he travels to italy to make the transition himself. it has now been met. unesco is gaining a new member but losing $60 million. the u.s. is withdrawing its pledge after the u.n. agency accepted a palestinian bid for full member. the u.s. and israel argued that the move would harm peace talks. i'm monita rajpal. "world business today" starts right now. -- captions by vitac -- www.vitac.com good morning from cnn lan. i'm charles hodson. tuesday, the first of november. the greek bailout is now in the hands of the greek people at great risk to the euro-zone debt. mf global is forced to declare bankruptcy protection. weakness in europe and the united states spreads to china, slowing down the factories pow iring the world's second largest economy. well, a new trading day has just begun in europe. we're expecting and getting losses, but we'll have prices in a moment as soon as they're reasonable. they've slipped for the second day in in a row following the u.s. market slide on monday's trading. japan and australia failed to bring any support. our business analyst has more. hi, remy. >> hi, charles. firsts let's turn to china. official data released yesterday shows china's pmi came in at 50.4 for china. this new growth is near a three-year low. sluggish demand pulled down production and export orders there. also today, the reserve bank of australia cut its benchmark interest rate, the cash rate from 4.75% to 4.5%. this is the central bank's first easing in 2.5 years. some of the banks match that rate to home commerce. new data shows that home prices fell for a third great courter. now, the r.b.'s governor said the rate cut would still economic growth but we didn't see any support on the asx today. it closed down by 1.5%. in reaction to china's pmi, the hang seng ended lower by about 2.5% while the shanghai composite ended flat. the hang seng was the biggest loser of the day following all of the major indices. slower manufacturing in china means less of a need for transport as well as china. finally the nikkei fell 1.7% here. it fell with sony and panasonic pulling down the index. let me bring this up right here. sony, for example, fell more than 6% as it expects to book another quarterly loss when it reports results on monday. a similar story on panasonic. they were down more than 5%. that was after it said it will post a net loss of about $5.5 billion for the fiscal year march 2012. that loss turns out to be its biggest in a decade. that's also due to massive restructuring costs in tvs and construction business that we've been talking about in the last few months as well as its tv sales. ramy, thank you so much. i say we get back to european stock markets. get ready for this. here's where they stand at the moment. goodness me, up by 2% in the case of the smi and the london ft ftse. but here's we are. it gets worse. 3.25% for the losses for the dax. in terms of the overall picture as a result of the slowdown in china, china's factories grinding out their goods more slowly. there's less demand for cars. minus on the banks because of the big uncertainties about greece and the deal that was put together about ten days ago. let's move on to the currency markets. holding on to 78.1100 that follows the intervention on monday. a bit of weakness there. relatively steady, but i think we are seeing a lot of readjustment now of what's going on, which is this greek referendum. and just to give you a bit of detail on that, the prime minister has an unexpected move that's, of course, raising uncertainty, greek voters will decide in a greek referendum whether greece will accept the deal for a second bailout worth $187 billion, the one that they agreed on. many are angered over the austerity measuring in order to get past ilts first euro-zone bailout. the second one will require more in the wife budget cuts, so it's hardly clear whether they will approve. our journalist joins us now from athens. tell us about this announcement, linda. what seems to be the prime minister's motivation? well, the prime minister realizes he doesn't have the measures of the bailout overseas. about three in five greeks overall not supporting the new bailout. there has been unrest since the decision was made with protesters disrupting events including a large annual parade just after the eu summit when the new deal was announced. on top of that, the unions are threatening to carry on with further mobilizations, fearing more austerity as a result of the new deal. so it's becoming increasingly harder for the government to see a way of implementing the measures unless it has some popular support. people here see this as a short-term solution with no plans for growth and no potential in the long run. so what they think is that they're just going to end up paying more once the money dries out. >> the risks, though, elinda seem to be absolutely enormous, both for the prime minister and the government on the one hand. because if they lose, he's toast presumably in terms of greek history. on the other hand there's worsening worry for europe. it will be disastrous if greece rejects this and more disastrous as a whole. >> now for the euro-zone they have a whole bunch of new questions that have come up only days after they thought they had a deal. but as it is, papandreou does not have the guarantee that the ref rehn dem will be to proceed with a new bailout program. so certainly not under the current conditions. are we looking at renegotiations, greek's potential exit from the euro-zone and what that would mean for europe and grease indeed. it just introduces a knew period of instability just when we thought things were getting more stable. as you said for papandreou himself, the political risk is great. at this point he's facing a maple break. if the referendum is no, he'd have to resign, which would take grease into an early election. >> i suppose what has to be said to this is it will focus greek's mind on what has been offered, having half of their enormous debt forgiven in effect. give me an assessment how good the debate has been. to what extent have the greeks been put in a situation where they can grasp it, the importance and significance of what's being offered to them? has it been a good debate? >> well, it's been a very long debate. the debate has been going on for effectively months now, but people are not convinced. the debate has been good, be what politicians have not been able to convince the people is how greece is going get out of this debt spiral without more money being pumped in and without any growth. greece will not be able to get out. if that can change, politicians can guarantee some long-term stability there's still a chance the greeks might support the current government. >> very briefly, elinda, i hear the finance minister is in hospital. is that of worry? >> no, it doesn't appear to be serious. he's in hospital with some stomach pains we've been told through the finance ministry, and he's expected to come out later today. so not a serious reason for concern it seems. >> okay. that's one tiny relief for the markets anyway. elinda labropoulou from athens. meanwhile they continue to scrutinize the euro debt deal. we saw a big selloff on wall street on monday. the dow lost 276 points or nearly 2 1/3% going down below 12,000. nasdaq down 1.93%. dow down 2.26%. on monday the dow rallied almost 10% in the month of october. both the nasdaq and the s&p surged about 11% for the month. well, that's all going to go because u.s. markets do look set for losses at the open when wall street trading begins in just a few hours time. here is where u.s. futures stand in the premarket action, off by 1% or more. and it wouldn't surprise me if we actually saw steeper losses in there if we saw the selloffs going on in europe actually continuing here. coming up here on "world business today." a former goldman sachs chief and lee man brours. we'll look at how they've become part of euro's poisonous debt crisis. stay with cnn. where there's magic. 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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number of worrying questions. for more on that let's go to felicia taylor. >> the broker dealers we're talking about worked at mf global. it will mark the eighth largest bankruptcy in the u.s. mf global was run by john core zye. he was a former ceo of goldman sachs. it had $41 billion but this morning shares were extended on the new york stock kpanch and they were told to suspend any further trades and soon after it provided for bankruptcy protection. the shares plummeted in recent days, off by 85% this year alone. the reason behind the collapse is, of coursing, the european debt probable. in the last set of results it revealed more than $6.25 billion. that was at the suggestion of john corzai. among countries involved, portugal, italy and spain. investors who knew were naturally watching closely. many saw the company as sort of a bellwether for how well an american company could withstand the pressures created by the crisis in europe. that question has been answered and obviously the answer suspect a pretty one. the new question is how big is the fallout going to be. comparisons are drawn to lehman brothers' fall in 2008. two companies alone have a combined $2 billion loss. deutsche bank and jpmorgan. jpmorgan told reuters that their loss is only a small fraction of that number. that's one reason it may not have the effect that lehman did. they had several times more assets also when it went bankrupt than mf global but this is certainly the sharpest side yet that the threat of contagion from europe is very real, very powerful. felicia taylor there. you're watching "world business today." as clouds gather once again over the economies of europe, they're bracing themselves for a bruising. we'll have that story next. if you've just signed up for medicare or will soon, there's no time like the present to consider all your health insurance options. does medicare alone meet your needs? would additional coverage be better for you? well, now is a good time to take a look 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economy as fred pleitgen repo reports. >> reporter: even in these uncertain times business is booming. this mid-size company in berlin provides printers and office software but the owner tells me even though his firm is growing, he's concerned. >> translator: we have good plaining, our budget is good, and we have lots of orders, he says. but it's impossible to say how things will be in a year because we don't know what will happen with the european economy. >> reporter: one thing he's doing is increasing his firm's capital industry. if you have a good capital stock, the banks look at you differently. you have a better rating and it's possible to get loans each when institutes are reluctant to lend. germany is a powerhouse and the second in export of goods. small and medium-sized businesses are the motor and backbone of the economy. and now that european banks face uncertainty because of the euro-zone bailout, once again they seem well prepares as most companies have been increasing their capital stock consistently for years says this gentleman of the union of german union savings banks. right now the barjs have a capital stock of about 18%, he says. that is an absolute record. it shows that even in difficult times companies have been building their equity capital. but, of course, a strong capital stock alone does not guarantee a company will survive the harsh economic times. this man says for a company like his, every day is a battle to stay ahead of the game. fred pleitgen, cnn, berlin. singapore airlines has launched its new international budget carrier. the airline called scoot will begin operating medium flights begins in 2012. routes include trips to china and australia. and will increase to africa and the middle east in the next five years. singapore airline stocks was down about 3%. meanwhile they say all of its flights are now operating on time. this, of course, follows three days of delays and cancellations. and it was good for qantas on the stock market as well. that i finished up 1.1% at about 1.60 and a little bit of change. now, it's known as the race that stops the nation. australia's richest sporting event, the melbourne cup, took place at the remington race course on tuesday. the prize money, almost $6.5 million. dunaden was the first place finish. he had never seen the track before. not a bad day at the office for him. let's take another look at the stock managements if we can bear it for him. losses at about 2% and 3% to more. we're looking at 3.5% apiece for both frankfort and the paris cac 40. let's have a look at asia marks. for the most part they closed, slipped for the second day in a row. weak reading on the industry. china is clearly repressing things. it was the shanghai composite that gained a lot by a fax of a percent. but in hong kong the hang seng took it on the nose. again, off by 2.5%. clearly more links to what's going on in europe. off by 1.7% for the nikkei and the australian s&p asx 200. commodities being sold off at the moment by the fact that qantas was gaining in that falling market. >> that's it for this edition of "world business today." now an in-depth interview with the former european central bang jean-claude trichet. stick around for that. you're watching cnn. i'm zain verjee at cnn london. here are the top stories right now. nato has ended its aerial mission in libya, and its secretary-general traveled to tripoli to make the announcement himself. he said the alliance's goal was to protect civilians and forces has now been met. the u.s. is withdrawing its pledge for the u.n. agency accepted a palestinian bid for full membershipship. they said the move would harm peace talks. the prime minister has offered. the austerity measures that europe has changed have angered many greeks and it's not clear the voters want to accept the deal. those are the top stories. i'm zain verjee. the interview with jean-claude trichet is next. are you ready for retirement? >> i'm not sure. >> hello and welcome. i'm richard quest. outside, the european central bank. on the day that jean-claude trichet retires as president of the ec bank. over the next half hour we'll look back at president trichet's legacy which can neatly be divided into two periods of time, before the crisis and what happened after it began. saddam hussein is captured, concord make its last flight, the year is 2003 and jean-claude trichet has taken up his post as head of the european central bank. it was all quiet on the financial front. the new chief, meanwhile, had a date to follow, which he has stuck throughout. maintaining price stability, keeping inflation at bay. >> they've decided to leave the key ecb rates unchanged. >> for several year this policy worked. then the unexpected happened. inflation seemed to be on the rise. interest rates had to go up. in the midst of an emerging crisis on wall street, mid-2008 to be exact. trichet again raises interest rates by a quarter percent. inflation had surged, oil prices hit an all-time high. >> the u.s. is influencing europe and the rest of the world. i would say we have a baseline which is ongoing with risks on the downside. >> what happened after this is history. lehman brothers collapsed and three months later trichet reversed the rise and more. by 2009, seven rate cuts in eight months had taken interest rates to a record low of 1%. by then, the u.s. crisis across the atlantic and concerns had spread to government debt. suddenly greece was the country in the spotlight, asking for $140 billion loan from the euro-zone. >> what is important in our view is that recognition that greecing is in an absolutely exceptional situation and for that reason it requires exceptional solutions. >> there was nothing unique about the problems in greece. ireland and portugal were next in the bailout buy. >> improving confidence is really of the essence. >> growth had returned, and now the worry was rising prices. trichet's mandate, a fixation with 2% inflation was once again at stake. so for the first time in three years and to the surprise of many, the ecb raised rates. >> the government has decided to increase the interest rates by 25 business points. >> it was a decision economists believed exacerbated a crisis, a charge that sparked this furious outburst. >> we have repressed the ability over the first 12 years and 13 years of the euro. impeccably, impeccably. >> eight years on as trichet's leaving the job, in frankfort leaders lined up to say good-bye. >> for everything you have done, also for everything you will do for the great cause of european integration, i say to you. >> as he passes the symbolic ecb bell to his success elf mario draghi, trichet had a final thought on his years in office. >> whatever the future holds, you can be sure that the ecb council will continue to be faithful to its primary mandate and that the ecb, together with the euro system or the monitoring team of europe will continue to be an anchor of stability and confidence. >> jean-claude trichet as you come to the end of a distinguish ed period, there must be many thoughts and moments. what first comes to mind as you look back at the last eight years. >> >> well, the first days, of course, when you realize you're called to lead a team which is responsible for issuing currency for several hundred billion people. he at the moment i'm speaking for 313 million people, 17 countries. so it's an immense responsibility, an immense weight on your shoulders. even when you are in normal times, of course. >> quite soon after you start and there is a tightening cycle that begins, you obviously at that point felt it was time to put the brakes on. >> we were heavily criticized. why the hell are you increasing rates, 10 months out of 12 in europe. we decide by the imf and understo underground that it was too early. >> we end up in august, 2007, a credit skreequeeze. at what point did you realize that this was no ordinary crisis? >> i think that we prepared ourselves to something which could be very, very challenge and that we had to prepare for a correction. from the very first day, we judge that it was something which had never happened, even when we had not yet had lehman brothers, not yet all the tsunami, which was triggered by those successive events. even on the -- observing our money market we could see it was something which was profoundly abnormal. >> during the crisis, was there ever a moment when you felt it was going out of control and would not be able to be controlled? >> i think it was permanently, particularly at the moment when it was most acute, of course, the challenge to be sure, as sure as possible that we were ahead of the curve and behind the curve. >> while president trichet made the decisions, francisco pop pan delay owe was responsible for executing them. >> you would do anything that you only read about and studied in textbooks potentially. >> we had been doing things that had been in all textbooks. i think textbooks have been written now to incorporate what we have done. so in a way we had to invent new thing things. >> when you're clear in your charter territory, and we had to see exactly what was necessary to, again, for us, restore a better consummation of our monetary policy. it was necessary to stand ready for it. >> let's take the euro as an epty, set up in the 90s. you were there since its creation. did you realize then that this concept, this thing was being set up badly, that it was a ticking time bomb? >> certainly not because we were ourselves extremely determined to have a solid framework. and the working assumption was that we have a steady growth off that. i have to say introduced myself as a representative of my own government the idea that the 3% limit, not be overpassed, was entirely part of the eau. i said myself, i would have said a hundred times, we have no -- what do you call -- federation, we have no federal budget, therefore we need the strong fiscal framework. >> but at what point in the last ten years did you realize this was going badly wrong? i would say it was at the moment when in an envelopment of overwhelmingly dominant, benign any fwlekt on fiscal policies. >> overspending by governments basically. >> no. neglect by all. the market. it made no difference between good behavior and bad barchlt greece and germany had the same interest rates. you had exactly the same be nine a neglect come in from the economies. the mainstream economies come in. we're considering that it was too much -- too tight. we had the major companies calling for multipling it back to them. >> and you were worried. >> and we were worrying. we went extremely vocal to say it is not acceptable. we are a economic and monetary union. >> coming up after the break, i cross the square from the ecb to the headquarters of deutsche bank to talk to their chief economist and hear about trichet's tenure. welcome back to our special coverage of jean-claude trichet and his potential retirement from the ecb. we want to know their view of the bank and its president. you occupy the money, we occupy the world, they say. they've camped out here for several days. for a more dispassionate view of mr. trichet and the bank i'm going to talk to the chief economist of deutsche bank. as a president of the ecb, how do you think he's done? well, if you rate him on his performance criteria, then you can say that he has done an impeccable job because inflation was exactly on target through his 18-year tenure. >> was it enough to have an impeccable performance on his performance. >> no, it was not. it was a very challenging time. perhaps the first few years, i think, one would have considered it to be enough, to have adjusted very well, to set inflai inflation performance. toward the end, the last two years, i think other challenges came up. >> does he bear some criticism for failing to foresee the great financial recession of 2008, 2009. >> to be fair, he continuously admonished governments to take their fiscal responsibility seriously. at every press conference there was a statement that fiscal discipline was of utmost performance. in this regard i think he was right. he was also, i think, right in ending the period of very low interest rates that we had following the burst of the internet bubble earlier than others. that, you could say, put him in a better position when we charged the central bank's contribution to the inflation of the housing and credit bubble. so the ecb in this regard was a little more alert. >> what about the question he raised too far, too fast. >> you could question the 2008 rate hike. at the time i thought it was a mistake. they did it because they had a different assessment of the economy outlook, a different assessment of the debt of the financial rise. and then they had to correct in september. but to be fair, you know, we are not perfect forecasters, so everyone makes mistakes, but that certainly was a mistake. >> bearing in mind what trichet has had to deal with during his time, it's quite remarkable that, really, we are just arguing about relatively small things, aren't we? >> overall you could say that his tenure was a very successful one. he has proved himself as great european, very committed to the european projects. i think this will be the key features of his tell euro that will be be remembered in history. and there were some errors, but then who is not without any error. >> coming up after the break, the president shows me the nerve center at the ecb. we're in the market room. 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[ male announcer ] the same 117 elements do the fundamental work of chemistry. ♪ the difference, the one element that is the catalyst for innovation, the one element that changes everything is the human element. ♪ real, objective investing help? that's a little harder to find. but here's what i know -- td ameritrade doesn't manage mutual funds... or underwrite stocks and bonds. or even publish their own research. so, guidance from td ameritrade isn't about their priorities. it's about mine. straightforward guidance. that's what makes td ameritrade different. ♪ [ male announcer ] trade commission-free for 60 days. plus get up to $600 when you open an account. farewell, mr. president. the ecb staff magazine this month pays tribute to mr. trichet, but no sooner has one man gone, then it's hello to the new president, discreetly calming the storms. it zriems mario dag hi who takes over. from wall street to rome and now to the top of european economic. mario draghi's career has linked up to his predictable name, super mario. starting on tuesday he faces his biggest challenge to date running europe's central bank. born and educated in rome, mario draghi's held a string of top jobs, including at goldman sachs and the world bank. in 2005 he became governor of the bank of italy. managing inflation has been his goal. then by 2008 the crisis hit, the roles changed. now draghi was dealing with the banks. that became his top priority. >> we had two leading projects this year. one is the capital on one hand, and the other is we have to roll back the moral has zard that still prevails in the financial services industry. >> renowned as a savvy and likeable poll tish shann, draghi's knack for detail has won him friends and admirers. he believes his policies as the central bank of the italy helped prevent the country's banks from going under. >> no italian bank had any problem during the crisis. >> when the ecb job came up, draghi was by far the number one choice, and like his predecessor, we can expect a firm commitment to price stability. in other words, keeping inflation under control. >> no sovereign debt crisis, nor any persistent bank could ever make the ecb to detour from the price stability as an objective. >> draghi will have to face the critics who will claim he may be too favorable to his home country, which is at the moment in times of trouble. but he brings his own ideas to the table. draghi wants fewer partial or temporary solutions or fairly defined objectives. what's clearest of all is after trichet, he has a tough act to follow. jean-claude trichet is leaving at a time of heightened activity for the ecb. the market room is at the heart of the bank. here they monitor what's happening in the financial world. the room itself may be far less imposing than the work being done here, but it is the nerve center, and it seems a good time to bring up the challenges facing the new president mario draw drag draghi. >> we are pass the baton just like it was passed to me. i had to plunge intellectually. so it's the same. but what i have to say is that i quite often have been here to encourage the people that are here, to tell them that we are very much relying upon their own observations and their own action and show it. >> so we now have a situation where a deal has been done and you look to the future and you're very firm on your view that the further integration, whether it be a finance ministry, measure, whatever it is, what's your vision for what a further integration looks like? >> we have to do immediately the implementation of the new governments because we have already improved nit. we have proved the company vindicators inside the area. this has been decided by the parliament and the governments. it is the new legislation has to be applied very rigorously. >> but do you want a ministry? do you want a central ministry? >> now, let me say for tomorrow and the day after tomorrow, you have to, in my opinion, have a vision of what should be done. that is my own personal sentiment. it's not a sentiment necessarily of the institution. but my own sentiment is that we have to go further and, if necessary, a change of the treaty, to permit the governments of europe to avoid, to put -- because a particular country would not behave properly or refuse to behave properly, not at to apply a recommendation. one time, two times the recommendation. then we must have the capacity from the center to impose decisions. otherwise it puts into question the stability of the hole. there is no model for us. the united states is not a model because the history call wealth of each and every european country is not to be compared with what makes up the united states. but we have to go further. and i'm sure that we'll invent a new way of marrying, if i may, the respect for the sovereign states and their pride, and at the same time have appropriate union in order for what is their commonwealth, i would say, to be governed at the upper level. >> the mandate is price stability. it has guided you over eight years, and indeed you've now famously described as impeccable your implementation of price stability. so the question is that the right mandate? >> price stability is not only good per se because your democracies, your people are asking you for price stability, but it's also a necessary conditi condition, the best contribution you can offer to sustainable growth and jobs. >> finally the concept of moral hazard, has it gone oust the window? does it exist anymore? >> i would say certainly, yes, of course. the main lesson we can draw from the present crisis is that we should never let the financial system, and by way of consequence, the ratability to be that, because it is the fragility of the system which made the collapse of one institution capable of triggering the house of cards to fall down. so it is very important that we have a financial system which would be much more resilient and make any institution able to have major problems without triggering this, you know, sequence, the chain reaction. so this is work in progress. >> jean-claude trichet has been a unique central banker. he has frequently given press conferences and interviews and justified the policies and transparencies of the bank. while academics may debate for years the rights and wrongs of the way he handled the crisis, the consensus seems to be that jean-claude trichet and the bank, it's a job well done. and that's our report for tonight. i'm richard quest in frankfort. whatever you're up to in the hours ahead shlg i hope it's profitable. all the best. bye-bye.