palestinians and one israeli soldier. gilad shall late is free after being held for five years. officials handed him over to the egyptian authorities a couple hours ago. egypt is expected to transfer shalit on to israeli custody. israel set free hundreds of palestinians held in its jails today, tuesday. a total of a thousand are expected to be released as part of this exchange in two groups. an initial group of 477 palestinian prisoners are going free on tuesday in exchange for sergeant major shalit. matthew chance is at the border crossing in gaza. he joins us live with the latest. presumably a sense of anticipation there, matthew. >> reporter: certainly is, charles. in fact, hundreds of people have gathered here at the checkpoints, all family members of the hundreds of prisoners about to be released into the gaza strip, who have come to welcome people who, frankly, they didn't expect to see again in many cases. some of the people that have been released by israel today in exchange for shalit have been serving multiple life sentences for murder, membership in illegal groups, things like that, sentenced to in some cases hundreds of years behind bars which they were never expecting to be freed from. gilad shalit when he was captured, he was also seen as a golden opportunity, a negotiating chip for hamas. it was just question of how many palestinians would be exchanged for him. that answer has come today. it's 1,027 palestinians. it's taken more than five years, charles. >> that is interesting, isn't it, that it's taken so long. is there a sense of frustration on the part of palestinians, particularly the relatives of those who have been held over that period, or do they understand, if you like, that hamas was perhaps holding on for the best deal? >> reporter: i haven't sensed that sense of frustration, but clearly it will exist amongst the palestinian families who still have, you know, many thousands of people still in israeli jails. i did sense that frustration on the other side in israel when i spoke to shalit's family. they were very concerned and have been for several years that the israeli government hasn't been doing enough to secure a deal on the palestinian side. i think people are generally happy that so many palestinian prisoners are being released, 1,27, it's a hugely favorable exchange rate in terms of prisoners. people are very happy about that. people are very mindful that there are still about 6,000 palestinians in israeli jails. this isn't the end of the story. they want them all released no matter how hideous the crimes some of them may have committed. >> it's remarkable the party atmosphere, looking at the background of your picture there, people greeting each other, kissing each other and clearly looking forward to what will happen. tell us what will happen where you are in the next few minutes or hours. what will happen to all these people as they arrive, matthew. >> reporter: if i can turn the camera around a minute, it might get a bit bumpy, i can show you some more dramatic scenes of celebration. you can see a lot of the family members are arriving into this area right now, waving hamas flags, that's the green flag there, being paraded through this crowd. more family members are arriving by bus as well to greet these palestinian prisoners. we've been expecting them for the past hour or so, across the border for the past hour or so. there's been some holdups, not quite clear what those are. any moment we're expecting the prisoners to come out of the gates over there which you hey be able to see and be welcomed by this enormous kind of official welcoming committee. it's nothing compared to the welcome they're likely to get in gaza city. for days there have been preparations under way for a mass and public parade. we're expecting hundreds of thousands to turn up later today to give the prisoners their official welcome to gaza. that will take place in perhaps several hours from now, charles. >> okay. matthew, thank you very much. joining us live from what is a lively seen at the crossing point. amazed no one has fallen over that guy rope next to you. this deal has been half a day in the making. one of the men at the heart of the negotiations has been the palestinian chief negotiator aracat. he told us earlier how important today is. >> i'm the chief negotiator, talking to israelis about prisoners and we could not convince them. now hamas managed to do this. today let's not go into this, let's stay on the high ground. it's a his tore day. let's feel with those families. i'm a father, i know the feeling of many, many fathers and mothers, many wives, many sisters. let's let this day go without any picky politics. it doesn't matter who did it. as a matter of fact, it's good those people are coming back to their families safe. family reuniontion. i talked to some of the parents, and i cannot describe to you what i heard, in terms of vocabulary. >> what did they say to you? >> in a few moments we'll speak to the israeli goex pan live. we'll stay throughout the hour. for now let's take a look at what's moving the stock markets today. we're an hour and seven minutes into the trading day here in europe. it's comments made by this particular man, the german finance minister, that are weighing on investor sentiment. he said on monday he doesn't expect a european council meeting set for this coming weekend to produce an ultimate solution to the current debt crisis. that pronouncement sent the stock markets south yesterday. they're carrying on in that way today. here is his statement really clearly, trying to manage expectations. the expectations have been managed and pretty much downwards. here is where we are in terms of the european stock markets right now, off by 1% for the london footsie, the dax at home in germany. paris, cac, one two-thirds percent. one reason for this relatively severe selloff in paris is the fact that moody's has warned it could slap a negative outlook on france's aaa debt rating. that is really quite serious. in asia, moving there, markets similarly hit by negative sentiment related to the european debt crisis. as you can see, the day ended with red arrows across the board after the german warning implicitly in effect the end to these final woes as far as the sov len debt crisis may be some way away. the hang seng in hong kong recorded the biggest fall, as you can see, off by 4.25%. nikkei steady by comparison, off by 1.5%. the main australian benchmark about 2%. contagion all the way from france to australia. in shang hang, the composite off by more than 2%. china's third quarter gdp came in below forecast, and some way down on the previous quarter. i imagine that is being felt by commodity stocks quoted in sydney. now, as far as that -- what some are presenting as a soft landing in terms of chinese growth, it comes after concerted efforts by the government in beijing to cool on the economy and reign in inflation. pauline choiu has the numbers. >> we're seeing the sign that china is beginning to feel the weight of global financial problems. china's economy grew 9.1 pfrs, but the slowest china has seen in nearly two years. you can see here china experienced a gradual slowdown as demand has weak ended for exports by simultaneously beijing tried to put the brakes on growth. the chinese government is afraid that if the economy expands too rapidly, that could propel inflation which reached a high this past july but moderated to 6.1% since september china pumped a ton of money into the economy since the crisis in 2009. the resulting inflation has led china to now backtrack and curb lending raising capital reserve limits for banks and making it more difficult for businesses to get finances. this squeezed out small and medium businesses. now many are concerned about how many of those loans have gone bad and what china's banks might be hiding. china's government has a difficult balancing act in trying to slowdown its own growth without alarming the rest of the world which depends on china's appetite for resources and products. pauline choiu, cnn, hong kong. let's move to the united states where wall street had a grim start to the week on monday as worries about the european debt crisis returned to spook the market. major indices tumbled 2% dragged down by regional manufacturing data. the empire state manufacturing index fell for a fifth straight month in october. so here are the closing stock market numbers for monday, basically off by 2% pretty well across the board with the blue chips of the dow 30 being hid marginally harder than the tech stocks or the booeder market and the s&p 50. in terms of where we are in pre market action, it looks very much as if the selling is set to continue, albeit not quite as sharply, off by about half a percent for the dow 30. tech stocks not being hit quite so hard, just marginally down, the s&p 500, the broader market, off by about .4%. we'll keep you up to date with the market action as well as the latest on the prisoner swap between israel and hamas. these are live pictures from the gaza side of the raffa border crossing. that bus will take some of the former prisoners held in israeli jails to their homes in the gaza strip if not on to east jerusalem and the west bank later on. more on that. stay with us. a day. i want healthy skin for life. 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supplement plans, you can keep your own doctor and hospital that accepts medicare, get help paying for what medicare doesn't... and save up to thousands of dollars. call this toll-free number now. . hamas has released the israeli army sergeant, sergeant major rather gilad shalit after five years. israel is releasing in exchange hundreds of palestinian prisoners, more than a thousand of them in total. mostly they'll be going to gaza in the west bank. it's an extraordinary exchange which called for hamas to surrender shalit and then for him to cross into egypt to meet an israeli representative. at that point israel was to release 477 palestinian prisoners setting off what one hamas leader called a palestinian national celebration. shalit was to cross into israel, get a quick medical examination and head to an air force base to meet his family and indeed the israeli prime minister. i want to show you how all of this is going to work. the first group of 477 palestinian prisoners have been heading from detention centers, but after the release, not all will be allowed to go home. 139 will be allowed back to their homes to the west bank in israel. 133 to gaza. one from jordan. some will be required to check in with police. as for the rest they will be, quote, relocated. 40 prisoners considered high risk are being deported overseas, another 164 could be sent to gaza or elsewhere. of those, fewer than 20 will be allowed to return after three year years: sergeant major shalit was expected to return on tuesday. he was to meet his parents and, as i mentioned, the israeli prime minister bing min netanyahu. for the latest on shalit's homecoming, we're joined by israeli government spokeswoman mark relev. where is shalit right now? >> we're only going to be talking about his whereabouts when he's safely back in israel after being held hostage for five years. it would be irresponsible for me to go into a play-by-play. there's an indicate and worked out process. when one stage is done, we move to the second stage. when that stage is done, we move to the third stage. that process is moving forward according to plan and hopefully gilad shalit will be back in israel shortly. >> clearly this choreography is practiced. but there is also kind of a set of scales here. in these scales, on the one hand you have sergeant major gilad shalit. on the other you have more than a thousand palestinian prisoners and some sitting in jail for serious offenses. do you think israelis accept the high price they've paid for the freedom of only one soldier? >> you raised a very legitimate question. i can only answer by telling you that my prime minister, benjamin netanyahu, said this was the most difficult decision he's taken so far in his administration. on one hand, you want to do what you can to bring home a young serviceman held hostage like this for more than five years. remember he was kidnapped when he was 19 years old. for the last 5 1/2 years he's been living in a dungeon, in a basement, solitary confinement, no visits by the red cross. of course, hamas did not allow anything like that. so a very real situation where we want to get him home. on the other hand, you cannot agree to hamas's demands where they wanted this wholesale release of terrorists and having people back on the streets who could kill more israelis. we think we've achieved in this arrangement -- and you talked before a moment ago about the restriction that is will be placed on released prisoners, that we are minimizing the risk to israeli citizens, minimizing the risks of terrorist attacks by these people. i hope we found here the right balance. it is a complex decision, a difficult decision. >> focusing on the people who will be released, the prisoners formerly held in israeli jails, it would seem that looking, analyzing the numbers there, i'm told it seems to favor hamas over the palestinian authority. are you in a sense aware that you may be handing a relative advantage to hamas over the palestinian authority? >> that is not our intention. our goal is to see the release of our young serviceman and bring him back to his family. it's clear hamas controls gaza, hamas controls the fate of gilad shalit. i wish we could have conducted these negotiations through the palestinian authority, but they don't control the gaza strip and we had no alternative but to do these negotiations. it wasn't done directly with hamas. it was first done through german intermediaries and over the last few months through the good offices of the egyptians. i'd like to take this opportunity to thank both and especially the egyptians who, over the last few weeks, their effort was instrumental in making this deal possible. >> thank you very much, israeli government spokesman. many thanks for explaining what's going on there. we'll take a break and "world business today" will continue. we'll tell you about that major exchange going on at the rafa border crossing point between egypt and the gaza strip and bringing you up to date with the business news. live pictures that you're looking at there from the region. the markets never stop moving. of course, neither do i. solution: td ameritrade mobile. i can enter trades. on the run. even futures and forex. complex options? done. the market shifts... i get an alert. thank you. live streaming audio. advanced charts. look at that. all right here. wherever "here" happens to be. mobile trading from td ameritrade. number one in online equity trades. trade commission-free for 30 days, plus get up to $500 when you open an account. . now the latest on today's prisoner exchange. israeli soldier gilad shalit is, according to israeli military media in israeli hands after being held by hamas for more than five years. palestinian officials handed him over to egyptian authorities earlier today. as far as we know, he's still in egypt. eej into is expected to transfer shalit to israeli custody. his release came after israeli began setting free hundreds of palestinians held in jails this morning. more than a thousand are expected to be released as part of this exchange. these pictures you're looking at show shalit in the act of being handed over on egyptian soil a short time ago. circling back, israel has exchanged prisoners with its neighbors several times before. overall, the country has released about 7,000 arab prisoners over the last 30 years. this in exchange for 19 living israelis and the bodies of eight soldiers. in 1985 three israeli soldiers held in lebanon were released, but only after israel freed 1150 prisoners. in june 1998 israel and the south lebanese army released 65 prisoners and the release of 70 hezbollah guerillas. in 2004 an israeli businessman was released along with the remains of three soldiers. in return israel freed 436 palestinian and lebanese prisoners. we're going to go straight over to kevin flower for the view from israel. kevin. >> charles, these photos, this video being released of gilad shalit, these are the first images we've seen of the israeli soldier for just about two years now. it was about two years ago that hamas released a proof-of-life video. that was the first time that images of gilad shalit had been seen. now two years later upon his release from the gaza strip into the hands of egyptian authorities, we're seeing the first pictures of him. these pictures, this video is going to come as a huge relief to his family members, his parents and to thousands of israelis who have been watching this story unfold very closely over the course of the past week. there are a lot of doubts and a lot of reservations about whether this deal would go through in the final hours because over the course of five years, negotiations for his release, for hess exchange have been close, but have a number of times fallen apart in the 11th hour. it appears this deal is going through. we do not know that shalit -- he's not on israeli soil yet as far as we know. the israeli government is not confirming that at this point. we do know he's in egypt, a big moment for his family and for israelis today, charles. >> indeed. let's concentrate on the figure of the israeli prime minister benjamin netanyahu. it was. >> reporter: striking. mark regev, the spokesman was saying a moment ago that netanyahu presented that this was the most difficult decision he had made as prime minister. is there a perception among israelis -- obviously there's a high price being paid, but is there also a perception that netanyahu has sold out, become a bit of a turn coat, that he's compromised with terror? >> well, he's certainly -- there's some people within his right wing coalition government who might make that acquisition, maybe not so bluntly, but would say that this is a victory for terrorism. of course, benjamin netanyahu is a prime minister who built his career, his reputation on tough talk when it comes to palestinians, fighting terrorism. he is at a number of different points during his career vehemently opposed similar deals like this that saw thousands of palestinian prisoners being exchanged for a small number of israelis. so it is definitely a rhetorical and ideological aboutface for this israeli prime minister to be making this decision now. what he has said publicly is that it was a difficult decision but it was, in fact, a realization of the changing geographic, the changing political climate in the region. he's argued that this is probably the best deal israeli could get for the release of shalit and maybe the only time that this window of opportunity was open. certainly those are the arguments he's put forward publicly. he will reap some political points for this certainly going forward. that must have been part of the calculation as well, charles. >> it seems to have been a deal which has been an exceptionally long time in the making, and just impressionistically, looking at the terms on which prisoner terms have taken place in the past, it does look as if the odds have gone very much in the favor of hamas and a long way against the israelis. why is it, do you suppose, that at the moment hamas is able to exact such a high price for one israeli soldier? >> well, i think a lot of it goes to -- it goes to an israeli ethic about their soldiers. israeli has a conscript army. so when mothers and fathers send their children to the army here, there is sort of an implicit bargain that israelis believe they have with their government, that the government will do everything in its power to take care of those soldiers, including if they are taken captive as was gilad shalit. we've seen deals like this in the past. in 1985 there was a deal which saw over 1,100 prisoners released for three israeli soldiers. this deal which has seen over a thousand, 1,027, they're certainly striking in their asymmetry, not unprecedented, but the government will argue it's a measure of how much they care about their soldiers and how important -- the importance they put on maintaining their safety, charles. >> kevin, give us, if you like, the points of connection between what's happening today, this palestinian exchange and the broader middle east peace process. should we see these events as suggesting a willingness on the part of israelis to negotiate and make concessions in the broader peace process, or should we see it as perhaps in a way suggesting exactly the opposite? >> well, i think it depends upon who you talk to. different people have different opinions about that. as a stated position, the israeli government says it will not negotiate with hamas. it considers hamas a terrorist organization. and until hamas renounces violence, accepts the state of israel, among some other conditions, israel has said it won't talk to hamas. clearly israel has been talking to hamas. they have this deal brokered, but it was done with egyptian and german mediation. that's what israel says is the difference, is that this was a deal that was mediated, a one-off case where we're negotiating the get this done. but that said, there is certainly a belief that if a deal for a thousand prisoners can be released, a difficult multi-stage deal that involves the two sides at least being in proximity to each other, why can't then negotiations between hamas and israel take place to get this peace process moving forward. that's a question a lot of people have. some people will find a measure of hope that this was successfully, seems to have been successfully negotiated. i think the prevailing view is that this is a one-off deal. this does not signal an omen for improved negotiations to come or some sort of break-through deal between hamas and israel at this point. it's worth reminding the viewers that mahmoud abbas has not been involved in negotiations for well over a year. despite the efforts to get those negotiations started again, no one is predicting they will start any time soon. >> kevin flower joining us live from jerusalem. indeed, the pictures you've been seeing in the upper left of your screen i should tell you have been from the west bank with the palestinian flag being waved. the hamas flag, as you'd expect in the west bank, perhaps a little less prom meant. in thrower right of the screen you're seeing very few images that have been given to us by the israeli defense forces, media people, pictures shot by them, by military camera men of the handing over of shalit. actually some of them i'm told are, in fact, also from egyptian television. as we've been hearing israeli families of some terror victims saying the price of the swap is too high they think. the potential consequences are too dangerous. frederick polite kin has more on that. >> more than 1,000 prisoners for one soldier. while many are applauding the prisoner swap, others are outraged. arnold roth's daughter was killed in a terror attack. now one of the women convicted is likely to be released. >> everyone wants to see shalit safe and well and back home, i think there's a real failure to understand the price that's been paid. the prize is phenomenal. we're releasing people who have dedicated their lives to killing jews and israelis. >> reporter: in august 2001 a suicide bomber blew himself up in a pizza parlor in downtown jerusalem killing 15 people. many family members of the victims of this and other terror attacks, oppose the release of shalit. one man who lost five relatives in the bombing even desecrated the memorial in tel aviv. this is the site of the bombing, even ten years later the wounds have not yet healed. for israel, there's more at stake here, a larger security concern. could those they're releasing now perpetrate other acts of violence in the future and 'em bolden other groups to try to capture israeli soldiers. some israeli politicians say these concerns made it impossible for them to approve the deal. >> voting for such an agreement will be a tremendous encouragement for future terror. in the middle east it will be perceived as a move that simply says that terror pays off. >> reporter: still israeli's prime minister insists there was no other choice. it is very possible that this window of opportunity that opened because of the circumstances would have closed indefinitely netanyahu said and we would never have been able to bring gilad home at all. an argument arnold roth says he cannot buy into. while israeli gets ready to bring gilad shalit home, many fear the consequences the deal for his release might have in the future. fred pleitgen. >> we're still with fred pleitgen. perhaps some dissatisfaction at the price there, fred. >> reporter: the people here say they absolutely feel satisfaction at the fact that gilad shalit will soon be released. there was a little cheer that went through the people who are standing in front of the home of gilad shalit when we saw those first television pictures coming from egyptian tv. it really is the first proof of life that gilad shalit that these people have gotten in a long time. it's not just gilad shalit's hometown where people have been supporting him. it is the entire outlying area here around this place where people have been putting up signs. they've been decorating the trees around the house of the shalits. they're happy this is coming to an end. i spoke to one man who said throughout this entire time, of course there were dire moments, but they never did give up hope. that is something we've seen across the board where we've seen marches, concerts, activism on the part of his parents and supporters to pressure israel's prime minister and government to do what they can to get this soldier released. charles? >> fred, what is the sense, if you like, among other members of the military? shalit is not just from mitts ba gila, he's also an israeli soldier. do you have a sense of what people there who are serving in israeli's military make of this exchan exchange? >> reporter: one of the interesting things we have to keep in mind about this country is this is, of course, a people's military that you have here. so when you have a case like the one of gilad shalit where a soldier gets taken while he is in the line of duty, of course everybody here can identify with that. you have on the one hand the older people, the parents whose worst nightmare it is or would be for their child to be taken in the line of duty. then you have the soldiers themselves who very much know what it would be like, very much feel that this would also be their worst nightmare to be taken in the line of doughty as well. this is certainly something that young and old in this country can identify with. therefore, there is, of course, a lot of support for the measure that has been taken now. it's really interesting to see, if you take a look at the poll numbers that have been going around here in israel, various polltion have been conducted on this subject. by and large, what these polls show is about 70% of israelis do approve the prisoner exchange that is of course on going right now. however, round about 50% to 60% also say they believe that in the long term this will hurt israel's security. so really it is a very difficult decision that the society had to make or the government that represents the society had to make in trying to reconcile these two very, very important and fundamental things in the society, one of course the security and, on the other hand, this very fundamental opinion that no israeli will be left behind, especially when serving this country and its military, charles. >> okay, fred flight again joining us live from the hometown of the sergeant major gilad shalit, the israeli soldier who as we understand has been handed over to israeli officials. that is according to egyptian television. i'm told we're going to be able to show you pictures now from egyptian television of the prisoners. these are the palestinian prisoners, some of the 1,027 who are to be released in two batches. those were pictures there very briefly from egyptian television of them on their way to the rafha cross point. let's listen in. >> translator: welcome. thank you very much. congratulations to egyptian, to the arab people and the palestinians. this is an historic day for the whole nation. this deal for egyptians is a good deal. i have spent 18 years in prison. i had great hope in god and also i thank the egyptian people who have negotiated excellently to release us. >> have you been following there? >>. >> translator: yes, we have been following this in detail. every day we increased our prayer and asking god. long live egypt. free arab, long live egypt as a free arab country. >> welcome back. what would you like to say to the world? >> translator: i would like to say to the whole world congratulations to all my colleagues, particularly the egyptian government and egyptian mediators. it is thanks to god and to them that this whole deal happened successfully. we are extremely happy at the -- of our happiness and we hope the rest of our prisoners who also become released, we hope they are released soon, and all we wanted was the whole arab and muslim states to be one. thank you very much and thank god. this is an honorable deal for us and for the palestinian people and also for the egyptian government who have exerted great effort and we thank them for this and thank all the egyptian people for standing by us, by the whole nation and the palestinian people. may god bless you and bless the whole nation. >> those are some of the voices of prisoners, the 297 -- among the 297 who are to be released at rafha where they were handed over on israeli authorities to egyptian authorities. it's interesting that those spokesmen and spokeswoman there were full of raise for egypt and its role in securing this exchange. and earlier on on this program, mark regev, the israeli spokesman told cnn that he was also very grateful, that the israeli government was very grateful to the egyptians for their part in handing this deal which has been a long and atlantic i can one. of course, the release of more than 1,000 palestinian prisoners is bringing joy to gaza. for many palestinians it means their loved ones are coming home. as our senior correspondent matthew chance shows, it's showing that capturing israelis may be a pretty effective tactic. >> reporter: just one israeli captive for more than 1,000 palestinians, a prisoner exchange being celebrated on the streets of gaza. we want to liberate the rest of the prisoners, too, says this man, by kidnapping more soldiers like gilad shalit. it's not a message many israelis overwhelmingly in support of the exchange will want to hear. but in gaza the capture of gilad shalit depicted on murals like this one across the city was also seen as a valuable opportunity. for hamas which runs gaza, a prisoner swap is the way to bolster its popularity, for families parted by lengthy prison terms, it's a chance to be reunited. this woman was pregnant with her daughter now 20 when her husband was arrested by israel and sentenced to six life terms for murder. only when gilad shalit was captured, she told me, did she believe her daughter would ever get to know her dad. >> so you knew when hamas captured gilad shalit, you knew there was a chance that your husband would be released and a prisoner exchange? >> reporter: the young israeli soldier captured here five years ago has proved a valuable negotiating chip indeed. matthew chance, cnn gaza. we'll take a break there. you've been watching our live coverage of the swap of one israeli soldier, sergeant major gilad shalit, for 1,027 palestinian prisoners in two stages, about half of them being released today. more on that when we join you in a moment. stay with us. 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 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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. ♪ our top international story at this hour, israeli soldier gilad shalit is in israeli hands for the first time in five years. according to reports he is indeed back in israel itself. he was captured in june 2006. palestinian officials handed him over to egyptian security forces who then passed him to israeli officials and then he came across the border. shalit's release came after israel today freed 477 palestinians from its prisons, 550 more palestinians are expected to be released later this year. the arithmetic for this prisoner exchange is 1,027-1. but it is the combination of complex negotiations, complex behind-the-screens diplomacy and political wrangling within industrial itself. on monday there were rejections of this exchange. shalit's father appeared in the court to oppose the family's petition. the israeli public overwhelmingly supports the prisoner exchange. meanwhile in gaza city, family members of palestinian prisoners celebrated the pending release of their loved ones even though many of the released palestinians will not be allowed to return to their homes. let's have a look at the european stock market now. we're getting on for two hours into the trading day. we are seeing the losses coming back a little bit, but not very much. they are quite steep, off by 1% for london and footsie. only by 2/3% of the xetra dax. worries over the european debt crisis clearly back to the fore. the situation in europe seems to be going from bad to worse. not only did germany's finance minister pour cold water on the idea yesterday that a comprehensive plan to solve the debt crisis would be agreed this weekend, but more significantly the ratings agency moody's has warned it could slap france's aaa debt rating with a negative outlook. we're joining me now to take a look at all this is emily rubin. 24 hours ago we were sitting here wondering why the markets were so positive. now i suppose we have to wonder why they're so negative. >> yesterday we were talking about mixed messages. today there seems to be one clear message from moody's. that is it may review france's aaa rating and change it from stable to negative. it says france is among the weakest of countries with the aaa rating. why is this important now? clearly eu ministers have this deadline at the weekend to try to finalize a five-point plan that will finally put the eurozone crisis to bed. how can france back the eurozone members an back its bank which are hugely exposed to greek sovereign debt. let's look at the picture generally. we've seen french bank shares fall in the last week or so. of course italy and spain are also downgraded by moody's. this very much is being seen as a negative step in the markets. >> it's interesting though, isn't it, it's the banks that seem to be the weak point in the french chain if you like. the government finances are not that bad. i think moody's does pay lip service to it. it is after all -- they haven't downgraded it, sent the outlook to negative. >> i think moody's are saying to the french government watch the path that you're going down. one interesting point. we were looking yesterday at why the rebound in the equities market over the last two weeks was happening. was it because of hope that the eu ministers? there's an interesting theory that really the rallying in the markets was down to the stabilization of u.s. growth outlook in the markets. why is that important? it means if eu ministers don't come up with a solution, then the drop in the markets may not be as bad as people have been worrying about. >> it's interesting, because if barclay's capital is right, i read that and i thought it was definitely persuasive, it's the real economy aspects of the news flow pushing the markets around at the moment, then presumably the weaker days from china, very much to the fore at the moment. >> basically what's happening is the eu ministers put this eight-day deadline on themselves. this is unprecedented because they set the bar very high. i think that is the key. what will come out of the five-point plan this weekend? >> thank you very much, emily ruben joining me live. back to our top story, the release of israeli soldier gilad shalit. we've got pictures here of gilad shalit being handed over, pictures, some of them reaching us from egyptian television and some from israeli military camera men. the exchange took place or should we say the release, the handing over of shalit to israeli officials took place a short time ago on israeli -- in -- on egyptian soil. we cannot confirm for you that he is in israeli hands as such just yet. nevertheless, wherever he is, his status has changed remarkably for the first time in five years. he's been held prisoner in gaza by hamas since his capture in june 2006. that's five years and four months ago. palestinian officials handed him over to egyptian security forces just to summarize for you what happened. and then the plan was any way that he should be passed on to israeli officials. shalit's release came after israeli today, tuesday, freed 477 palestinians from its prisoners, 550 more palestinians are expected to be released later this year. so in total 1,027 palestinian prisoners will be released against the release of gilad shalit. i'm charles hodson in london. much more on the prisoner exchange in the hours ahead. good-bye for now. -- captions by vitac -- www.vitac.com there's no time like the present to consider all your health insurance options. does medicare alone meet your needs? 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