081112-Europe Agrees On Stimulus

Europe Agrees On Stimulus

European leaders agree an economic recovery package to revive Europe's flagging economies.

Meeting in Brussels, Britain's Prime Minister Gordon Brown said it was "ambitious stimulus package" that would provide "a good platform to build on."

The global car industry has been one of the worst hit since the credit crisis began.

Manus Cranny from MF Global says we may see a much smaller car industry in 2009.

SOUNDBITE: Manus Cranny, MF Global Spreads, saying (English):

"I think there's root and branch change going to come in 2009 which is going to be a good thing in terms of efficiencies and actually facing up to some of the harsh realities in terms of what the consumers, and indeed the consumer market can actually bear next year. It may be we end up with a much diminished or reduced global car industry and there are some very substantial employment and deceleratory effects that will come with that."

Japan's Prime Minister Tara Aso, announced a stimulus package today, worth 251 billion dollars.

He said the U.S. financial crisis is starting to affect the Japanese real economic at a much faster rate than expected.

In the U.S, the senate failed to agree a 14 billion dollar bailout for Detroit's big three car makers.

The problem was getting Republican Senators to back the plan.

This sent the Yen to a 13-year high against the U.S. dollar and Asian stock markets tumbled.

The failure of any of America's big three carmakers would threaten countless jobs and send shock waves around the world.

SOUNDBITE: Manus Cranny, MF Global Spreads, saying (English):

"I personally don't see a situation where GM, Ford and Chrysler will be allowed to all fail all at the same time. I think there's been such a substantial bailout of Wall Street that the political, the social and economic political fallout, one million jobs and many many more attached to it. I cannot see that the Americans will allow these car companies to go to the wall."

The question now is which industry is next to need taxpayers money - and can they survive without it?

Hayley Platt Reuters