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Marking the Anniversary of Hong Kong Handover; Morsi to Address Egyptians; US, Russia Talk about Syria; Supreme Court Upholds Obama Health Care Law

Aired June 29, 2012 - 08:00:00   ET


KRISTIE LU STOUT, CNN ANCHOR: I'm Kristie Lu Stout, and welcome to NEWS STREAM, where news and technology meet. And we begin right here in Hong Kong. China's president is in town for ceremonies marking 15 years since the end of British rule.

Plus world stock markets cheer after European leaders reach an agreement. We'll tell you about the breakthrough in Brussels.

And a shocking upset at Wimbledon. Meet the man who beat Rafael Nadal.


STOUT: Now Chinese president Hu Jintao is in Hong Kong ahead of the 15th anniversary of the territory's handover from British rule. Mr. Hu stepped off an Air China plane earlier this Friday to a crowd of waving people and a red carpet treatment worthy of a state visit.

Over the next three days the president is due to attend a flag raising ceremony, see a fireworks display and witness the inauguration of Hong Kong's new chief executive. Beyond that, most of his itinerary has not been made public. And police in Hong Kong say that they are prepared for anti-Beijing protests. Most of them are not expected to come anywhere near Mr. Hu.

However, a number of small fenced-in areas called petition zones could allow a few people to get closer.

On Sunday -- that's the day of the actual handover anniversary -- tens of thousands of protesters are expected to march to the government headquarters before continuing on to the central government's liaison offices in the city's western district. And the weather is also threatening to disrupt President Hu's visit.

Let's bring up a live look at the Hong Kong skyline right across Victoria Harbor and a tropical storm is heading across the South China Sea and Hong Kong's T3 typing (ph) signal is now hoisted. If it does end up raining on Sunday, it may feel like history repeating itself on a day when many Hong Kongers are feeling anxious about their future. Andrew Stevens has more.



ANDREW STEVENS, CNN CONTRIBUTOR (voice-over): It was a very dignified, very British and very wet affair as Prince Charles, representing the British crown, brought the curtain down on 150 years of colonial rule on the eve of July 1, 1997.


STEVENS (voice-over): Fifteen years on, many things have changed in Hong Kong, but not everything. The bagpipes still skirl under the watchful eyes of British school principals at a passing-out parade for new Hong Kong police recruits.

STEVENS: Hong Kong was handed back to China with very clear conditions. It was to be a special administrative zone, autonomous under China, but it would have its own borders, its own financial system, its own currency, its own passports. But perhaps most important, Hong Kong would have its own rule of law.

STEVENS (voice-over): A law that protects Hong Kong's noisy and independent press and the freedom to protest. This is the only corner of China where you'll see remembrance services for the 1989 Tiananmen Square crackdown.

CHRISTINE LOH, CIVIC EXCHANGE: Look at the people of Hong Kong here. Daily lives really haven't changed very much.

Lawyer Christine Loh was a lawmaker before and after the handover. She now runs a top think tank.

LOH: We're similar in terms of our history, in terms of the culture, but Hong Kong has a separate identify that is built on many, many years of much freer rule of law society, and that's deeply embedded in our DNA.

STEVENS (voice-over): But freedom of expression and Hong Kong's unique status within China does not guarantee peace of mind.

LOH: The mainland is so big, we're so small, we're a small city with 7 million people. It's easy for us to be physically overwhelmed. I think that's our fear.

STEVENS (voice-over): But China has also been a lifeline for Hong Kong. Its investment policies helping the territory whether economic storms on more than one occasion. (Inaudible) wealthy mainlanders have been arriving in Hong Kong literally in (inaudible) millions, helping to keep local businesses afloat. But that's also created tensions.

Earlier this year, full-page advertisements appeared in the local media, bluntly calling mainlanders "locusts," and accusing them of squeezing Hong Kongers out of their own hospitals and schools and driving up property prices.

DOUGLAS YOUNG, FOUNDER, GOODS OF DESIRE: It's always been a love-hate relationship, I think, with the mainland.

STEVENS (voice-over): Entrepreneur Douglas Young's Goods of Desire is a unique Hong Kong chain of stores, selling furniture and art with a local flavor. He worries that the territory's culture, forged from 150 years of British rule and 15 years of local autonomy could be threatened.

YOUNG: There is (inaudible) assimilating into a mainland city. I think we are actually losing our differences.

STEVENS (voice-over): Case in point: more and more local schools are teaching Chinese lessons in the national Pu Tong Hua language rather than the local and ancient Cantonese dialect. Many worry Hong Kong's culture and language are now under serious threat. But there is pressure to conform.

UNIDENTIFIED MALE (through translator): We are Chinese and Pu Tong Hua is our mother tongue. So we should learn Pu Tong Hua to show allegiance to our country.

STEVENS (voice-over): Can Hong Kong a true part of China and retain its own identity? That's the question this generation is going to have to answer -- Andrew Stevens, CNN, Hong Kong.


STOUT: Now I want to step back and remind you of the emotions in 1997. And this image sums up a lot of it.

You see Chris Patten, the last governor of British Hong Kong waving goodbye. And he walks on board the boat that will carry him and the Prince of Wales away from their former colony. His family stands, weeping, on the deck. And British representatives, they promise to never forget Hong Kong.

And at the time, many Hong Kong people were not sure that they could trust China to keep its pledge of one country, two systems. In fact, this pro-democracy rally took place just 15 hours after the handover. Now several thousand people came out to test whether or not Beijing would really let them protest.

Now still on the subject of China, another big story we've been watching is the successful completion of China's first manned space docking. And take a look at this. It is China's Shenzhou 9 spacecraft returning to Earth earlier this Friday and we'll have more on the story later this hour from Stan Grant in Beijing.

Now Egypt's President-Elect Mohammed Morsi is set to address crowds in Tahrir Square and people are gathering to hear Morsi lay out his plan for what's being called the rebirth of Egypt.

Morsi won the presidency in a historical runoff election and he is the first freely elected civilian president. His powers remain undefined since Egypt still has no constitution. Now the crowds are waiting eagerly in Tahrir Square to hear from Mohammed Morsi and with more, Dan Rivers is overlooking the square in central Cairo.

And, Dan, as we wait for Morsi to speak, can you describe the scene there?

DAN RIVERS, CNN CORRESPONDENT: Well, there are several thousand Muslim Brotherhood devotees who've gathered here for Friday prayers. Let me step out of the way, as you can see what I'm talking about. The square beginning to fill up, it's not as -- quite as an impressive scene as perhaps they were hoping for.

They were talking about a million-man march today. There's nothing like a million people down there; several thousand, though, not the kind of numbers that we saw on Sunday night when the result of the election was announced.

But we understand that President-Elect Mohammed Morsi will be speaking to this crowd on the stage in the center there, in the next few hours. Initially we were told he would speak almost straight after Friday prayers, about now. Now his presidential spokesman is saying it's looking more like 6 o'clock this evening. We've been given no reason as to why it has been delayed.

But in the meantime, the crowd have been chanting things like, "Down, down with military rule." There have been revolutionary songs from the 1950 at the time of President Nasser. And the banner there on the stage or behind, to the left of the stage, is saying no to the constitutional declaration, which removed several key powers from the presidency, limiting its powers that were implemented by the military.

So quite a sort of anti-military theme to the chants, to the banners, to the tone of this demonstration, people now waiting to hear what President-Elect Morsi will say as he speaks, really, publicly for the first time to the crowd here in Tahrir Square, and also what he will say after his swearing-in tomorrow at about 11 o'clock local time.

That will now happen at the Constitutional Court (ph), not in front of the dissolved parliament as he was hoping for. So that is a compromise that the Muslim Brotherhood have already been forced to make, accepting, in effect, the dissolution of parliament.

STOUT: The people there in the square behind you, Dan, chanting, "Down, down with military rule," what role will members of the ruling military council have in Egypt's new government?

STEVENS: Well, already Field Marshal Tantawi, the head of the Egyptian military, has been announced as defense minister. So they have very quickly ensured -- and I think this deal was done long before Sunday, or several days before Sunday -- that they have the defense foreign policy and security all within their grasp. That will remain firmly within the purview of the military.

President-Elect Morsi will have some power, although very limited domestically here. I think it's the economy, really, that is his biggest challenge and governing on behalf of all Egyptians, as he said he would. He's resigned from the Muslim Brotherhood's political wing, the keeping of can he kickstart this economy.

There's already talk with the IMF of a $3.2 billion loan to bridge fiscal shortfalls. It is in a dire state. It fell by 4.5 percent in the first quarter after the revolution here and has never really recovered since.

So that's going to be probably number one in his interest, is how to kickstart the economy, how to get tourists back here, how to get inward investment here and how to show to the world that he is not an Islamist extremist, that he can govern on behalf of all of Egypt.

STOUT: We'll look forward to hearing Mohammed Morsi speak on the rebirth of Egypt, now set to take place 6:00 pm local time. Dan Rivers reporting live from above Tahrir Square.

Thank you.

You're watching NEWS STREAM. And still to come, more attacks in Syria, targeting the capital and elsewhere.

Plus Italians celebrate their team's stunning upset in the Euro 2012 semifinals.

And fair trays (ph) a leading chocolate company is taking a closer look at its supply chain as part of CNN's "Freedom Project."



STOUT: Welcome back. Now it's been argued that men's tennis has become too predictable with the Big Three of Novak Djokovic, Rafael Nadal and Roger Federer dominating the sport for almost a decade. Well, there was nothing predictable about what happened at Wimbledon on Thursday.

Amanda Davies is in London with more.

And, Amanda, what an upset.

AMANDA DAVIES, CNN CORRESPONDENT: It was, Kristie. People were absolutely glued to their television screens here, up until gone 10 o'clock on Thursday evening. There were just some quite incredible scenes on Center Court at Wimbledon and a miracle was how Lucas Rosol described it.

Others are talking about it as the biggest shock in tournament history this morning after the world number two, an 11-time grand slam champion, Rafael Nadal, was knocked in the second round by the world number 100, Lucas Rosol was his name. He's a player who's only won 18 tour matches in his whole career.

People really were flicking their record books. They didn't know anything about him. Nadal did take the first set, but was really played off the court by Rosol as the player from the Czech Republic went into two sets with one lead, two-time Wimbledon winner Nadal did pull level at two sets all, but Rosol serving big hits and proved to be decisive at 26 yards, never even made it past the first round of qualifying, let alone the main draw in five attempts at Wimbledon.

He hit 22 aces en route to the biggest victory of his career, willing through he was six games to four in the fifth set. Has to be said, the shock remains the morning after the night before at the All England Club, and Alex Thomas is there for us.


ALEX THOMAS, CNN CONTRIBUTOR: As fans, players and officials arrive for day five of the championships, I can bet you they're all still talking about not just one of the biggest tennis upsets of all time, but one of the biggest shocks in sporting history.

After 10 o'clock last night, with the lights on and the roof closed at the famous Center Court behind me, Rafael Nadal, a two-time men's champion and record seven times winner of the French Open, just a few weeks ago, lost to a virtual tennis unknown.

Lucas Rosol is a 26-year old from the Czech Republic, making his Wimbledon singles debut. He'd only ever played on the grass here for the first time 12 months ago, losing in the first round of the doubles. The contrast is so stark that Rosol has never won a singles tournament in his whole career, and amassed just over $800,000 in prize money, compared to Nadal's 50 titles and more than $50 million in money earned throughout his career.

Nadal wasn't happy; you'd expect that. But this praise for the man that had beat him in the post-match news conference, but it's a big shock here at Wimbledon. Rafael Nadal's Wimbledon has finished for the earliest since he was here as a 19-year old back in 2005 -- Alex Thomas, CNN, Wimbledon.


DAVIES (voice-over): So, second seed Nadal is out, but will Novak Djokovic and Roger Federer follow suit? The world number one is just about to get underway on Center Court, up against another player from the Czech Republic Radek Stepanek, six-time Wimbledon champion Roger Federer is in action later on, as is the women's top seed, Maria Sharapova. We will, of course, have updates throughout the day here on CNN.

DAVIES: Well, there was something of a surprise at Euro 2012 as well on Thursday and Mario Balotelli has described his match-winning performance for Italy as the best night of his life. The striker scored both goals for the Azzurri in their 2-1 win over Germany. And it took (inaudible) through to Sunday's final, where they'll play Spain for the trophy.


DAVIES (voice-over): Germany went into the game as favorite, (inaudible) never beaten the Italians in a competitive game. They're on the back first after just 20 minutes. Antonio Cassano with a super cross there for Balotelli to head home.

Manchester City striker then make it 2 before halftime, another fantastic strike, which ultimately proved the match winner, despite a late German penalty making it 2-1. So Italy proved to their first major final since the World Cup finals in 2006. Kristie, they've already met Italy and Spain in this tournament.

One (inaudible) finished when they met in the group stage, but you think it would be a different story in Kiev on Sunday.

STOUT: Do you think? Amanda Davies, joining us live there. Thank you very much indeed. Have a good weekend.

You're watching NEWS STREAM. And coming up next, President Barack Obama says the Supreme Court's decision to uphold his signature health care reform law is a victory for the American people. But Republicans say the fight isn't over.




STOUT: Coming to you live from Hong Kong, you're back watching NEWS STREAM. And from the U.S. Supreme Court to Congress to Main Street, two major events are showcasing deep political divisions in the U.S. in the midst of an election year.

Now supporters of President Barack Obama's health care reform law are cheering the high court's decision to uphold the legislation. They say it means millions more Americans will have health care coverage. But opponents say the law reeks of government overreach into people's pocketbooks, since those without health care coverage will have to pay a financial penalty.

Now political anger is also boiling over in the Republican-controlled House of Representatives. Lawmakers voted to hold Attorney General Eric Holder in contempt for not turning over documents in a gunrunning sting operation that went bad.

The Supreme Court may have ruled, but the battle over health care reform isn't over. Republicans are promising to make it a centerpiece of the ongoing presidential campaign. Jessica Yellin is at the White House.


JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT (voice-over): Inside the White House, officials describe elation over the court's ruling. But on camera, no spiking the ball.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: They're reaffirmed a fundamental principle, that here in America, in the wealthiest nation on Earth, no illness or accident should lead to any family's financial ruin.

YELLIN (voice-over): The president emphasized the more popular parts of the bill, appealing to key constituencies.

OBAMA: Young adults under the age of 26 are able to stay on their parents' health care plans. Seniors receive a discount on their prescription drugs. They won't be able to charge you more just because you're a woman.

YELLIN (voice-over): Already Republicans are campaigning off the ruling. Governor Romney quick on the assault.

FORMER GOV. MITT ROMNEY, R-MASS., PRESIDENTIAL CANDIDATE: ObamaCare was bad policy yesterday. It's bad policy today. Our mission is clear: if we want to get rid of ObamaCare, we're going to have to replace President Obama.

YELLIN (voice-over): On Capitol Hill, House Republicans vow a vote to repeal the bill next month, from the Senate a new line of attack.

SEN. MITCH O'DONNELL (R): Well, the Supreme Court has spoken. This law is a tax. The bill was sold to the American people on a deception.

YELLIN (voice-over): What does he mean? The court found it's constitutional to require people to pay a fee if they don't get health insurance, because it's a tax, just like any other federal tax.

PROF. NEAL KATYAL, GEORGETOWN UNIVERSITY: What the chief justice said today is, look, it quacks like a tax, it looks like a tax, it functions like a tax, it is a tax.

YELLIN (voice-over): It's no secret: taxes are not politically popular. And when the president was selling the bill back in 2009, he told ABC News:

OBAMA: For us to say that you've got to take a responsibility to get health insurance is absolutely not a tax increase.

YELLIN (voice-over): Now Democratic campaign officials are arming supporters with talking points, arguing the law has the largest health care tax cut in history because it includes subsidies. And Romney created the same tax cut when he passed health care in Massachusetts. But you can expect the Republicans to intensify their attack.

This memo from leading conservative group American Crossroads says the ruling spells doom for the president's party, calling it "a millstone around the next of any Democrat running for federal office in 2012."

YELLIN: Officials here say the president got word of the ruling initially by watching TV. And two of the networks he saw, FOX and CNN, at first said the mandate had been struck down. But then the president's White House counsel came into the office outside of the Oval, gave him two thumbs up and said the law would stand.

We're told that there was a hug and smiles all around, and the president's first call was to Donald Verrilli, the solicitor general who argued the case before the Supreme Court. We're told the president said, "Congratulations." Jessica Yellin, CNN, the White House.


STOUT: Now the Supreme Court voted 5-4 to uphold the health care reform law. And while Republican lawmakers are bound to endue what they call ObamaCare, back in 2000, Republicans cheered another 5-4 ruling by the court. You may remember Bush v. Gore, which put Republican presidential nominee George W. Bush in the White House over Democratic rival Al Gore.

Now another recent 5-4 decision is having a big impact on the current presidential campaign in Citizens United versus FEC. The court rules that the government cannot ban corporations from contributing unlimited donations to political action committees, announcing the rise of the so- called super PACs backing candidates.

And if you've ever watched an American Cup drama on TV, you've probably heard this one. "You have the right to remain silent." Well, that came out of the landmark 1966 Miranda v. Arizona case. Yes, it is another 5-4 decision.

Let's get more now on the unprecedented U.S. House vote that landed Attorney General Eric Holder in contempt. Joe Johns is in Washington. He joins us now live.

And Joe, Holder has been held in contempt of Congress for refusing to hand over files linked to a gunrunning investigation called Fast and Furious. Can you give us the background here?

JOE JOHNS, CNN CORRESPONDENT: Well, Kristie, the House Oversight Committee has demanded thousands and thousands of pages of documents from the Justice Department about that gunrunning operation. And they say they smell a cover-up.

The Justice Department and Eric Holder have said they will not provide all of the information that the committee has requested. And Holder has used a variety of excuses for that, including saying he has to protect ongoing investigations, prosecutions, some of the information may be privileged as to communications among people in the administration.

So it's a morass that sort of implications the separation of powers in Washington, the legislative branch being one and the White House, the executive, being the other. It's a clash. It's happened before, virtually in every administration over the past several decades.

STOUT: It's clash between branches; it's a clash between parties. Democrats are saying that the probe and the contempt vote, it's all about politics. I mean, is this a sign of an extremely partisan and some say broken government in America?

JOHNS: Oh, it's broken government, all right. I think there's absolutely no question about that. And there's certainly some politics at play here. The National Rifle Association, which is one of the most powerful lobbies in Washington, D.C., told members of Congress that they would be scoring the vote.

And what that means is they would be holding the vote against any member who decided not to vote for the contempt against Eric Holder. So their concern is about gun control and whether this administration was trying to use Operation Fast and Furious in order to create more gun control going on down the road.

So Republicans realize that the National Rifle Association is part of their political base, also that this might be good for them in November, even though they say it's all about getting to the truth and the bottom of the Fast and Furious operation.

STOUT: Well, incredible political acrimony there in the U.S. Thank you very much indeed, Joe Johns, for sharing this story to an international audience here. Thank you.

You're watching NEWS STREAM. And still ahead, widespread violence with more attacks across Syria. Is there any cause for international leaders to be optimistic before meeting in Geneva?

And a breakthrough for the banks: Eurozone leaders, they have reached an agreement in Brussels. But just how useful will the deal be? Stay with us.


KRISTIE LU STOUT, CNN ANCHOR: I'm Kristie Lu Stout. You're watching NEWS STREAM, and these are your headlines.

Now a crucial E.U. summit has entered its second day in Brussels and there's already been a breakthrough, the creation of a single banking authority for the bloc's 17 members. And it is seen as key step for closer financial integration. The euro surged after the announcement.

Now three Chinese astronauts have returned to Earth after a breakthrough space mission. For the first time ever, China completed a manual docking in orbit and sent a female astronaut into space.

In Sudan, activists are setting the stage for the largest anti- government protest yet following Thursday's violent (inaudible). In the past two weeks, they've been holding demonstrations, calling for President Omar al-Bashir to step down. This was set off by the government austerity measures and soaring prices.

An opposition group says 15 people have been killed across Syria so far on Friday. The conflict now appears to be moving in on the capital, Damascus. Now several powerful explosions were reported there by activists this morning.

But it is not the only place where the violence is continuing. In Dara'a, considered the birthplace of the country's uprising, activists say an opposition stronghold was shelled by security forces. And Syrian forces are also accused of opening fire on a funeral in Damair (ph). An international action group on Syria is meeting in Geneva on Saturday.

We will have more on the U.S. and Russian perspectives to that in just a moment. But first let's get the latest from Mohammed Jamjoom. He's been monitoring this story from CNN in Abu Dhabi. Mohammed, there's violence in Damascus, Dara'a and elsewhere. What's the latest inside Syria?

MOHAMMED JAMJOOM, CNN CORRESPONDENT: Well, we're getting so many accounts, Kristie, that it is yet another bloody day in Syria. Yesterday a particularly bloody day. Yesterday we were told from opposition activists at least 140 people killed across Syria, and among those dead, at least 46 Syrian regime forces. Now you spoke about these blasts that have been reported in Damascus.

Today we've heard of several blasts earlier in the day, but also there were two blasts that rocked the capital yesterday. They happened according to Syrian state television in the parking lot outside the compound that houses the Ministry of Justice. It's called the Justice Palace there in Damascus. And it's raising a lot of questions as to who is responsible for these attacks.

Now the Free Syrian Army has told us that they are not responsible for this, that they are not conducting any of these attacks that are happening in the capital, that these are fortresses that are heavily guarded, they wouldn't be able to attack them even if they wanted to. The government for their part continues to blame armed terrorist groups.

Now to that end, the Syrian regime is stating on Syrian state television now that there have been raids that have been conducted in the Damascus suburb of Douma. Now we heard horrific tales emerging yesterday from the Damascus suburb of Douma, that many, many people were killed, that there were dozens of casualties as the army was attacking people there in that suburb.

The army is now saying that they are conducting raids there, that there have been clashes with armed terrorist groups, and that they are continuing to kill and arrest members of armed terrorist groups there in Douma.

But because there have been -- there has been an increase in the number of attacks in the capital and in the second largest city in Syria, Aleppo, many people are wondering what exactly that means for the Syrian regime right now, and if that violence in those big cities will continue to escalate, Kristie.

STOUT: Bashar al-Assad has been making some interesting comments to state media. He has been warning against any outside interference, apparently quite defiant at the key meeting in Geneva this weekend.

JAMJOOM: That's right, a continued entrenched defiance by the Syrian president. He claims that he will reject any and all type of foreign intervention, but this is all happening at a time when, as we mentioned, there is more fighting creeping closer and into the capital, also in the second largest city in Syria, Aleppo.

Many people are wondering what that means for the regime. There's a flurry of diplomatic activity. You have Secretary of State -- U.S. Secretary of State Hillary Clinton today, about to meet with her Russian counterpart, Sergey Lavrov.

But also tomorrow you have this meeting in Geneva, this emergency meeting. It's going to have the five permanent members of the U.N. Security Council, also envoys from the E.U. and from the Arab League and from the U.N. also invited to that.

The fact of the matter is, though, what can be done? Nobody knows at this stage. The Russian president, you know, there are deep divisions between the U.S. and between Russia, and Bashar al-Assad says he's not going anywhere, and that they will not accept any kind of intervention or transition plan, Kristie.

STOUT: All right. Mohammed Jamjoom reporting for us. Thank you very much indeed. Let's get more now. The diplomatic flurry underway, the U.S. has been pushing for an agreement on a political transition in Damascus, and that is proving to be quite contentious with Russia.

Nonetheless, the U.S. Secretary of State Hillary Clinton will try again this weekend during a high-level talk in St .Petersburg. Let's hear more now from Phil Black in Moscow.

And, Phil, we have Hillary Clinton and her Russian counterpart meeting in St. Petersburg. They're going to try to iron out their deep differences over the transition plan. But can they?

PHIL BLACK, CNN CORRESPONDENT: Well, there's little reason to believe that they can at this stage, Kristie. They're going to be meeting in a few hours' time. The first time these two figures have met face to face since Hillary Clinton has really stepped up her criticism of Russia, the continuing to sell arms to Syria.

And one day out from that conference in Geneva tomorrow that Mohammed mentioned. The point of which is to try and thrash out an international agreement on what a transitional government in Syria would look like, some sort of national unity power sharing situation that would involve figures from the current regime and figures from the opposition as well.

But the key issue in that -- and really the key sticking point would be what role, if any, the current president, Bashar al-Assad, could play in a transitional regime. The position of the broader international community and the Syrian opposition is very clear. He can play no role whatsoever.

But Russia is very firmly of the view that that cannot be a precondition to any settlement, to any talks within Syria that would result in some sort of transitional government.

Sergey Lavrov as recently as yesterday was repeating the very well stated Russian position, which is the international community has no business meddling, interfering, imposing, dictating some sort of political settlement on the Syrian people themselves.

Russia remains firmly of the view that that can only be decided by the Syrians, despite the fact that, in the view of many, they are effectively engaged in a civil war. So all that means that there is little reason to believe that Russia is going to change its position within the next 24 hours. And so little reason to believe that tomorrow's conference in Geneva is going to end with an agreement, Kristie.

STOUT: Yes, Russia refusing to budge. Very little optimism about an agreement coming out of Geneva. Phil Black reporting live from Moscow, thank you.

And it is hard to imagine this all began with children and teenagers writing political graffiti last year. Now the violence, it flared in Syria after they were arrested in the city of Dara'a in March of 2011. The following month an estimated 4,000 to 5,000 troops were sent into the area to crush the dissent.

And as more reports of violence emerged, the U.S. and E.U., they responded with sanctions between May and September. There were calls for stronger action. And there was the enduring stalemate at the U.N., with Russia and China vetoing a Security Council resolution over an end to the crackdown in October.

And despite Syria signing an Arab League proposal in December, there were growing reports of shelling on the city of Homs. And that was thrown into light when American reporter Marie Colvin was killed along with the French photojournalist in February. And then the U.N. and Arab League, joined now by Kofi Annan, he visited Syria, proposing a cease-fire for April the 12th in addition to a U.N. observer mission.

But some say the violence is now worse. In fact, last month, activists report artillery and tanks killed 108 people, including 49 children, in Houla. And on June the 16th, the U.N. suspended its observer mission, saying that things were simply too dangerous.

I want to take you now to the U.S. President Barack Obama, he has declared disaster in the U.S. state of Colorado. He will, in fact, tour the wildfire damage later today. Tom Sater is at the World Weather Center. He joins us now. Tom?

TOM SATER, AMS METEOROLOGIST: Yes, thank you, Kristie. That declaration of disaster, releasing federal funds for those suffering in Colorado and the wildfires, really that -- those -- that funding is the last thing on their mind. When you look out your back door and you see a raging fire on a hilltop that is making its way toward your residence.

There have been hundreds and hundreds of homes that have been destroyed. There are eight wildfires in the state of Colorado alone. It would be nice to get some rainfall. It may be the middle or late July, even to August before they have that monsoon flow move in. Some showers trying to develop but these are dry thunderstorms, kick up the winds.

It's terrible for firefighters and they trigger lightning. Red flag warnings that were in effect for about 10 states down to about six. Yet Alaska still has dry conditions. But at least we're seeing favorable conditions for the next 24 hours for firefighters.

Temperatures that were at 42 to 44 degrees, can you imagine, 16-18 hours in your full protective suits, battling the line of fire with a pick and shovel, well, temperatures still above average, but not as hot. Winds, lightning, humidity increasing. Several fires -- but this is the one that's really burning out of control right now.

And of course this is the Waldo Canyon fire, only 5 percent containment, thousands evacuated, many more in the next 24 hours. And look at this, some 20,000 residential homes still could be threatened by this. We're going to back up in time. Look at Sunday, Monday, Tuesday, the color code here. And you can just see how first it was the ridge top that expanded in the first day.

And then we had winds coming in from the southwest. And of course, on Thursday, really got out of control, currently 75 square miles -- or square kilometers. What we're watching now is that it's approaching the populated areas.

And this is where we're finding troubles. Firefighters are finding when these winds are kicking up toward the ridge tops, the flames catching the top of the trees, leaving some of the undervegetation burned later. But it's called crowning, when it goes from treetop to treetop to treetop. And then the winds kick these strong embers several meters down in toward the residential areas.

So this is what they're going to have to contain and, in fact, only at 5 percent containment, they've got a long way to go. They could use some rainfall and of course, getting a little too much in some areas, in the western coasts, in the Philippines, well to the west, north of Manila. Take a look of this.

This is, of course, Dock Surrey (ph). It is approaching. Well, it is a tropical storm strength, a little strength in the last 24 hours. It could make landfall with gusts near 100 kilometers per hour. Look at some of the rainfall totals, 400 millimeters in just about 12 hours alone. So we're going to watch it make its way probably just to the southwest of Hong Kong.

Some models that are in disagreement, some would have taken up more toward Hong Kong, but a T1 warning has been upgraded to a T3 for strong winds. That's a quick look at your weather here in the CNN World Weather Center. Kristie will have much more when NEWS STREAM returns. Stay with us.



STOUT: Welcome back. And we want to update you now on this woman and her husband. Their story has caused an international outcry. Now Deng Jiyuan said authorities in the Chinese province on Shaanxi forced his pregnant wife to abort their 7-month-old fetus.

Now furious fellow villagers called him a traitor. And then he went missing on Sunday. Now his sister says Deng has telephoned her. Now he told her that he fled to Beijing for safety and he's there now with his attorney. They reportedly intend to file a lawsuit for emotional stress and harm.

Now turning to Europe, now where leaders meeting in Brussels have achieved at least a modest breakthrough that could stabilize the region's debt-stricken banks.

Now European stocks rallied on news of the deal, but the euro currency is surging over 1 percent as investors welcomed the announcement. And with more on this deal and what it means, CNN senior international correspondent, Matthew Chance, joins us now live from London.

And Matthew, some progress in Brussels. Tell us more.

MATTHEW CHANCE, CNN CORRESPONDENT: Yes, it's been quite a dramatic turnaround, actually, because the German Chancellor Angela Merkel went into this crucial E.U. summit saying it would be virtually impossible for her to commit German taxpayers' money to bail out the indebted economies of southern Europe.

But after intensive meetings, 13 hours of meetings, in the early hours of this morning between about 4:00 and 5:00 in the morning local time here, some agreement was reached. It was characterized as a breakthrough by the president of the European Council.

Essentially, a deal which did exactly what Angela Merkel said she wouldn't do, commit those funds to bailing out Eurozone economies, basically the agreement means that banks across the Eurozone that are suffering heavily from debt problems can be recapitalized with money that does not get added onto the national debt of the country.

In other words, that money is basically shared by all of the Eurozone members rich enough to commit funds to the bailout funds that the money will be coming from.

Also European Central Bank committee were given the green light to buy more sovereign debt, that which should help lower some of the interest rates in (inaudible) economies like Spain and Italy that have been suffering very severely with high interest rates ,particularly over the past few weeks.

Well, it came, as I say, after intensive discussions between the European leaders and a big climb down, it seems, or a compromise, at least, by Angela Merkel. Take a listen to what she had to say within the last few moments about the nature of those talks.


ANGELA MERKEL, CHANCELLOR OF GERMANY (through translator): In times I have (inaudible) special room and talked together. And but we talked together all the time about special formulation -- talked a bit about football.


CHANCE: Now she mentioned football there. Mario Monti, of course, the Italian prime minister in a statement afterwards, he couldn't help linking the football match which Germany lost to Italy the day before 2-1 in the Euro 2012 championships. He came out and said the E.U. summit deal and the Euro 2012 win over Germany was a double satisfaction for Italy.

So, you know, failing there, Mario Monti, to hide his satisfaction at the outcome of both of those events, Kristie.

STOUT: Yes, it was an incredible result, both in Brussels and on the pitch for Italy. Matthew, can you tell us about the impact of the Eurozone agreement? Do you think the bailout fund, is it big enough to keep down borrowing costs? What will the impact be?

CHANCE: Well, I guess it depends how it's used and it depends how much of it is going to be used to bail out these economies. Certainly the burden of debt across the Eurozone is far greater than the capacity of the bailout funds to pay for it all.

So it's not a question of all these debts essentially being mutualized and canceled out with this -- with this bailout fund. But I think the really important thing about this announcement is that it marks a sea change in attitude in the European Union as to how to handle this very critical Eurozone crisis. Up until now, the Franco-German position had very much been austerity, austerity, austerity.

That has changed with the departure of President Sarkozy from France, the installation of Francois Hollande as his replacement, the emphasis has moved very much more towards growth and that's why Chancellor Merkel, it seems, was forced into making the concessions that she made at this E.U. summit, Kristie.

STOUT: Mmm. A paradigm shift there. Matthew Chance reporting, thank you.


STOUT: Now for over a year, CNN's Freedom Project has been documenting the link between the chocolate industry and modern-day slavery. In sharp focus, the use of child slaves in the Ivory Coast. And now the Fair Labor Association has published its findings on the cocoa supply chain at Nestle. CNN Fionnuala Sweeney reports there is still a long way to go to rid the industry of slavery.


FIONNULA SWEENEY, CNN CORRESPONDENT (voice-over): Nestle is the first chocolate maker to partner with the Fair Labor Association to evaluate its supply chain. FLA investors traveled to the Ivory Coast early this year, visiting 87 cocoa farms and interviewing more than 500 people. Now they're reporting the results.

AURET VAN HEERDEN, PRESIDENT, FAIR LABOR ASSOCIATION: We found a number of actors, key actors, along that procurement chain, who were not aware of exactly what the standards were, particularly on child labor, and who were not trained to live up to those standards. So there's a communication and awareness and training gap.

SWEENEY (voice-over): The FLA identified several risks in terms of labor standards in the areas of child labor, forced labor, health and safety, discrimination and compensation.

For more than a year now, the CNN Freedom Project has been documenting the disturbing link between the chocolate you consume and child slavery in places where cocoa is produced. No country farms more of it than Ivory Coast.

In January, we brought you the documentary, "Chocolate's Child Slaves," shocking pictures of children working with machetes and hazardous chemicals. Some said they were held against their will, forced to work, and many told us they never get paid.

UNICEF estimates that more than 200,000 children could be involved in some of the worst forms of child labor. That's a staggering number, considering that in 2001, the entire cocoa industry made a joint commitment to stamp it out. Still, the problem runs deep.

HEERDEN: We're dealing with a cultural environment in which this is somewhat traditional and you're dealing with an economic environment of extreme poverty, where, frankly, a lot of farmers can't afford to hire labor and to pay them a decent wage. So we have to really take into account the cultural and economic realities of the people involved.

SWEENEY (voice-over): The Fair Labor Association says it will be a long haul to improving labor conditions in Ivory Coast, but says the Nestle plan offers a good starting point -- Fionnuala Sweeney, CNN, Atlanta.


STOUT: Now China has come back down to Earth and feeling ready to shoot for the moon. Ahead, we've got details of Shenzhou 9's return from space and a look at what comes next.



STOUT: Now it was mission complete this Friday when China's Shenzhou 9 capsule returned to Earth and the mission marked a series of firsts for China. As Stan Grant reports, China feels it can reach even higher.



STAN GRANT, CNN CORRESPONDENT (voice-over): One small step for these three astronauts, one great leap forward for China's space program. The commander of the mission was the first to emerge from the capsule to applause, waving to onlookers, Jing Haipeng was assisted to his feet.

Shenzhou 9 had landed in China's Inner Mongolia, about an hour earlier. Readjusting to Earth's atmosphere after more than a week in space, he was carried into position.

Next was Liu Wang, then the astronaut capturing most attention, the first Chinese woman in space, Liu Yang. Smiling and waving, she, too, was escorted from the capsule. All of this watched at Mission Control by China's Premier Wen Jiabao. With a salute, the three astronauts safely acknowledged mission accomplished.

"We have fulfilled the first manned manual docking in space and now back home safe," Jing Haipeng says, "to all the people across the country, thanks for your concern and wishes."

When asked how she felt about her time in space, Liu Yang said, "It felt like I was at home. I feel very happy and very proud of my country."

Today is another step in China's long march into space, a program that began in the 1970s. This old footage of China launching its first satellite into orbit, to a soundtrack of a Chinese revolutionary song, the successful rocket launch is hailed as a milestone.

UNIDENTIFIED MALE: (Speaking Chinese).

"China's voice is finally heard in space," the narrator of this video said.

China is only now making up ground in the space race, but still lags decades behind space powers the United States and Russia. But where those countries have wound back their programs, China is aiming ever higher. In 2003, China put its first person into orbit, astronaut Yang Liwei is now a national hero.

Last year, Yang showed CNN and others around China's space center, unveiling the country's ambitious reach for the stars.

GRANT: Less than a decade ago, this man was China's first man into space. His ultimate aim is to put a man on the moon. That would be the real test of China's (inaudible).

GRANT (voice-over): For now, China is that little bit closer to the moon. The most populous nation on Earth now has a home in the skies -- Stan Grant, CNN, Beijing.