greece passes next year's budget. it is packed with tax increases and spending cuts which are required to secure bailout funds. the budget cuts, the deficit pushes the deficit to 5.24 gdp, down from 9%. ahead of the u.s. 2012 election campaign, u.s. president barack obama says the middle class needs to step up to the plate. he called for more taxes on the wealthy. those are the top stories from cnn, i'm monita rajpal. "world business today" starts right now. hello and welcome to your wednesday edition of "world business today." i'm andrew stevens in hong kong. i'm nina dos santos in london. these are the top stories today. adding more fire power to the bailout fund. anticipation builds for lasting -- in europe ahead of the crucial summit. >> india shelves plans to open up its supermarket sector. and the immaculate rejection, ebay auction for a date with the virgin mary. this very wednesday word is out that they're ready to use all they can to add to their arsenal in the brand new form of perhaps a new fund. stock markets right around the world are armed with quite a bit more confidence this wednesday and much more confidence indeed, andrew, than there were at this time yesterday. >> yes, certainly that's true, isn't it? the ratings agencies, nina, haven't yet pulled out the big guns on the existing esff. on tuesday, standard "a" poors fired a warning shot as doubts over the individual euro zone government debt raised the collective bailout fund has already been put on credit watch. we've heard repeatedly that more firepower is needed and the u.s. reportedly is ready to bring out the bazooka. wednesday's financial times reports that leaders have a three-pronged plan of attack. now, the current efsf is valued at $440 billion and that will keep on running and may in fact be topped up. if you look at what happens then, in july -- eventually. in july 201, which is ahead of schedule, more funds will be made available in a separate facility called the european stability mechanism. it's intended to improve europe's reputation with the ratings agencies. finally, if you go over here -- this thing is not liking my work today. i'm going to give up on that one. this is a picture of christine lagarde there. christine lagarde said on monday that the current euro zone progress was insufficient and it could, if all goes well, be given the ammunition she does need to kill the crisis. speaking of killing, i wouldn't mind getting rid of this machine. >> seems as those you're not the only one having the trouble with the bazooka. they've been having a trouble for a year or so now. plans to tackle the crisis and more plans emerge. we're talking about a leaked memo from the eu council president. he says that the european commission, effectively, the executive arm of the european union, could get exceptional powers to deal with nations who have been bailed out in the past. and that could mean even approving the austerity measures perhaps in advance of them and putting forward on voting budgets on a domestic level. there could be penalties for those who fail to meet deficit targets. they could be, for instance, losing their voting rights according to this particular memo. still, the concept of shared responsibility goes further. i'll just remind you, remember how angela merkel crushed the idea of pooling the euro zone debt in the short term? according to this same memo, so-called jointly issued eurobonds could still be a long-term possibility. ultimately this signals, perhaps, some say, a major rift of control in brussels and the proposals offer the strongest hint of a powerful fiscal union that could involve pooling all of that debt, andrew? >> certainly does. just looking at what he's saying there, is there rifts going on within the eu at this very, very late stage? >> well, what we're seeing is one summit moves into the next, andrew. we have people like france and germany, the two biggest economies in the euro zone coming out with their own plans. some of the plans don't see eye to eye. this gives you an idea of how many figures we have micking decisions and how their proposals vary significantly. we have timothy geithner arriving in paris and various comments from david cameron, the uk prime minister on the sidelines. all of that certainly won't help. we have nicolas sarkozy and angela merkel writing to van rumpoi today. it's likely they may have to settle with just 17 instead of 27. >> this is the interesting point, isn't it? who is going to sign off on this exactly? all this progress as you say, nina, in europe comes with that caveat. it's all 27 members of the european union that need to make the change. david cameron is prepared to block any reform that doesn't protect uk interests. >> the most important british interest right now is to sort out the problem in the euro zone that is having the chilling effect on our economy that i've spoken about. now, that obviously means euro zone countries doing more together and if they choose to use the european treaty to do that, then obviously there will be british safeguards and british interests that i will want to insist on. i won't sign a treaty that doesn't have those safeguards in it. >> david cameron, it is worth noting that euro zone leaders have vowed to press for change with or without new treaty reform. eu rift wouldn't look good in a region trying hard to heal old wounds. let's take a look at the markets and how they're faring, particularly in light of what the "financial times" have been reporting on that in particular, that bazooka. the cac current in paris. confidence seems to be returning albeit tentatively in today's session to these markets. on the back of news perhaps we could see more firepower going into solving the euro zone debt crisis. all eyes will be on the summit in brussels. the ftse, also not doing too bad on the back of david cameron's comments. >> across asia, take a look at some of the numbers here. japan up by 1.7%. hong kong up by 1.6%. so those two, the best performers. in japan, it was mainly the exporters, toyota up 2.3%, sony up by more than 5%. this, of course, is based on renewed optimism that the european crisis will actually be sorted out. we could return to growth sooner rather than later. at least that's the hope at the moment. it's obviously very volatile based on what's happened in the euro zone over the past 18 months or so. in hong kong, the s&p up by 0.75%. bhp billitin up by almost 1%. shanghai, a rare green arrow for shanghai, property stocks helping to move the market higher as hopes are pinned on the fact that authorities will take more moves to ease the restrictive measures which are now in place in shanghai, in fact right across the country on property. nina? let's take a check in on how the united states trading patent fared yesterday. wall street it seems, rolled out a choppy session on tuesday, largely shrugging off news that ratings agency standard & poors could be considering downgrading the euro zone's bailout funds. u.s. investors remain cautious ahead of that crucial european debt summit. we saw the dow jones industrial average adding nearly 0.5%. nasdaq following by 0.25% and the broader s&p 500 showing small gains but pretty muted on the whole, andrew. >> that was yesterday. what does it look like today? the opening bell is a few hours from now. stocks are set to open higher when trading does indeed begin. that's what it looks like at the moment. the broad s&p up by almost a full percent to get the wednesday session under way. nina? >> andrew, friday is the eu summit in brussels may be the meeting that matters the most for the euro zone. there has, it seems, been no shortage of meetings to the buildup in this finale. adding to this is the u.s. secretary timothy geithner. he will be holding talks on friday. there we have it. we have a picture of him, timothy geithner there who you'll recognize as the u.s. treasury secretary. let's go over to jim bitterman who joins us live from paris to talk about what could be on the agenda and the significance of this particular meeting. i had, jim. >> reporter: i had there, nina. mr. geithner will arrive to a blustery day here in paris. it may be blustery in a lot of ways. the fact is mr. geithner's visit is like a two-pronged wakeup kaup for european leaders. the warning about downgrading the euro zone credit ratings along with mr. geithner coming here to europe is just emphasizing the importance of this european summit that's coming up in a day. we're looking to see mr. geithner come through, perhaps, saying what he said yesterday in germany which was fairly positive in tone, at least in the public remarks saying he was behind the reform efforts that are being made in italy and greece and spain. and that he was hopeful about this, what's now being called the fiscal compact that germany and france are talking about. closer political relations between the two. by the way you were talking with andrew a little bit about the reform of the eu treaty. we got last night here, kind of an indication of the timing the political leaders are talking about. the prime minister of france said last night they're hoping in france anyway, to have a revision of the european treaty done by march of 2012. this would be apart from the kind of agreement they're talking about for the euro zone members which might help them out with the financial markets a little bit. nina? >> interesting developments, jim bitterman, on the story there in paris. many thanks for that. andrew? nina, what greece as we know is the first euro zone country to hold out the begging ball. on tuesday athens took a step forward getting its house in order by approving its 2012 budgets. as new prime minister lucas it's projected to be down to 5.4% next year and the economy is expected to shrink. at least it's better than this year's forecast, contraction this year of 5.5%. in australia, the australian economy growing faster than expected in the third quarter to september. you can see the breakdown here is starting back in the fourth quarter of last year. and now we have 1% growth in the third quarter. the australian bureau of statistics saying gdp is looking healthy at the moment, that 1%. it compares to estimates of around 0.8% increase. strong investments in the mining sector feeling that better-than-expected growth. second quarter was revised up. it was stronger than expected coming at 1.4. nina? >> andrew, we have another finance minister in the wall behind me. this is the australian treasure, wayne swann. he's been saying the latest set of growth figures are a major success for the company but there is a little bit of room for improvement. take a listen. >> not all sectors of our economy are doing as well as we would like. we can also see this in some of the figures reflected today. i think today's economic score card does send a powerful message of confidence to the world. >> australia had the fourth strongest set of third quarter growth figures among any of the world's industrialized countries and that's behind china, the united states and also japan. up next here on "world business today," an embarrassing government backtrack after a retail uproar in india. we'll be live in mumbai with the latest. and you now understand what nature's been hiding. ♪ at dow we understand the difference between innovation and invention. invention is important. it's the beginning. it's the spark. but innovation is where we actually create value for dow, for society, and for the world. ♪ at dow, we're constantly searching for how to use our fundamental knowledge of chemistry to solve these difficult problems. science is definitive. there is a right answer out there. 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>> reporter: there was a lot of anger on the street when you spoke to people who supported the small shops, when you spoke to the people who owned or worked for small shops. they were the people really upset about this government decision to open up the retail sector to foreign investment. they feared this would mean the small shops would stop down and hundreds of thousands of people would lose their jobs. there was a lot of anger on the streets. but the government purely underestimated how much anger there would be amongst the political parties. i don't think for a moment the ruling congress party realized just how much the opposition parties would fight this, saying that they were representing the common man and clearly the government did not ever imagine its own allies. it is a coalition government. they did not anticipate -- own allies saying wait a minute. when the government lost support from its own allies to are this move and the opposition was so against it, it buckled under pressure and it's done a -- [ broken audio ] saying we will go ahead with opening up in retail sector. now he's done a u-turn and the government is saying we're going to put this on hold until we can get everyone on board. it doesn't look very good for the government and the prime minister at all, andrew. >> malika, thank you for that. apologies about the quality there of that transmission. nina? and still to come on "world business today," standard & poors chastised and ultimately downgraded the united states over that debt ceiling gridlock back in summer. and now this very institution is threatening to do the same with europe. we'll talk to the man at the top and ask whether it's too little too late. neutrogena® t/gel shampoo defeats dandruff after just one use. t/gel shampoo. it works. neutrogena®. the financial future of europe hangs in the balance. standard & poors says there's a 50/50 chance that euro zone nations including those with the coveted aaa rating are heading for a downgrade within three month's time. all of this week, leaders are frantically trying to thrash out some kind of a deal. eu economic affairs commissioner, this man behind me, said last week there were now just ten days left to save the euro. that was seven days ago from now. >> we are now entering the critical period of ten days to complete and conclude the crisis with the european union. >> for a long time, the future of the euro zone appeared to lay in the hands of its leaders. then standard & poors first issued a 15-nation downgrade warning on monday and then the new alert on possible downgrade of the euro zone bailout fund. we spoke to s&p's managing director john chambers. >> we need to see as president of the ecb, draghi said a new fiscal compact, something that will indicate we're moving closer to a fiscal union, i think, something that will mutualize not only some of the obligations at the euro area level and also some of the revenues. that in turn would let the ecb take a more pro-active stance in its security markets purchases. >> are you confident that the euro leaders will be able to come together and effectively make some kind of a fiscal pact like this? we saw angela merkel, the german chancellor and president sarkozy from france did come together and come up with something. is that enough? >> we have to see what the details are and what the market reaction is to it. i am hopeful but i wouldn't say i'm confident. >> what about the possible downgrade of the esfs? some governments are concerned if that happens, that will make a situation even worse. >> the rating of the efsf rests on the ratings of its aaa garner it. if it loses it's ga-- >> what about some of the criticisms of the credit ratings agencies that all of this is too late, you're not ahead of the curve enough? >> we get criticisms that we're too late. we get criticisms that we're too early. ify if they're balanced, you can think we're probably pretty much all right. we have 20 ratings that go from aaa to d. we try to indicate incremental steps along the way. nobody thinks that the euro area is on the verge of default. all of these ratings are still investment grade. but we do think the systemic risks which apply to them all have risen. >> let's take a best case scenario, perhaps we get a coordinated statement out of the eu summit at the end of the week. what will you need to see implemented in weeks and months to come? >> after the summit we'll have to see what legislative steps have to be taken. we'll have to come to a judgment whether or not they will be taken. we'll have to see what measures are in store not only for the government bond markets but also for the banks which have a very high refunding requirement in the first quarter and which will be themselves creating systemic pressure on the balance of payments of most of the euro zone area countries. >> s&p mark chambers talking to felicia taylor. it's been a bumpy few weeks at olympus after revelations of a billion dollar cover-up, resignations and now possible criminal charges. stay tuned. 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