follow and to stick to their roots that they have been so far. he has to make a lot of changes and these changes are, he has to follow. this is what i mean. it's not for the better. >> thank you so much indeed.
if alexis tsipras tries to pull out the bonds, that's a response from germany, saying we will not give the bailout money. and greece has to meet imf debt in the next few weeks. it will have to pay 7 billion euros to the european central bank in august. so we could be seeing a greek default if there's a real confrontation with berlin and brussels. we'll bring you the live results an hour from sunday and in the days ahead, live here on bbc world news. >> mark good to see you in athens. milwaukee lowen, covering the greek election for us throughout the weekend. do join him. do stay with us here on "bbc world news." still to come -- >> we'll be talking to grammy award-winning musician. she's at davos at the world economic forum and has been presented with a crystal award there.
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let's go to the world economic forum at the swiss ski resort of davos, where the world's richest and most powerful gather for three days of debates, dinner and deals. each year a prize is awarded. it's called the crystal award which recognizes artists who help improve the state of art for their art, and this year it goes to angelique kidjo, she promotes world's education in africa. you can see her there. she joins us from davos. first, let's take the opportunity to have a listen to some of her music. ♪ >> angelique, good to have you
with us here on "gmt." congratulations on your award. when you're in a room with some of the most richest and powerful people in the world and you've got them cornered what is your message to them? >> my message to them is invest in education. to help the government in the poor countries is best is education. just for the sake of their own business. because you have women ceo, your business get better. you get women employees, they work better. girl's education is proven to be the most efficient economic tool that we have to get out of poverty. >> and angelique, does it feel as if the missing chibok girls and the international attention that was brought to that story and to what's happening in northern nigeria has sharpened your argument and helped you? >> well they are listening, because they're realizing, what happened in nigeria, can happen
other places if we don't secure this. and the new report of unicef has proven that it's a danger to the stability of the world and to the stability of business communities. it does not help to educate more boys than girls. the equity in education is free to the success of most companies. because even stability, there's no economy, there's no life pretty much. >> and does it feel that people are really listening to you there? or is a lot of lip service paid to them? >> oh, they're listening and i give them the benefit of the doubt. let them listen and give them the chance to do something. if they do something, then we can come back. but so far, we are telling them and we personally are telling them there's an oppression history. how education can help them have partners in business advocate for their own business and give
them a better perception from the public out there, that it doesn't trickle down to the people. so by educating people and giving them a chance i'm educating the youth of africa. because in 250, we'll have to visit europe and the world. how are we prepared for that if we are not educating them giving them hope even the perspective of future. and if every country are talking about immigration. how do you stop immigration? by investing in the education of the children of africa for them to want to lead in their country. because once they leave, even if you're a construction worker when you leave africa you multiply your salary by ten. why can't we make that happen in africa? >> angelique, thank you for joining us. angelique kidjo, who just won the crystal award at davos.
what angelique was referring to there was the gap between the world's richest and poorest are some of the agendas at the world economic forum. and sometimes we have to visualize that gap. so the swedish professor hans has an explanation, using snowballs. ♪ >> there are 7 billion people in the world. imagine this is 1 billion and this is the poorest billion. they are leaving here on extreme poverty. if they get poorer they would die. the next billion here has a little bit more income and then i put them here with higher and higher income average income of course over the years. and you can see, we are totally
at 7 billion. >> 1, 2, 3, 4, 5, 6, 7, yeah. so take us through what these deferent income levels are. >> the most difficult is to understand how poor these people are down here. they can't even afford to buy a bicycle. i place the bicycle here. and when you are up here then you can think about buying a car. so you can see 1, 2, 3, 4 billion people have a bicycle and a car. >> so there's a rich world and a poor world, that's obviously nonsense, because actually most people now are somewhere between the bike and the car. >> yeah and if you can't afford the car, go for a motor bike. and if you go up here to the richest, that's where you can afford you know, to fly on holiday. >> maybe once a year you're going overseas on a plane. >> so brazil, what would you put
the brazilian average? >> the poorest people in brazil are here the richest are here the bulk live here. >> but the really important thing is how this has been changing over time. because the balls have been moving up the wall haven't they? >> they have. when i was in school you know this one didn't exist. it was the poor people in the developing world, and the rich people over there. almost nothing in the middle. this is the big change during my lifetime. but now, you know, we have all these people in the middle. so the population growth has not added people in extreme poverty. but the fact that we haven't been able to lift this one up to the bicycle level. that's from where boko haram emerged and boko haram hides. >> and the explanation there of the gap between rich and poor. i think he should be signed up
by sesame street too, don't you think? do stay with us. coming up on the next half hour on "gmt," we'll bring you the very latest on international efforts to counter the threat from islamic state fighters. stay with us here in london. we'll bring you more. you drop 40 grand on a new set of wheels, then... wham! a minivan t-bones you. guess what: your insurance company will only give you 37-thousand to replace it. "depreciation" they claim. "how can my car depreciate before it's first oil change?" you ask.
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i'm lucy hockings. in this half hour is the coalition campaign's defeat of islamic state making a difference? as ministers from 20 countries meet here in london we go to see if progress has been made and the huge task that still lies ahead. we'll also get rare access to one of the world's most important trade corridors, the suez canal to find out if its function is on track. first, aaron joins us again. and we are really counting down now, aaron. >> nail biting, lucy. of course, the 2 1/2 years after
the european's central bank's big boss mario draghi said he was ready to do whatever it took to preserve the euro the debate could finally follow through on that promise. we'll be bringing you that decision live in the next 15 minutes, with all the reaction from both brussels and davos. welcome back to "gmt." international efforts to counter the threat from the islamic state fighters are being discussed at a meeting here in london we foreign ministers. one of the key challenges they're facing is how to halt the flow of recruits to is. is now control lark waves of syria and iraq and the u.s.-led coalition has been carrying out air strikes since august. our diplomatic correspondent, james rugs reports.
>> this is by far of all the weapons deployed in the international effort to destroy isis, or so-called islamic state. the "uss carl vinson" has already deployed hundreds of attacks. they look for an elusive enemy. now the london conference of some 20 coalition countries, about a third of those nations who have pledged support, have to ask tough questions about the difference that their joint campaign is making. it's only a combination of air strikes and ground forces which could eventually overwhelm the extremists. new pictures from the kurdish peshmerga forces give an idea of the scale of the challenge. now ministers this london will be exploring how to build on this. how to accelerate and intensify
a long-term campaign. in president obama's words, to degrade and ultimately destroy the threat. attacks in france have also changed the politics of global responses to islamist extremism. there's now even greater political pressure on governments from their people to show more decisive results. it's been weeks since authorities in belgium say they foiled an imminent terrorist plot to launch multiple attacks on the police. and they finally released the names of the two suspects who were shot dead in the raid. paul adams reports from a country still trying to understand the implications of what very nearly happened. >> reporter: belgium had a narrow escape last week, an outrage averted, not committed, but the country is rattled and
looking for answers. so far, there are very few. soldiers continue to guard buildings around brussels, a sight most belgiums have never seen before. prosecutors have now released the names of two suspects killed in the raid on vervier. 25-year-old sofiane and a 23-year-old. other maims are listed. seven already in custody. almost a week after the dramatic events in vervier, the belgian authorities are being remarkably tight-lipped about the nature and extent of the plot they uncovered there. amid a great deal of speculation, the people of belgium are left to ponder what it all means. an immigrant population knows it's under scrutiny. it's an overwhelmingly moroccan neighborhood. the police have carried out several raids here. ishmael says he hears more and more young men talking about leaving to fight in syria.
he says he even managed to stop one from going. >> it's been going on for 2 1/2, 3 years. it's come up a lot lately because they're coming back, and that means a danger for europe, because they're criminals. they kill people for nothing. it's a danger. >> has belgium been slow to recognize the problem? a question i put to their mayor. >> translator: europe doesn't understood the scale of this phenomenon, not just belgium. what we can say is belgium failed to integrate the newcomers properly. we just let it happen. and because of that, some people retreated into outlays. >> reporter: but in the grand surroundings of the palace, a man who spent the past ten years defending young muslims accused of terrorism defenses, says it is an elephant in the room, belgium's involvement in the
campaign against the group calling itself islamic state. >> translator: it's only when we started bombing muslims over here, that we started having the first hint of hostility and attacks over here in belgium. it's not only poverty and bad integration, that in itself is not enough. >> reporter: whatever the reasons, belgium's narrow escape has thrust this small country into the limelight, forced it to confront the reality of dangerous enemies at home. paul adams, bbc news, brussels. let's take you to egypt now, where officials say the expansion of the suez canal, one of the world's most important trade corridors, will be completed on time in august. the chairman of the canal authority has told the bbc work is going on around the clock to finish a new lane which will double the capacity of the waterway. the 146-year-old canal which links the mediterranean and the red sea, is the fastest shipping
route between europe and asia. >> reporter: an aerial display over a prized asset. the suez canal. this promotional video showcases the historic waterway. a source of national pride and revenue. it's being expanded by order of egypt's president, abdul fatah al sisi, aimed at refloating a battered economy. a second canal is being carved out of the desert. it's supposed to take three years. the president decreed it should take only one. here is the vision for the future, the new lane will allow two-way traffic in part of the waterway, reducing waiting and transit times. we were taken along the canal on
a tug boat, seeing some of the work loongs the way. the egyptian public has funded all this. investing $8.5 billion in just eight days. >> it's rare to get access to the suez canal. it's under tight military control. it has always been strategic and important to egypt and it brings in badly needed hard currency. the hope is the new canal under construction will double the number of ships going through and increase revenues. but more than this. officials say the new waterway will be a symbol of the new egypt. the admiral in charge told me the first ship was sailed through the new lane in august, meeting the one-year deadline, and creating a legacy for future generations. >> the suez canal is history for egypt, okay? our grandfathers digging the first canal. and really digging the new suez
canal. that's for the future, and for our children and grandchild. >> the suez canal, never far from the news, in its 87 years of history, hits the headlines like a bombshell. >> reporter: a news report from 1956, when egypt seized the canal from britain and france. a moment of triumph for president nasr and the egyptian people. the canal remains a symbol of national pride here, but experts say the money to expand it might be better spent elsewhere. >> in the case of the suez canal, it's a patriotic project, first of all, by developing something the people can feel proud of. and that's very difficult to quantify. from an economic point of view, it can be argued, i think, pretty well, that around $8
billion could have been better used on upgrading egypt's infrastructure. our power stations, on upgrading the rail wind structure, mass transit support in the cities, new housing. >> reporter: but the authorities are banking on landmark projects like this one. they can't afford to fail here. without tangible economic progress, there could be more unrest on the horizon. do stay with us here on bbc worlt news. still to come the ecb expected to announce at any moment that they will be injecting billions of euros into the economy. aaron are join us as soon as that news comes to us with all the very latest. [container door opening] ♪ what makes it an suv is what you can get into it. ♪ [container door closing] what makes it an nx is what you can get out of it. ♪
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our top stories this hour. at least eight people have died after a bus stop was shelled in donetsk in eastern ukraine. diplomats from more than 20 countries are meeting here in london to discuss the threat from islamic state fighters. we've been talking about the strong recovery of the u.s. economy. a big theme of president obama's state of the union speech earlier this week. but he also said that millions of americans are still struggling with low wages. in tucson where the bbc's pop-up team is based this month, many people live in mobile homes. we went totty the sleepy hollow trailer park to find o out what life is like there. >> i had a job in december and now i'm trying to do what i need to do to clean the park up. the park is really ran down.
this park's been here since probably 1940. here's what the park used to look like. it was really a nice park. >> we had over 400 spaces. we were totally full. >> how long have you been here? >> 19 years. >> well, i get $8.76 a month and 500 goes to the landlord, plus, of course there's electricity and gas, which is about $115 a month. you don't have a whole lot for food. >> we had the american dream. when you get old, you live in luxury in these beautiful condominiums. you know? i mean, we worked all our lives and so we should -- we should be able to take it easy. >> the owner, he used to put money into this park, and it's a loss. it's just a told loss. that's why they're rented as is. you know, some move in and destroy them, so -- some do nice jobs.
>> my living room, my kitchen, large dining room. you paint it. nice cozy home. the main thing is, it's mine. >> this is the old manager's place. don't be shocked too much, please. this is what she lived in for three years. she moved out three weeks ago. look at the cockroaches that this lady was living in. would you move in here and live like this? >> no. >> there's people that can. there's people that will.
>> you've got to try for yourself. you've got to try. this is the land of opportunities. the land of freedom, the land of opportunities, so, yeah, god bless america. >> let's bring in aaron now, who's got all the business news. where's that announcement from the ecb? >> any second any minute we hope the to get that announcement. let me explain. hello there, yes, the european central bank is as we've been mentioning, expected to announce it will inject up to $1 trillion into the ailing euro zone economy. in seconds, in minutes, the ecb could purchase government bonds, tell tens of billions of euros, every single month, until the end of 2016 double the amount
i guess, that was previously expected. three major economies have carried out qe in recent years. and we know what it is. we've got the u.s. the uk and japan. let's take a look at how well all of that worked out. because in america, the federal reserve, they bought u.s. bonds, u.s. debt basically, worth $3.7 trillion. they've been doing that or have been doing that since twagt. the u.s. central bank said in november that it would end its program, was its targets for inflation and reducing unemployment were on track. they were on track to be met. so in the uk, it's estimated by some that about $570 billion worth of uk debt bonds were bought and it helped to increase the economic output as as much as 3%. now, japan, it started qe much earlier, back in 2001, and its cumulative scale is spend, basically, $1.7 trillion or so.
it's an attempt to deal of course, with japan, with its prolonged economic weakness. now, to start the effort japan currently, as you probably know is still in recession. let's go straight over to our europe business correspondent, nigel cassidy. we're biting our nails. what is going on? i hear it's delayed a little bit now? is that right? >> well that's right. the governor of the european central bank has just confirmed there's no change to interest rates. they stay at almost zero. no mention so far of the big thing we're waiting for. there were a few rumors on the financial markets, that it will be a 50 billion euros a month. that reported only 600 billion euro, no more and maybe a bit less than the market's been expecting, as you were saying and the cynical amongst us saying the ecb might not care
if that's in the public mind so it will have more shock and awe he wants to create. but there are so many unanswered questions about this which we have to wait for this news conference to find out. notably, a national bank is going to be made to shoulder the burden of those debts. that's the big question. and what about greece with those elections coming? will their debts be included in this? so your right within we're just biting our nails until we get this result. >> and nigel, of course we've been talking about this for a very long time. 2 1/2 years ago, mario draghi said he's ready to do whatever it takes, et cetera et cetera. but it doesn't come without the debate and the controversy, for example, the germans are not happy. they don't like this right? >> well they don't. a lot of people have said it's their memories of the 1920s and 30s, printing money, rampant inflation. but, of course we all know that inflation just wasn't an issue in europe at the moment but their real concern is that this
would kind of sponsor states particularly those troubled southern states. it would stop them reforming, and if they get this support, which could go on for considerable time that that kind of whole process of reforming labor markets, making economists more competitive, that that really wouldn't go on. there is a lot of sympathy for that in financial markets. and the markets say we need this drop they kind of can't have it both ways. and that will be the really interesting thing to find out at the news conference this afternoon. are the two germans, who could be outvoted, but have they managed to have their say. and will this money, however much comes into the market, will it come from the ecb or make them responsible for it with all the implications of europe not having that solidarity that this system is supposed to have.
>> i know you'll keep across it. nigel cassidy joining us live from brussels. well jpmorgan's asset management chief market strategist joins us from wonderful davos. stephanie, great to see you. so the germans may not like this, but do you think, does europe need a program of the scale that we're hearing? >> well do you think that of course, with the easing of the kind of scale we're hearing or possibly, as you suggested, rather than more than that or at least a bit sort of unconstrained in the end on how much money is involved. do you think that's going to solve all the problems of the euro zone. i don't think anyone inside the governing counsel or outside the ecb think that's the case. but do you think that the ecb do need to do something to confront what we actually see now, which is falling prices and inflation expectations in the market which
suggests that the ecb won't get close to its market in the next five years. the answer to that is yes, they did have to act. mario draghi started laying a path to that last summer and we've seen the impacts of that in the fall of the exchange rate. and it's quite a high-risk moment for the ecb, especially having expectations around this meeting so high. you suggested earlier that maybe they're trying to do a bit of gaming of the system so we can still have a positive supply today. but i would say the most important thing is probably not details of exactly how this scheme works. the important thing will be do we come away thinking yes, the ecb, this institution in a funny, you know, with a single currency, but lots of different countries, this unusual setup, is still able to do its job, able to pursue its inflation target. that's going to be the important question. >> it is. and stephanie, while i got you, can you help us break it down. for our viewers around the
world, could you break it down? can you explain how this qe works? what's the idea of it? the fundamentals. how does it get down into the economy? >> well the sort of basics as we saw it first play out in the uk and the u.s. at the distinction of the financial crisis, 2008/2009, is you've got a central bank that's already cut interest rates as far as it can go. so what else can they do to try to make money out in the market cheaper, push down borrowing costs, encourage growth in the economy? well, you can just print money, so they print a lot of money, use it to buy government bonds. that's supposed to push down interest rates, supposed to make people feel more confident about borrowing again. also hopefully, make people feel that inflation is going to be a bit higher in the future, so they don't have to worry about deflation. now, the environment back then in 2008 and '09 is pretty different than it is in the euro zone now. and you can say the bank of england and the u.s. had what you'd call fist mover advances. they moved quite quickly with
quantitative easing. i don't think you can accuse the ecb of moving quickly to the point we've reached today. but it if improves confidence and improve the currency and help push up inflation a little bit at the margins, if we've also got some good news for the european economy in the form of cheaper oil for consumers and maybe credit getting a bit easier, well it can be part of an environment that's more positive for the european economy, even if it isn't, you know, by itself the game changer. >> and just briefly, with all this cheap money, if it happens, all this cheap money flowing around, is there a concern that it could create a bubble if europe? >> well, i think we've seen the european assets not do very well in the last six months to a year, at least in global terms. so i don't think at the moment there's a fear about that but, you know, certainly in the u.s. the fact that central banks are still so reliant on this very
loose monetary policy you do worry about the long-term consequences of that and whether you are building up some imbalances in the system. the question is is there an alternative to that the in the current environment? >> okay stephanie, lovely to see you. enjoy davos. we'll talk to you soon. thank you. stephanie flanders joining us there. okay, so we are going to obviously be across this when that announcement comes out in we're expecting now, 35 minutes. that's what the usual preference. follow on twitter @bbc. that's it. >> aaron, thanks. see you soon. a drone used to smuggle illegal drugs has crashed into a supermarket car park in mexico. police in tijuana, that's on the border, say just under three key lows of methamphetamine were found taped to a remote controlled aircraft. they're investigating whether the flight originated and who was controlling it. but it appeared to be heading for california. a quite reminder of our top stories for you.
in ukraine civilians at a bus stop in donetsk have become the latest victims of fighting between dozens of forces and pro-russian rebels. we're hearing at least eight people were killed in the shells, but not clear which side was responsible. thanks for being with us here on "gmt." "impact" is next. ♪ the adventures you've been imagining. the heroes you've been admiring. the worlds you've been dreaming of. ♪ the thrills you've been craving. the moments you've been missing. the vacation you've been looking for is here. come and take it. universal orlando resort. experience it all with the wizarding world of harry potter vacation package. visit universalorlando.com you want an advanced degree, but sometimes work can get in the way. now capella university offers flexpath, a revolutionary new program that allows you to earn a degree at your pace and graduate at the speed of you. flexpath from capella university.
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