PBS NewsHour; June 28, 2011 6:00pm-7:00pm PDT

Captioning sponsored by MacNEIL/LEHRER PRODUCTIONS

>> Woodruff: RIOTING ESCALATED IN GREECE TODAY AS A STRIKE AGAINST NEW AUSTERITY MEASURES BROUGHT THE COUNTRY TO A STANDSTILL. GOOD EVENING. I'M JUDY WOODRUFF.

>> Ifill: AND I'M GWEN IFILL. ON THE NEWSHOUR TONIGHT, WE HAVE A REPORT FROM ATHENS, WHERE PROTESTERS CLASHED WITH POLICE.

>> Woodruff: WE ASSESS THE NEW PICK TO HEAD THE INTERNATIONAL MONETARY FUND, CHRISTINE LAGARDE OF FRANCE.

>> Ifill: SCIENCE CORRESPONDENT MILES O'BRIEN REPORTS ON HIGH- TECH ARTIFICIAL BODY PARTS THAT PERFORM ALMOST LIKE REAL ONES.

>> WHAT DID YOU DO?

>> I THOUGHT ABOUT LIFTING MY ARM UP JUST LIKE YOU WOULD THINK ABOUT RAISING YOUR ARM OR LOWERING YOUR ARM.

>> IT'S THAT NATURAL.

>> IT'S THAT NATURAL.

>> Woodruff: FROM GENDER DISCRIMINATION TO MILITARY FUNERALS TO CLIMATE CHANGE, WE LOOK BACK AT THIS YEAR'S CONSEQUENTIAL SUPREME COURT TERM, WITH ANALYSIS FROM MARCIA COYLE AND TOM GOLDSTEIN.

>> Ifill: AND MARGARET WARNER TALKS WITH THE U.S. SPECIAL ENVOY FOR SUDAN ON THE MOUNTING VIOLENCE THERE, AS THE NATION PREPARES TO SPLIT IN TWO.

>> OUT OF FIGHTING MORE THAN 70,000 PEOPLE HAVE BEEN DISPLACED. WE'RE VERY CONCERNED ABOUT GETTING HUMANITARIAN AID INTO THOSE AREAS.

>> Woodruff: THAT'S ALL AHEAD ON TONIGHT'S NEWSHOUR. MAJOR FUNDING FOR THE PBS NEWSHOUR HAS BEEN PROVIDED BY:

>> OKAY, LISTEN. SOMEBODY HAS GOT TO GET SERIOUS.

>> I THINK...

>> WE NEED RENEWABLE ENERGY.

>> ...RENEWABLE ENERGY IS VITAL TO OUR PLANET.

>> YOU HEAR ABOUT ALTERNATIVES, RIGHT? WIND, SOLAR, ALGAE.

>> I THINK IT'S GOT TO WORK ON A BIG SCALE. AND I THINK IT'S GOT TO BE AFFORDABLE.

>> SO, WHERE ARE THEY?

>> IT HAS TO WORK IN THE REAL WORLD. AT CHEVRON, WE'RE INVESTING MILLIONS IN SOLAR AND BIOFUEL TECHNOLOGY TO MAKE IT WORK.

>> WE'VE GOT TO GET ON THIS NOW.

>> RIGHT NOW. AND THE WILLIAM AND FLORA HEWLETT FOUNDATION, WORKING TO SOLVE SOCIAL AND ENVIRONMENTAL PROBLEMS AT HOME AND AROUND THE WORLD. AND WITH THE ONGOING SUPPORT OF THESE INSTITUTIONS AND FOUNDATIONS. AND... THIS PROGRAM WAS MADE POSSIBLE BY THE CORPORATION FOR PUBLIC BROADCASTING. AND BY CONTRIBUTIONS TO YOUR PBS STATION FROM VIEWERS LIKE YOU. THANK YOU.

>> Woodruff: THE STREETS OF ATHENS, GREECE, RANG WITH FIGHTING AND FURY TODAY OVER PROSPECTS OF MORE SPENDING CUTS AND TAX INCREASES. VIOLENCE MARRED A GENERAL STRIKE AS THE PARLIAMENT CONSIDERED NEW AUSTERITY MEASURES TO FEND OFF A NATIONAL DEFAULT. WE HAVE A REPORT FROM JONATHAN RUGMAN OF INDEPENDENT TELEVISION NEWS.

>> Reporter: THE STRUGGLE BEGAN OUTSIDE GREECE'S FINANCE MINISTRY. WHERE A HAIL OF BRICKS AND ROCKS WERE THROWN AT RIOT POLICE. THE POLICE RESPONDED WITH TEAR GAS. AND THE AIR HERE WAS THICK WITH IT FOR HOURS. SEVERAL POLICEMEN WERE INJURED. ONE MAN WAS STABBED IN A FIGHT BETWEEN PROTESTORS. GREECE HAS A LONG HISTORY OF EXTREMIST VIOLENCE. AND SOME CAME ARMED WITH MOLOTOV COCKTAILS LOOKING FOR A FIGHT. BUT GREECE NOW TEETERS ON THE EDGE OF BANKRUPTCY. YOUTH UNEMPLOYMENT IS OVER 40%. AND THE LATEST AUSTERITY MEASURES COULD MAKE A BAD SITUATION VERY MUCH WORSE. THE MESSAGE FROM THESE PROTESTORS IS THAT THEY WILL NOT TOLERATE THE AUTHORITY BEING IMPOSED UPON THEM. THEY BELIEVE THAT SOMEBODY ELSE SHOULD PAY. THE DAY BEGAN PEACEFULLY WITH THOUSANDS ON THE MARCH. THIS GREECE'S FIRST 48-HOUR GENERAL STRIKE IN OVER 30 YEARS. AND NO WONDER. 150,000 JOBS COULD GO AMID AN ECONOMIC REFORM PROGRAM TO BE VOTED ON TOMORROW. WHEN THE PAST YEAR OF CUTS IS ALREADY DESPISED BY MANY.

>> I DON'T THINK ANY PEOPLE WITH COMMON SENSE WILL ALLOW... WILL ACCEPT, YOU KNOW, LESS THAN A YEAR A CUT IN THEIR WAGES MORE THAN 30%. AND TO HAVE AT LEAST ONE OR TWO PERSONS IN THEIR FAMILY UNEMPLOYED.

>> Reporter: THE CROWDS BRING THEIR GAS MASKS HERE BECAUSE TOMORROW'S VOTE IN PARLIAMENT IS ONE OF THE MOST IMPORTANT IN DECADES. ON THE LINE IS $50 BILLION EUROS WORTH OF PRIVATIZATION, $28 BILLION IN TAX RISES AND SPENDING CUTS. ALL OPPOSED BY THOSE WHO BELIEVE THAT ONLY THE RICH SHOULD PAY.

>> THE RICH PEOPLE DON'T PAY THEIR TAXES. THIS IS A PROBLEM. THE DEFICITS FROM THESE PART OF THE PEOPLE NOT FROM THE PEOPLE THAT WORK.

>> Reporter: WHY SHOULD THE FRENCH OR THE GERMANS OR ANYONE ELSE PAY GREECE'S BILLS WHEN MAYBE YOU SHOULD PAY?

>> WHAT? WELL, THE DEBT IS SOMETHING THAT WE ARE SUPPOSED TO PAY BUT WHY SHOULD POOR PEOPLE PAY FOR IT?

>> Reporter: TODAY'S VIOLENCE BY AN EXTREMIST MINORITY WON'T BE THE LAST IN THIS FINANCIAL CRISIS. BUT WHAT'S PERHAPS MORE WORRYING IS THE FEELING OF HOPELESSNESS HERE SEEMS TO BE SPREADING. THE NATIONAL DEBT IS NOW SO VAST THAT GREEKS WONDER. EVEN IF THESE AUSTERITY MEASURES ARE PASSED, WILL THE DEBT EVER BE CHIPPED AWAY?

>> Ifill: THE GREEK DEBT CRISIS WILL BE A TOP PRIORITY FOR THE NEW HEAD OF THE INTERNATIONAL MONETARY FUND, CHRISTINE LAGARDE. WE'LL HAVE MORE ON HER APPOINTMENT COMING UP. ALSO AHEAD, BODIES BIONIC LIMBS CONTROLLED BY HUMAN BRAINS; A WRAP-UP OF THE SUPREME COURT TERM; AND THE VIOLENCE ERUPTING IN SUDAN. BUT FIRST, THE OTHER NEWS OF THE DAY. HERE'S HARI SREENIVASAN.

>> Sreenivasan: WALL STREET RALLIED FOR A SECOND DAY ON HOPES FOR A SOLUTION TO THE GREEK DEBT PROBLEM. THE DOW JONES INDUSTRIAL AVERAGE GAINED 145 POINTS TO CLOSE AT 12,188. THE NASDAQ ROSE 41 POINTS TO CLOSE AT 2729. A MAJOR HOTEL IN AFGHANISTAN WAS BOMBED LATE TODAY, AND A GUN BATTLE BETWEEN POLICE AND THE ATTACKERS CONTINUED FOR HOURS. INTER-CONTINENTAL HOTEL OFFICIALS IN KABUL SAID AT LEAST ONE SUICIDE BOMBER BLEW HIMSELF UP INSIDE THE INTER-CONTINENTAL HOTEL. THE PLACE IS FREQUENTED BY AFGHAN LEADERS AND WESTERN VISITORS. THE TALIBAN CLAIMED RESPONSIBILITY. IT SAID ITS FIGHTERS HAD KILLED OR WOUNDED 50 FOREIGNERS AND AFGHANS IN THE ASSAULT. THE MAN CHOSEN TO BECOME THE TOP U.S. COMMANDER IN AFGHANISTAN HAS LENT HIS SUPPORT TO THE U.S. TROOP WITHDRAWAL PLAN. MARINE LIEUTENANT GENERAL JOHN ALLEN TESTIFIED TODAY AT HIS SENATE CONFIRMATION HEARING. HE SAID HE BACKS PRESIDENT OBAMA'S DECISION TO PULL OUT 33,000 U.S. TROOPS OVER THE NEXT 15 MONTHS, WHILE ACKNOWLEDGING IT WAS MORE AGGRESSIVE THAN HE EXPECTED.

>> ALTHOUGH I WAS NOT A PARTICIPANT IN THOSE DISCUSSIONS, I SUPPORT THE PRESIDENT'S DECISION AND BELIEVE WE CAN ACCOMPLISH OUR OBJECTIVES. IF CONFIRMED I WILL OFFER MY CANDID ASSESSMENT TO THE CHAIN OF COMMAND ON THE CURRENT STATE OF THE CONFLICT AS WELL AS PROVIDE OPTIONS WITH RESPECT TO THE PRESIDENT'S GOALS IN ACCOMPLISHING THIS STRATEGY.

>> Sreenivasan: ALLEN ALSO SAID THE PULLOUT PLAN MEANS THE AFGHANS NEED TO URGENTLY EXPAND THE NUMBERS AND ABILITIES OF THEIR OWN SECURITY FORCES. A RESOLUTION APPROVING LIMITED U.S. MILITARY ACTION IN LIBYA ADVANCED TODAY IN THE SENATE. THE FOREIGN RELATIONS COMMITTEE ENDORSED THE MEASURE TODAY. DEMOCRAT JOHN KERRY AND REPUBLICAN JOHN McCAIN CALLED FOR AUTHORIZING U.S. INVOLVEMENT FOR ONE YEAR, BUT BARRING ANY USE OF AMERICAN GROUND FORCES. EARLIER, A TOP STATE DEPARTMENT LAWYER DEFENDED THE PRESIDENT'S ARGUMENT THAT U.S. FORCES ARE NOT ENGAGED IN ACTUAL HOSTILITIES, SO HE DOES NOT NEED CONGRESSIONAL APPROVAL. REPUBLICAN PRESIDENTIAL CANDIDATE TIM PAWLENTY IS WARNING HIS PARTY NOT TO "SHRINK" FROM WORLD LEADERSHIP. IN A SPEECH IN NEW YORK TODAY, PAWLENTY STRONGLY CRITICIZED PRESIDENT OBAMA'S HANDLING OF FOREIGN POLICY AS TIMID AND MURKY. BUT HE SAID HE IS CONCERNED THAT SOME REPUBLICANS WANT TO END THE MILITARY MISSIONS IN AFGHANISTAN AND LIBYA.

>> HISTORY REPEATEDLY WARNS US THAT IN THE LONG RUN WEAKNESS IN FOREIGN POLICY COSTS US AND OUR CHILDREN MUCH MORE THAN WE'LL EVER SAVE IN A BUDGET-LINE ITEM. AMERICA ALREADY HAS ONE POLITICAL PARTY DEVOTED TO DECLINE, RETRENCHMENT AND WITHDRAWAL. IT DOESN'T NEED A SECOND ONE.

>> Sreenivasan: HOUSE REPUBLICANS FELL SHORT LAST WEEK IN A BID TO CUT OFF FUNDING FOR THE LIBYAN OPERATION. AND JON HUNTSMAN, ANOTHER CONTENDER FOR THE PARTY'S PRESIDENTIAL NOD, HAS CALLED FOR SPEEDING UP THE U.S. WITHDRAWAL FROM AFGHANISTAN. WHITE HOUSE OFFICIALS AND TOP REPUBLICANS PLEDGED TODAY TO KEEP TALKING ON HOW TO CUT THE DEFICIT. BUT THERE WAS NO SIGN OF ANY COMPROMISE. PRESIDENT OBAMA MET MONDAY WITH SENATE LEADERS FROM BOTH PARTIES, ON RAISING THE NATIONAL DEBT CEILING. REPUBLICANS INSISTED AGAIN TODAY THEY WILL NOT ACCEPT TAX HIKES. TEXAS SENATOR JOHN CORNYN WARNED DEMOCRATS WILL PAY THE PRICE UNLESS THEY ACCEPT HUGE SPENDING CUTS.

>> OBVIOUSLY IF IT'S POSSIBLE TO DEAL WITH THE SPENDING PROBLEM AND THE ENTITLEMENT REFORMS, THAT'S OUR FIRST CHOICE BUT IF THE PRESIDENT AND HIS PARTY REFUSE TO DO THE RIGHT THING, THEN IN THE SENATE THEY'RE GOING TO BE REQUIRED TO VOTE TO RAISE THE DEBT LIMIT. WE'LL HAVE A REFERENDUM IN 2012 ON THAT DECISION.

>> Sreenivasan: IN TURN, DEMOCRATIC MAJORITY LEADER HARRY REID CRITICIZED SEVERAL REPUBLICAN PRESIDENTIAL CANDIDATES FOR SUGGESTING THE ISSUE IS NOT SO URGENT.

>> I THINK EVERYONE NEEDS TO DO A BETTER JOB OF EXPLAINING TO THE AMERICAN PEOPLE WHAT IT MEANS TO RAISE THE DEBT CEILING. WHAT THE AMERICAN PEOPLE SEEM TO THINK-- AND I CAN UNDERSTAND WHY THEY WOULD THINK THAT, BUT IT'S WRONG-- THAT THIS MEANS JUST MORE SPENDING. ALL THAT RAISING THE DEBT CEILING DOES IS INDICATE WE'RE GOING TO PAY OUR BILLS. WE ALREADY ACCRUED.

>> Sreenivasan: THE TREASURY DEPARTMENT HAS SAID THE GOVERNMENT WILL HIT THE DEBT CEILING AND RISK DEFAULT BY EARLY AUGUST. FIRE CREWS IN NORTHERN NEW MEXICO STRUGGLED TODAY AGAINST AN AGGRESSIVE WILDFIRE NEAR LOS ALAMOS. THE BLAZE HAS SPREAD ACROSS 93 SQUARE MILES IN THE MOUNTAINS ABOVE THE TOWN, AND MORE THAN 12,000 PEOPLE HAVE BEEN EVACUATED. BUT THE DIRECTOR OF THE LOS ALAMOS NUCLEAR WEAPONS LABORATORY SAID THE FACILITY REMAINED SECURE.

>> WE HAVE ANALYZED ALL OF OUR NUCLEAR FACILITIES. WE'VE ANALYZED THEM FOR FIRE. WE'VE ANALYZED THEM FOR WILD LAND FIRE. WE'VE MITIGATED THOSE RISKS. ALL OF THEM HAVE MITIGATION. AND I'M CONFIDENT, GIVEN THE TEAM THAT WE HAVE, THAT WE CAN PROTECT THOSE FACILITIES.

>> Sreenivasan: THE WILDFIRE SPAWNED A SPOT FIRE ON THE LOS ALAMOS LAB PROPERTY YESTERDAY, BUT IT WAS QUICKLY CONTAINED. SOME 34,000 JAPANESE CHILDREN WILL BE GIVEN RADIATION METERS IN ORDER TO MONITOR THE IMPACTS OF LONG-TERM EXPOSURE. THE ANNOUNCEMENT TODAY AFFECTS CHILDREN BETWEEN THE AGES OF FOUR AND 15 IN FUKUSHIMA. THE CITY IS 45 MILES FROM A NUCLEAR PLANT THAT WAS BADLY DAMAGED IN THE MARCH EARTHQUAKE AND TSUNAMI. BUT THERE HAVE BEEN RISING CONCERNS ABOUT RADIATION LEVELS. THE MONITORING PROGRAM IS SCHEDULED TO LAST FOR THREE MONTHS. THOSE ARE SOME OF THE DAY'S MAJOR STORIES. NOW, BACK TO JUDY.

>> Woodruff: NOW, THE I.M.F. GETS A NEW LEADER AT A PIVOTAL MOMENT, FOR BOTH THAT ORGANIZATION AND THE GLOBAL ECONOMY. FOR CHRISTINE LaGUARD THE MOVE FROM FINANCE MINISTER OF FRANCE TO DIRECTOR OF THE I.M.F.CAME JUST SIX YEARS AFTER SHE ENTERED FRENCH POLITICS. AT 55, SHE IS ONE OF PRESIDENT NICOLAS SARKOZY'S LONGEST SERVING MINISTERS. TODAY IN WASHINGTON THE I.M.F. EXECUTIVE BOARD CHOSE HER OVER THE MEXICAN CENTRAL BANK GOVERNOR.

>> I FEEL VERY PROUD, VERY MOVED AND JUST A LITTLE BIT SAD BECAUSE IT'S A WHOLE CHAPTER OF MY LIFE FOR FRANCE THAT I NOW HAVE TO MOVE AWAY FROM.

>> Woodruff: THE JOB BECAME OPEN AFTER DOMINIQUE WAS CHARGED WITH RAPING A HOTEL MADE IN NEW YORK. LaGUARD'S SELECTION WAS ASSURED AFTER U.S. TREASURY SECRETARY TIMOTHY GEITHNER MADE CLEAR SHE HAD AMERICAN SUPPORT. SHE WILL BE THE FIRST WOMAN TO HEAD THE I.M.F., AND THE FIRST NON-ECONOMIST. BUT HER ASCENSION COMES AS THE EUROPEAN DEBT CRISIS INTENSIFIES. A LAWYER BY TRAINING, LaGUARD WAS A KEY PLAYER LAST YEAR IN SECURING THE BAILOUT OF NEARLY $140 BILLION FOR GREECE. SHE DISCUSSED THE ISSUE WITH THE NEWSHOUR'S PAUL SOLMON LAST JULY.

>> Reporter: YOU'RE NOT WORRIED THAT THERE'S AN IMMINENT THREAT TO THE GLOBAL ECONOMY AT THE MOMENT? YOU WOULDN'T TELL ME IF YOU WERE?

>> LET ME BE MORE SPECIFIC ABOUT THIS. I BELIEVE THAT WE ARE... I WAS ASKED WHETHER IT'S THE BEGINNING OF THE CRISIS, THE MIDDLE OF THE CRISIS OR THE END OF THE CRISIS. I SAID WE ARE IN THE MIDDLE OF THE BEGINNING OF THE END. THAT'S VERY CHURCHILLIAN, BUT I REALLY MEAN WHAT I SAY. THE CRISIS HAS REALLY HIT ITS PEAK.

>> Woodruff: IN FACT THE EUROPEAN UNION AND THE I.M.F. HAVE FACED CHALLENGES IN IRELAND AND PORTUGAL AS WELL. AND NOW THE GREEK CRISIS HAS ROARED BACK TO LIFE. IT WILL ALL BE WAITING FOR LaGUARD WHEN SHE BEGINS HER FIVE-YEAR TERM AT THE I.M.F. NEXT WEEK. WE EXPLORE THE PICK OF CHRISTINE LAGARDE TO HEAD THE I.M.F. AND THE CHALLENGES SHE'LL FACE IN OFFICE WITH ESWAR PRASAD, A FORMER I.M.F. OFFICIAL WHO'S NOW AT CORNELL UNIVERSITY. HE'S ALSO A SENIOR FELLOW AT THE BROOKINGS INSTITUTION. AND SCHEHERAZADE REHMAN, DIRECTOR OF THE EUROPEAN UNION RESEARCH CENTER, AND PROFESSOR OF INTERNATIONAL FINANCE AT GEORGE WASHINGTON UNIVERSITY. IT'S GOOD TO HAVE YOU BOTH BACK WITH US AGAIN. ESWAR, LET ME BEGIN WITH YOU. REMIND US, WHAT DOES THE INTERNATIONAL MONETARY FUND DO AND WHAT'S THE JOB OF ITS DIRECTOR.

>> THE INTERNATIONAL MONETARY FUND DOES TWO THINGS. ONE, IT LENDS MONEY TO COUNTRIES IN TROUBLE. BUT MORE IMPORTANTLY IN THE NEW WORLD ECONOMY WHAT IT DOES IS IT TELLS COUNTRIES WHAT THEY SHOULD BE DOING WITH THEIR POLICIES. IT EVALUATES THEIR FINANCIAL SYSTEMS AND EVALUATES THEIR POLICIES, TALKS ABOUT WHETHER THOSE POLICIES ARE GOOD FOR THE COUNTRY BUT MORE IMPORTANTLY ALSO FOR THE GLOBAL ECONOMY WHAT IS SOMEWHAT STRANGELY CALLED SURVEILLANCE. THAT'S A KEY FUNCTION. MANAGING THAT BECOMES VERY IMPORTANT BECAUSE OF COURSE THE TECHNICAL STAFF OF THE FUND ARE VERY QUALIFIED. THEY CAN EVALUATE POLICIES AND COME UP WITH GOOD JUDGMENTS BUT ULTIMATELY THE MANAGING DIRECTOR HAS TO MAKE VERY IMPORTANT POLICY DECISIONS. SO IT CAN TELL A BIG COUNTRY LIKE THE U.S. OR CHINA WHAT IS WRONG WITH ITS POLICIES, YOU NEED SOMEBODY WHO CAN STAND UP TO THESE BIG POWERS, TELL THEM WHAT THEY'RE NOT DOING RIGHT AND BE WILLING TO TAKE THE HEAT. IT'S A VERY IMPORTANT JOB.

>> Woodruff: SCHEHERAZDE, WHY WAS SHE CHOSEN?

>> I THINK THAT IT'S IRRELEVANT THAT SHE IS THE VERY BEST CANDIDATE. WHAT'S MORE RELEVANT SHE IS THE RIGHT CHOICE FOR RIGHT NOW. IN THE MIDDLE OF A CRISIS RULE NUMBER ONE YOU DON'T MAKE A CRISIS WORSE WHEN YOU HIRE A NEW LEADER. NUMBER TWO, SHE ALSO HAPPENS TO BE WHAT WE CALL THE ROCK STAR OF CENTRAL BANKERS AND I.M.F., AND INTERNATIONAL FINANCE MINISTERS. IT'S QUITE AN UNCOLORFUL GROUP. SHE STANDS OUT. THE MEDIA LOVES HER.

>> Woodruff: BECAUSE SHE'S A WOMAN.

>> SHE'S A WOMAN AND SHE HAS CHARISMA. THE MARKET INFLUENCE IS THERE. IT'S A VERY HANDY TOOL THESE DAYS TO HAVE WHEN THE MEDIA DOES LISTEN TO YOU AND YOU CAN TAKE ADVANTAGE OF THAT. AND LASTLY, IN THE AFTERMATH OF THE SCANDAL, THIS IS NO BETTER TIME THAN TO HAVE THE FIRST FEMALE DIRECTOR OF THE I.M.F..

>> Woodruff: DID SHE HAVE ANY STRIKES AGAINST HER? DID SHE HAVE ANY NEGATIVES GOING INTO THIS CONTEST, ESWAR?

>> THE PROCESS I THINK IS WHAT PEOPLE HAVE NOT LIKED. THERE WAS A SENSE THAT THE BIG POWERS, EUROPE AND THE U.S., AGREED THAT THE EMERGING MARKETS WOULD HAVE A FAIR SHOT AT THE JOB. THEY DID NOT HAVE A FAIR SHOT BECAUSE EUROPE CLAIMED THE JOB UP FRONT AND GARNERD A LOT OF SUPPORT INCLUDING FROM THE U.S. THE OTHER ISSUE IS HOW SHE WILL TREAT THE EUROPEAN DEBT CRISIS WHICH WILL BE THE FIRST PROBLEM THAT LANDS ON HER PLATE. THERE IS A QUESTION WHETHER SHE CAN ACT AS THE HEAD OF THE I.M.F.AS AN OBJECTIVE PARTY RATHER THAN COME INTO THE JOB WITH THE BAGGAGE SHE NOW HAS HAVING BEEN THE FRENCH FINANCE MINISTER.

>> Woodruff: SCHEHERAZDE, IT WAS FELT BY THE COUNTRIES THAT SUPPORTED HER THAT SHE WOULD BE ABLE TO DO THAT.

>> SHE WOULD ACTUALLY BE ABLE TO DO THE JOB. BUT THE STRIKES THAT ARE AGAINST HER ARE THREE FOLD. SHE'S FRENCH. THERE'S BEEN A LONGSTANDING MOVE THAT PERHAPS A NON-EUROPEAN SHOULD BE RUNNING THE I.M.F., BUT THE TIMING IS ALL OFF. WE HAVE A GREEK CRISIS ON OUR HANDS. THE U.S. PUSHED VERY HARD FOR THIS BECAUSE OUR VIEW IS THIS. WE WANT THE EUROPEANS TO FIX THE GREEK PROBLEM. WE WANT IT TO GO AWAY. WE WANT IT TO GO QUICKLY.

>> Woodruff: WE BEING?

>> THE UNITED STATES. UNFORTUNATELY LaGUARD IS PART OF THE OLD CREW MANAGING THIS CRISIS FOR THE LAST 18 MONTHS. AND IT'S BEEN MANGLED. WE WERE SITTING HERE A YEAR AGO AND THIS WAS THE BEGINNING OF A CRISIS AND IT'S ESCALATED. IT HASN'T BEDDED DOWN IN ANY WAY WHATSOEVER. SO SHE'S PART OF THAT.

>> Woodruff: WHY WASN'T THAT A KNOCK ON HER?

>> BECAUSE WE ARE... FROM THE UNITED STATES' POINT OF VIEW WE WANT THE GREEK CRISIS SOLVED. SHE CAN DO IT. THE I.M.F.HAS A LOT OF INFLUENCE IN THIS PROCESS.

>> Woodruff: WHAT'S HER IMMEDIATE CHALLENGE. ESWAR, DIRECT? WHAT DOES SHE NEED TO DO IN THE NEAR TERM TO GET THAT RESULT? I MEAN THERE IS SOMETHING IN MOTION RIGHT NOW. THEY'RE TAKING VOTES IN GREECE WHICH WILL DETERMINE WHETHER THEY GET THIS MONEY THAT THEY NEED RIGHT AWAY.

>> THE REAL PROBLEM IN EUROPE IS THAT HASN'T BEEN UNIFIED FORCES WITHIN EUROPE TO COME UP WITH A COMMON PLATFORM. THERE'S BEEN A TREMENDOUS AMOUNT OF DISSENSION WITHIN EUROPE ITSELF. WE'VE SEEN IT PLAY OUT ON THE PAGES OF NEWSPAPERS IN TERMS OF PUBLIC STATEMENTS. THAT'S NOT HELPING MARKETS VERY MUCH. I THINK WHAT THE IMF NEEDS TO FORCE THE EUROPEANS TO DO IS COME UP WITH A UNIFIED POSITION BUT MORE IMPORTANTLY WRECK OOG NAZ THE REALITY OF THE SITUATION. NUMBER ONE, RESTRUCTURING IS GOING TO BE NEEDED SOONER OR LATER. SECOND, PRIVATE FINANCING IS NOT GOING TO HAPPEN. ONCE THIS REALITY SETS IN, THEN WE CAN FIGURE OUT HOW TO DEAL WITH THE GREEK DEBT CRISIS IN A WAY THAT IT DOESN'T SPILL OVER INTO OTHER COUNTRIES AND CAUSE A MUCH BIGGER PROBLEM BUT I THINK EUROPE IS STILL NOT FULLY RECOGNIZING THESE REALITIES OR DOESN'T HAVE THE POLITICAL WILL TO DEAL WITH THEM.

>> Woodruff: HOW IS IT EXPECTED SHE'S GOING TO GO ABOUT CHANGING MINDS?

>> VERY DELICATELY BECAUSE YOU HAVE TO UNDERSTAND THAT THERE IS THIS ISSUE OF PERCEIVED OBJECTIVITY IN ALL OF THIS. THERE'S A LARGE NUMBER OF FRENCH BANKS WHICH ARE EXPOSED TO THE GREEK CRISIS. THERE'S A LOT OF OTHER THINGS HAPPENING. SHE HAS IN THE PAST OPPOSED A FULL RESTRUCTURING WHERE THE I.M.F.BELIEVES THAT A RESTRUCTURING MUST HAPPEN. NOW SHE HAS TO DO A U-TURN. THIS IS GOING TO BE A LITTLE BIT OF FANCY FOOT WORK ON HER PART TO BE ABLE TO SORT OF PULL THIS OFF.

>> Woodruff: WHAT SPECIFICALLY THOUGH, ESWAR, IS SHE GOING TO NEED TO DO IN THE COMING WEEKS? BECAUSE EVERYBODY BELIEVES OR THE PERCEPTION IS THAT GREECE IS ON THE PRECIPICE RIGHT NOW. THE DECISIONS HAVE TO BE TAKEN VERY QUICKLY.

>> IT'S AN ALL IMPORTANT MEETING COMING UP TO SEE HOW GREECE ITSELF WILL DEAL WITH THE ISSUE. EVEN IF THE VOTE IS POSITIVE IN TERMS OF THE GOVERNMENT, THE QUESTION IS WHETHER THE STREETS OF GREECE ARE GOING TO REMAIN CALM AT THIS END OF THIS AND ACCEPT THIS. THE SECOND ISSUE IS HOW EUROPE ACTUALLY COMES ON BOARD IN TERMS OF ITS PLAN BECAUSE THE PLAN THAT HAS JUST BEEN FLOATED BY FRANCE, IN FACT, IS ESSENTIALLY GOING TO REQUIRE A RESTRUCTURING OF THE DEBT. BUT THIS IS NOT QUITE GOING TO BE ENOUGH IN TERMS OF THE OVERALL PACKAGE. SO BASICALLY AS AN INDEPENDENT AND OBJECTIVE OBSERVER, WHICH SHE WOULD BE AS THE HEAD OF THE I.M.F., I THINK SHE'S GOT TO MAKE A COMMITMENT OR SHE'S GOT TO GET THE EUROPEANS TO MAKE THE COMMITMENT TO THE I.M.F.AND TO THE INTERNATIONAL COMMUNITY THAT EUROPE WILL STAND BEHIND GREECE AND IS WILLING TO GUARANTEE SOME OF THESE DEBTS BECAUSE I THINK THAT'S REALLY INEVITABLE GIVEN THE CIRCUMSTANCES RIGHT NOW.

>> Woodruff: WILL SHE GET, SCHEHERAZDE, SOME SORT OF PRESUMPTION OF SUCCESS BECAUSE SHE'S NEW ON THE JOB AND BECAUSE THIS NEEDS TO HAPPEN OR HOW DO YOU SEE THAT?

>> WELL, SHE UNDERSTANDS THE SITUATION INTIMATELY. THAT HELPS ENORMOUSLY BUT I THINK WITH THE I.M.F.NOW BEHIND HER, SHE CAN USE HER NEW-FOUND POWER TO PUSH THE GERMANS TO A BETTER COMPROMISE. THE GERMANS ARE THE ONES THAT ARE PUSHING VERY HARD FOR THE AUSTERITY PACKAGES AND THE PRIVATIZATION THAT THE GREEKS ARE NOW ON THE STREETS RIOTING ABOUT. I THINK SOME KIND OF COMPROMISE IS MUCH MORE LIKELY NOW IN A MUCH SPEEDIER FASHION WITH HER AT THE HELM OF THE IMF.

>> Woodruff: HOW DO YOU SEE HER LONGER-TERM CHALLENGES?

>> I THINK WE KNOW SHE WILL BE ABLE TO MANAGE THE EUROPEAN CRISIS. IT'S HOW SHE MANAGES THE REST OF THE WORLD, ASIA, THE BRIT COUNTRIES IN TERMS OF WHAT COMES DOWN THE ROAD WITH CURRENCY CRISES DOWN THE ROAD.

>> Woodruff: AND HOW DO YOU SEE THAT IN TERMS OF HER LONG- TERM CHALLENGES, ESWAR?

>> THE BIG LONG-TERM CHALLENGE FOR HER IS TO BRING THE EMERGING MARKETS BACK ON BOARD BECSE THERE ARE TWO THINGS THAT HAVE CONVINCED THE EMERGING PARKTS ONCE AGAIN. THE U.S. AND EUROPE LED INSTITUTION AND ONE THAT LOOKS TO THE INTERESTS OF THOSE PARTIES. THE SELECTION PROCESS THAT HAS THE RESULT OF HEROINING. IN ADDITION THE WAY GREECE IS BEING TREATED. SHE REALLY NEEDS TO REBUILD THE TRUST OF THE EMERGING MARKETS AND CONVINCE THEM THAT THEY HAVE A SERIOUS STAKE IN THE INSTITUTION. THERE IS A WAY TO DO IT. NUMBER ONE, CARRY ON WHAT HER PREDECESSOR DID WHICH IS PUT IN PLACE REFORMS.

>> Woodruff: STRAUSS KAHN.

>> TO PUT IN PLACE REFORMS AND GIVE THE EMERGING... IT NEEDS TO BE DONE QUICKLY. SHE CAN PUT IN PLACE A PROCESS THAT MAKE SURE IT HAPPENS WITHOUT POLITICAL BATTLES IN THE FUTURE AND ENSURE A MORE ORDERLY AND MORE COMPETITIVE POSITION.

>> Woodruff: SCHEHERAZDE GIVEN WHAT HAPPENED WITH STRAUSS KAHN, HOW MUCH DAMAGE HAS BEEN DONE TO THE IMF AT THIS TIME WHEN SO MANY SEEM TO BE LOOK TO GO THE IMF TO SOLVE THESE PROBLEMS?

>> I THINK THE IMF IS EMBARRASSED. AND THE VIEW FROM THE OUTSIDE MARKETS ARE... IS THAT THEY'RE SLIGHTLY DISTRACTED BECAUSE THEY HAVEN'T HAD ANYBODY AT THE HELP MANY RIGHT NOW. NOW WITH HER COMING IN, I THINK THAT WILL BE TAKEN AWAY. SHE WILL GARNER THE LIMELIGHT. SHE WILL LEAD THEM THROUGH THE CRISIS. AND, YOU KNOW, I WOULD ADD ONE MORE THING ABOUT HER FUTURE ROLE IN THE IMF. PERHAPS THE IMF'S ABILITY TO GIVE US A RED FLAG ABOUT FUTURE CRISES BEFORE THEY HAPPEN AS OPPOSED TO DURING AND AFTER. THE IMF HAS REALLY NOT BEEN ON THE TOP OF ITS GAME WHEN IT COMES TO IDENTIFYING CRISES WELL IN ADVANCE.

>> Woodruff: ARE YOU REFERRING TO GREECE?

>> I'M REFER TO GO THE UNITED STATES.

>> Woodruff: HITTING HOME.

>> THAT'S RIGHT.

>> Woodruff: SCHEHERAZDE REHMAN, ESWAR PRASAD, WE THANK YOU BOTH.

>> THANK YOU.

>> THANK YOU.

>> Ifill: NEXT, SOME GEE-WHIZ TECHNOLOGY THAT'S CHANGING LIVES FOR PEOPLE WITH SERIOUS DISABILITIES. NEWSHOUR SCIENCE CORRESPONDENT MILES O'BRIEN TELLS THE STORY.

>> I'M STABLE, CONFIDENT, FEELING TALL.

>> Reporter: THERE'S A LOT OF PAIN AND SADNESS BEHIND THAT STUBBORN SMILE. 19 YEARS AGO AMANDA BOXTELL TOOK A BAD FALL SKIING, NEVER TO WALK AGAIN. UNTIL NOW. AMANDA IS AMONG THE FIRST PAIR A PLEGICS TO TRY HER LEGS AS A TEST PILOT ON A SOPHISTICATED EX-OWE SKELETON CALLED E-LEGS. IT ALLOWS HER TO STAND TALL AND WALK. IT'S NOT ABOUT SPEED.

>> NO, IT'S NOT ABOUT SPEED. I MEAN, YES, I'D LOVE TO BE ABLE TO HAVE THE RUN MODE WORKING. THEY WOULDN'T BE ABLE TO CATCH ME. I'D RUN OUT OF THIS BUILDING AND KEEP GOING.

>> Reporter: THE E-LEGS GOT TO AMANDA ON THE BACKS OF SOME ABLE-BODIED SOLDIERS. THE PENTAGON FUNDED THE RESEARCH AND DEVELOPMENT TO MAKE IT POSSIBLE FOR TROOPS TO HIKE LONGER AND FASTER WHILE CARRYING MUCH MORE. LIFE IMITATING ART? IRONMAN FAN AND BIOI CAN CEO HOPES TO HAVE E-LEGS AVAILABLE TO TAKE HOME IN THREE YEARS, SELLING FOR ABOUT $50,000. HE MARVELS AT HOW TECHNOLOGY HAS MARCHED TOWARD THIS MOMENT. HE SAYS IT FEELS LIKE THE COMPUTER REVOLUTION OF THE '70s.

>> THE TECHNOLOGY IS COMING TOGETHER JUST LIKE SEMI-CONDUCTORS AND SO ON WERE HAPPENING IN THE EARLY '70s. AND SOFTWARE AND SO HAPPENED AT THAT TIME. SUDDENLY THIS IS POSSIBLE.

>> Reporter: BUT HOW? THE VICE PRESIDENT OF ENGINEERING EXPLAINS IT TO ME. THESE ARE THE BATTERIES AND THIS IS THE ACTUAL COMMUTER. THE COMPUTER TAKES IN DATA FROM SENSORS ON THE KNEES, HIPS AND ARMS AND ON TIPS OF THE CRUTCHES AND SDITEDZ IF IT'S OKAY TO TAKE A STEP.

>> THE COMPUTER ACTS AS... HAS VETO POWER. AMANDA COULD SAY GIVE ME A STEP. IF THERE'S SOMETHING THAT'S NOT REALLY PARTICULAR, THE MACHINE WILL NOT TAKE A STEP.

>> Reporter: SO THESE SMALL STEPS ARE REALLY A GIANT LEAP IN THE BURGEONING WORLD OF BIONICS, THAT IS, THE FUTURE OF BIOLOGY AND ELECTRONICS.

>> STEVE AUSTIN, ASTRONAUT.

>> Reporter: YOU REMEMBER WHEN YOU LIKELY FIRST HEARD THAT WORD, RIGHT?

>> WE CAN REBUILD HIM. WE HAVE THE TECHNOLOGY. WE CAN MAKE HIM BETTER THAN HE WAS.

>> Reporter: SO WE'RE TALKING ABOUT THE $6 MILLION MAN, RIGHT?

>> THE THING THEY GOT MOST WRONG WAS THE COST.

>> Reporter: INVENTOR DEAN KAINE OF SEGWAY FAME IS HELPING PUSH AN EXPLOSION IN THE WORLD OF BIONICS. SO WANT TO PUT A PRICE TAG ON WHAT IT WILL BE?

>> ACCOUNTING FOR THE INFLATION OF THE WORLD OF SCIENCE FICTION, $6 BILLION MAN IS PROBABLY CLOSER TO WHAT WILL HAVE BEEN SPENT ON THESE VARIOUS DEVICES.

>> Reporter: HE IS FOCUSED ON THIS AMAZING BIONIC DEVICE, AN ARTIFICIAL ARM BRIMMING WITH BATTERIES AND SILICON THAT CREATES 10 POWER DEGREES OF FREEDOM AND COMES A LOT CLOSER TO A HUMAN ARM THAN THE BODY- POWERED SPLIT HOOK DEVICES THAT WERE THE ONLY PROSTHETIC OPTION FOR ARM AMP UWE TEES FOR SO MANY YEARS. KAINE CALLS HIS ARM LUKE A NOD TO THIS SCENE FROM THE STAR WARS SERIES. OF COURSE THE REAL THING DOESN'T MEASURE UP TO THE SILVER SCREEN SCIENCE FICTION.

>> I DON'T KNOW ANYBODY TODAY THAT WOULD SAY, YEAH, I'D RATHER HAVE YOUR ARM THAN THE ORIGINAL EQUIPMENT. WE'RE NOT THERE YET. ALMOST EVERY PHYSICAL CAPABILITY YOU HAVE IN YOUR BODY, THERE'S SOME AK YATOR THAT CAN DO IT BETTER. I THINK THOSE SYSTEMS WILL EVENTUALLY BECOME PART OF PEOPLE IN PROSTHETIC DEVICES THAT THEY EITHER WEAR OR HAVE EMBEDDED. THAT WILL JUST BE THE NATURAL PROGRESSION OF TECHNOLOGY.

>> Reporter: KAINE'S ARM IS ALSO FUNDED BY THE PENTAGON. THE GOAL? TO IMPROVE THE LIVES OF WOUNDED WARRIORS, PEOPLE LIKE GLEN LEHMAN WHO LOST HIS RIGHT ARM IN A GRENADE ATTACK IN IRAQ IN 2008. YOU DIDN'T KNOW MUCH ABOUT THE STATE OF THE ART OF PROSTHETICS BEFOREHAND, RIGHT?

>> I HAD NO IDEA. I'M THE FIRST ARM AMP UWE TEE I'VE EVER MET.

>> Reporter: HE'S AN EXPERT NOW AND ONE OF ONLY 50 AMP UWE TEES IN THE WORLD WHO CAN DO THIS SIMPLY BY THINKING ABOUT IT. WHAT DID YOU DO?

>> I THOUGHT ABOUT LIFTING MY ARM UP JUST LIKE YOU WOULD THINK ABOUT RAISING YOUR ARM OR LOWERING YOUR ARM.

>> Reporter: IT'S THAT NATURAL.

>> IT'S THAT NATURAL.

>> Reporter: LEHMAN CAN PERFORM THIS MAGIC AFTER UNDERGOING BREAKTHROUGH SURGERY CALLED TARGETED MUSCLE REINNOVATION PIONEERED HERE AT THE REHABILITATION INSTITUTE OF CHICAGO BY THIS DOCTOR.

>> THE IDEA OF TARGETED RENERVEATION IS THAT EVEN THOUGH WE LOSE OUR ARM THE NERVES THAT USED TO GO TO THE ARM ARE STILL THERE. THEY CARRY MOTOR COMMAND SIGNALS TO TELL THE ARM WHAT TO DO.

>> Reporter: THE FIRST PERSON TO GET THE SURGERY IN 2001, DOUBLE AMP UWE TEE JESSE SULLIVAN HAD THE NERVES THAT CONTROLLED THE BASIC FUNCTION OF HIS ARM ATTACHED TO HIS CHEST MUSCLES. SO WHEN HE THOUGHT ABOUT MOVING HIS MISSING ARM....

>> THE SIGNAL WAS SENT DOWN AND THE CHEST MUSCLE CONTRACTS. WHEN THE CHEST MUSCLE CONTRACTS IT NEEDED A LITTLE BIT OF ELECTRICITY. WE CAN RECORD THAT WITH LITTLE ANTENNAS OR ELECTRODES.

>> Reporter: THE ELECTRODES DETECT THE TINY ELECTRICAL CURRENT. THEY ARE LINKED TO A COMPUTER IN THE ARM WHICH MOVES THE AK YATORS.

>> THE KEY THING IS TO BE ABLE TO CONTROL EVEN WHAT WE'VE GOT. NO ONE HAS MADE THESE UNTIL RECENTLY BECAUSE WE NEVER HAD A WAY TO CONTROL THEM.

>> Reporter: NOW YOU CAN.

>> NOW WE CAN.

>> Reporter: BUT WHAT IF YOU CAN ELIMINATE THE NERVES AND THE MUSCLES ALTOGETHER AND TAP DIRECTLY INTO THE BRAIN TO CONTROL THE BIONIC LIMB? THAT IS WHAT THIS MONKEY IS DOING HERE AT THE UNIVERSITY OF PITTSBURGH. TINY ELECTRODES ARE IMPLANTED IN HIS BRAIN THAT CAN DETECT WHEN NEURONS ARE FIRING. DR. ANDREW SWARTZ IS TRYING TO DECIPHER THE PATTERNS OF BRAIN ACTIVITY RELATED TO ARM MOVEMENT IN ORDER TO MAKE BETTER BIONIC LIMBS.

>> SO THE MONKEY WILL DRAW AN OVAL. YOU'LL SEE THAT HE GOES UP WITH HIS HAND.

>> Reporter: THESE OBSERVATIONS ARE FED INTO A FORMULA OR A MODEL THAT ESSENTIALLY TRANSLATES THE LANGUAGE OF THE BRAIN INTO SOMETHING A COMPUTER UNDERSTANDS. MAKING IT POSSIBLE FOR THE MONKEY TO MOVE A ROBOTIC ARM THE SAME WAY HE WOULD MOVE HIS OWN BY THINKING ABOUT IT. EVENTUALLY SWARTZ WOULD LIKE TO MAKE THE LINK BETWEEN MIND AND MECHANICAL ARM A TWO-WAY STREET.

>> EVENTUALLY WE'RE GOING TO TAKE THE INFORMATION THAT'S BEING TRANSDEUCED AT THE FINGER TIPS AND FEED IT BACK TO THE BRAIN.

>> Reporter: IT REALLY COULD GIVE SOMEONE WHO IS MISSING A LIMB SOMETIME IN THE DISTANT FUTURE A SENSE OF TOUCH.

>> THAT'S RIGHT.

>> Reporter: WOW. SWARTZ WILL SOON BEGIN TRIALS ON HUMANS WITH PARALYSIS AS THEY HAVE HERE AT BROWN UNIVERSITY WHERE THOSE TINY ELECTRODES WERE IMPLANTED IN THE BRAINS OF A HANDFUL OF PARALYZED PEOPLE. MAKING IT POSSIBLE FOR SOMEONE WHO IS SHUT IN TO MOVE A MOUSE OR A WHEELCHAIR JUST BY THINKING ABOUT IT. JOHN DONAHUE LEADS THE SO-CALLED BRAIN-GATE STUDY. HIS LONG-TERM GOAL? TO BY-PASS THE ROBOTICS ENTIRELY.

>> WE ENVISION THAT THIS TECHNOLOGY WILL ONE DAY GO TO A POINT WHERE WE'LL REWIRE PEOPLE AND ALLOW THEM TO HAVE THEIR BRAIN SIGNALS HOOKED BACK UP TO THEIR BODY CONTROLLING THEIR OWN MUSCLES. IF IT'S ALL IMPLANTED INSIDE THE BODY WE KNOW THAT THOSE PEOPLE WILL BE ABLE TO CARRY OUT CERTAIN FUNCTIONS WITHOUT YOU DETECTING THAT THEY HAVE ANY KIND OF TECHNOLOGY ON THEM AT ALL.

>> Reporter: IT'S ON THE INSIDE. PARTIALLY DEAF SINCE BIRTH, MICHAEL LOST ALL OF HIS HEARING TEN YEARS AGO IN THE SPAN OF FOUR HOURS. WITHIN MONTHS HIS BRAIN WAS IMPLANTED WITH COCHLEAR IMPLANTS. COMPUTERS THAT DECIPHER SOUND INTO SIGNALS HIS BRAIN COULD DETECT AND HE COULD COMPREHEND. THE EXPERIENCE PROMPTED HIM TO WRITE WORLDWIDE MIND WHICH EXPLORES THE MELDING OF MIND AND MACHINE BUT COUNT HIM SKEPTICAL.

>> I THINK THERE IS A LOT OF MISPLACED OPTIMISM AT THIS POINT. WHAT I MEAN BY MISPLACED OPTIMISM IS THE ASSUMPTION THAT WE WILL SOON AND EASILY BE ABLE TO REPLACE DAMAGED AND DISABLED BODY PARTS. THERE IS NO REASON WHY THIS CAN'T BE DONE BUT SCIENCE FICTION MAKES IT LOOK LIKE IT'S EASY AND IT'S NOT.

>> Reporter: IN THE MEANTIME PEOPLE LIKE KATHY BLAKE WILL GLADLY TAKE WHAT SCIENCE AND TECHNOLOGY CAN PROVIDE.

>> WHEN I DON'T HAVE THE GLASSES ON I REALLY DON'T SEE ANYTHING.

>> Reporter: SHE IS ONE OF ABOUT 40 PEOPLE IN THE WORLD WITH BIONIC EYESIGHT. A CAMERA IN THE GLASSES GATHERS THE IMAGE. IT GETS FED INTO A SMALL COMPUTER WHICH SENDS A WIRELESS SIGNAL TO TINY ELECTRODES IMPLANTED ON THE RETINA. THEY STIMULATE THE REMAINING NERVE CELLS SENDING THE VISUAL IMAGES TO THE BRAIN. AND THAT LITERALLY MEANS FIRE WORKS ON THE FOURTH OF JULY FOR KATHY BLAKE.

>> I'M ALMOST SPEECHLESS WHEN I SAW THE FIREWORKS I WAS REALLY JUST MESMERIZED WATCHING IT. JUST NOT BELIEVING THAT I COULD ACTUALLY SEE THAT.

>> Reporter: SO WHAT HAPPENS TO OUR HUMANITY AS WE EQUIP OUR BODIES WITH ALL THESE MAN- MADE PARTS? DR. MARK OF U.S.C.LEADS THE TEAM PUSHING THIS BIONIC VISION TECHNOLOGY.

>> I THINK INSTEAD OF US BECOMING MORE MACHINES, WHAT THESE MACHINES DO IS ACTUALLY MAKE US MORE HUMAN. IN FACT ONE OF OUR PATIENTS TOLD US THAT. THIS DEVICE ALLOWS ME TO INTEGRATE MORE, TO BE ABLE TO PLAY WITH MY GRANDSON AND ALLOWS ME TO BE MORE HUMAN.

>> Reporter: OR IS IT SUPER HUMAN? INDEED, THE PROSTHETIC LIMB SOUTH AFRICAN SPRINTER OSCAR WEARS ARE SO ADVANCED HE FACES ACCUSATIONS HE HAS AN UNFAIR ADVANTAGE AS HE PETITIONS TO COMPETE IN THE 2012 OLYMPICS.

>> IT'S ABOUT PEOPLE THROWING OFF THE SHACKLES OF HISTORY SAYING THAT SOME PEOPLE ARE LESS.

>> Reporter: AMY WAS AMONG THE FIRST DOUBLE AMP TEES TO SUCCESSFULLY COMPETE IN NCAA DIVISION ONE SPORTS. SHE RAN TRACK AT GEORGETOWN. SHE SAYS THOSE CARBON CHEAT A RUNNING LEGS ARE NO DIFFERENT THAN CARBON GOLF CLUBS, TITANIUM BICYCLES OR SURGERY. ALL OF IT CAN IMPROVE HUMAN PERFORMANCE.

>> THERE IS NO SUCH THING AS A LEVEL PLAYING FIELD IN ANY SPORT.

>> Reporter: BUT WHERE NATURE OR MISFORTUNE HAS TAKEN SOMETHING HUMAN AWAY, HUMANS MAY BE ON THE VERGE OF FINDING WAYS NOT JUST TO REPLACE WHAT IS LOST BUT TO DO BETTER. JUST LIKE THE BIONIC WOMAN OR THE $6 MILLION MAN.

>> THAT MUSIC WOULD COME ON. AND, YOU KNOW, SEEING HER LEAP OVER, YOU KNOW, FENCES AND HIM BEING ON THE OPERATING TABLE WITH THAT SOMBER VOICEOVER SAYING WE CAN REBUILD HIM. IT'S LIKE AH! YES, THEY CAN. OF COURSE I HAD HAD MY WOODEN LEGS AT THE TIME WITH THE BIG LEATHER CUFF. NOTHING TECHNOLOGICALLY SEXY AT ALL BUT I KNEW IT WAS POSSIBLE. AND IT IS NOW. IT'S BECOMING POSSIBLE.

>> Reporter: DEAN KAINE RECENTLY MADE AMY HIGH-TECH SWIM FINS THAT WOULD LET HER LEAVE OTHER FLEETS IN HER WAKE. WHO IS ABLE AND WHO IS DISABLED? IS SHE MORE OR LESS OR SUPER HUMAN? AND HOW CAN I GET SOME FINS LIKE THAT?

>> Ifill: THE SUPREME COURT WRAPPED UP ITS FINAL CASES YESTERDAY, COMPLETING A YEAR OF ACTION IN WHICH ITS CONSERVATIVE MAJORITY LEFT A SIGNIFICANT LEGAL MARK. IN SEVERAL INSTANCES, THE HIGH COURT FAVORED BUSINESSES OVER CONSUMERS AND EMPLOYEES, MOST NOTABLY IN THROWING OUT A CLASS- ACTION LAWSUIT AGAINST WAL-MART. IT WAS ALSO A BIG FREE SPEECH TERM FOR THE COURT, AS JUSTICES VOTED TO ALLOW PROTESTS AT MILITARY FUNERALS, ROLL BACK CAMPAIGN FINANCE LAWS, AND REJECT A BAN ON VIOLENT VIDEO GAMES. HERE NOW FOR A LOOK AT THE ROBERTS COURT, NEWSHOUR REGULAR MARCIA COYLE OF THE "NATIONAL LAW JOURNAL" AND TOM GOLDSTEIN, FOUNDER OF THE WEB SITE scotus-blog.com. WE CAN DIVIDE THIS YEAR UP IN A PRETTY BIG CHUNKS. STARTING WITH THE FREE SPEECH CASES, MARCIA, HOW SIGNIFICANT WERE THEY IN MOVING THE BALL?

>> OKAY. THERE WERE FOUR CASES THAT I THINK YOU RECALL WERE FIRST AMENDMENT CASES. THAT SEEM LIKE A LARGE NUMBER BUT THIS COURT HAS HAD GENERALLY BETWEEN TWO TO THREE FIRST AMENDMENT CASES ALMOST EVERY TERM IN RECENT YEARS. THIS COURT IS ALSO A VERY STRONG FIRST AMENDMENT SPEECH COURT. PUT ASIDE FOR A MOMENT THE CAMPAIGN FINANCE CASES. GENERALLY YOU WILL FIND JUSTICES ON BOTH SIDES OF THE IDEOLOGICAL DIVIDE, PROTECTIVE OF SPEECH UNDER THE FIRST AMENDMENT. THREE OF THE CASES YOU MENTIONED THE MILITARY TEST, THE VIOLENT VIDEO GAME CASE AND THEN ANOTHER CASE THAT... WHICH I THINK IS IS A VERY SIGNIFICANT CASE. IT INVOLVED THE COURT'S FIRST DATA MINING VENTURE HERE. THE COURT LOOKED AT A VERMONT LAW THAT PROHIBITED PHARMACIES FROM SELLING DOCTORS' PRESCRIPTIONS, PRE-SCRIPTING INFORMATION TO DRUG COMPANIES AND DATA MINING COMPANIES. IT SHOWED, I THINK, THAT IF YOU CAN FIT YOUR CHALLENGE, YOUR CLAIM INTO A BOX FOR THE SUPREME COURT THAT SAYS THIS IS A REGULATION OF SPEECH OR A RESTRICTION OF SPEECH, YOU'RE GOING TO FIND A IMAGINE MAJORITY ON THIS COURT COMING DOWN VERY MUCH IN FAVOR OF THE FIRST AMENDMENT. TOM WAS ABLE TO DO THAT, BY THE WAY. HE ACTUALLY ARGUED THAT CASE SUCCESSFULLY. I KNOW HE CAN TALK ABOUT ITS RAMIFICATIONS.

>> Ifill: WHY DON'T YOU DO THAT?

>> WELL IT'S A CASE ABOUT SPEECH BY BUSINESSES. SO IN AN ERA IN WHICH THERE'S MORE AND MORE COMPANIES INVOLVED IN SHARING MORE AND MORE INFORMATION LOTS OF PRIVACY CONCERNS. IT WAS THE COURT'S FIRST FOR AINTO THAT BALANCE. THE SUPREME COURT SAID WE ARE REALLY EARN CANNED ABOUT PRIVACY BUT WE WON'T LET THE GOVERNMENT PICK AND CHOOSE WHO IS GOING TO SPEAK. IF THE GOVERNMENT IS GOING TO ALLOW SOME, IT'S GOING TO USE THE INFORMATION ITSELF TO TALK TO DOCTORS THEN COMPANIES HAVE TO BE ABLE TO TALK TO DOCTORS TOO. WE'RE GOING TO SEE A LOT MORE OF THESE CASES OVER THE YEARS AS THERE'S MORE AND MORE TECHNOLOGY, MORE AND MORE USES OF INFORMATION AND THE GOVERNMENT TRYING TO REGULATE COMPANIES AND ALSO TO PROTECT PRIVACY AT THE SAME TIME.

>> Ifill: EVEN INFORMATION THAT MANY PEOPLE MIGHT FIND OBJECTIONABLE AS IN THE CASE OF THESE MILITARY FUNERALS OR IN THE CASE WE TALKED ABOUT LAST NIGHT OF THE VIOLENT VIDEO GAMES, THE COURT WOULD STILL ERR ON THE SIDE OF FREE SPEECH.

>> WHAT'S ALSO VERY INTERESTING, GWEN, IS AS TOM SAID IS THE COURT IS BEING DRAWN MORE AND MORE INTO LOOKING AT FIRST AMENDMENT, PRIVACY RIGHTS AND THE NEW TECHNOLOGY, THE VIOLENT VIDEO GAME WAS A GOOD EXAMPLE OF THAT. AND NOT ONLY UNDER THE FIRST AMENDMENT BUT NEXT TERM THE COURT ALREADY HAS TAKEN A CASE UNDER THE FOURTH AMENDMENT THAT HAS TO DO WITH F.B.I. AGENTS PUTTING G.P.S. TRACKING DEVICE ON A CAR FOR LONG-TERM SURVEILLANCE AND WHETHER THAT REQUIRED A WARRANT WHICH THEY DID NOT HAVE. SO THE NEW AND EMERGING TECHNOLOGY IS COME TO GO THE COURT MORE AND MORE. I DID PUT ASIDE THE CAMPAIGN FINANCE CASES BECAUSE THEY ARE UNDER THIS COURT I'D SAY RIGHT NOW I BELIEVE THE ROBERTS' COURT HAS REJECTED CAMPAIGN FINANCE REGULATION IN FIVE CASES. IT HAS BEEN ALMOST ALWAYS BY 5-4 DECISIONS. YOU HAVE A VERY CLEAR DIVISION OF HOW THE JUSTICES VIEW CAMPAIGN FINANCE REGULATION AND THE ROLE OF MONEY IN ELECTIONS. THE CONSERVATIVE MAJORITY SEES MONEY AS SPEECH WHEREAS THE MORE LIBERAL WING OF THE COURT SEES MONEY AS MONEY. AND CAN BE REGULATED.

>> Ifill: NOT CHANGING. THIS COURT HAS A REPUTATION, TOM, OF BEING PRO BUSINESS. NOT LEAST OF WHICH BECAUSE OF THE WAL-MART CASE AND AT&T CLASS ACTION CASE WHICH... IN BOTH CASES THE CORPORATIONS BENEFITED. IS THAT A FAIR RAP ON THE COURT?

>> THE COURT HAD ABOUT 35 OR SO CASES THAT IMPLICATE THE BUSINESS COMMUNITY THIS TERM. AND THE BUSINESS COMMUNITY WON 20 OF THOSE. SO IT'S NOT OVERWHELMING. THEY WON PROBABLY THE MOST IMPORTANT CASES, THE ONES THAT YOU MENTIONED ABOUT CLASS ACTIONS. BUT TO TAKE A COUNTEREXAMPLE, THE SINGLE BIGGEST CIVIL RIGHTS CASE OF THE TERM, THE EMPLOYEE WON WHERE THE COURT SAID THAT IF AN EMPLOYEE IN A BIG COMPANY IS THE VICTIM OF DISCRIMINATION BY A SUPERVISEOR, YOU CAN SUE THE COMPANY. THAT WAS A BIG FIGHT IN CIVIL RIGHTS LAW.

>> Ifill: IS THAT SOMETHING WHICH MAKES PEOPLE THINK THAT MAYBE THE COURT IS OPEN IN SPECIFIC CASES TO PERHAPS OTHER KINDS OF CIVIL RIGHTS CHALLENGES?

>> I THINK THAT'S RIGHT. EMPLOYEES HAVE, FOR EXAMPLE, WON OVER WIND CHILL MINGLY RETALIATION CASES IN THE SUPREME COURT. I WOULD SAY IF YOU WANT TO UNDERSTAND THE CASES IF IT'S EXTREMELY CLOSE AND THE STATUTE INVOLVED IS KIND OF VAGUE, THE COURT IS GOING TO TEND TOWARDS THE DEFENSE BECAUSE IT'S HOSTILE TO LITIGATION BUT IF CONGRESS WRITES A CLEAR LAW THEN PLAINTIFFS HAVE REALLY NO DIFFICULTY WINNING.

>> Ifill: WE HAD THE TWO NEWEST JUSTICES MADE THEMSELVESS HEARD ON THE COURT THIS YEAR. THAT'S JUSTICES SOTOMAYOR WHO CAME ON THE COURT LAST YEAR AND JUSTICE ELENA KAGAN. DID THEY LEAVE A MARK?

>> I THINK THEY DID. WE'RE LEARNING MORE AND MORE ABOUT THEM. FIRST OF ALL, THEY ARE BOTH VERY ACTIVE QUESTIONERS FROM THE BENCH. VERY DIFFERENT STYLES. JUSTICE SOTOMAYOR IS VERY CAREFUL, DELIBERATE, AND PERSISTENT QUESTIONER. LAWYERS DO NOT WANT TO TRY TO DODGE HER QUESTIONS. JUSTICE KAGAN, YOU CAN SEE WHY STUDENTS IN HER CLASSES PROBABLY LOVED HER AS A TEACHER. SHE BRINGS A SENSE OF HUMOR TO THE QUESTIONS IN HER HYPOTHETICALS. JUSTICE SOTOMAYOR IS EMERGING AS A VOICE, I THINK, IN THE CRIMINAL LAW AREA. SHE HAD AN IMPORTANT DECISION THIS TERM ON MIRANDA RIGHTS FOR MINORS. SHE SAID THAT AGE HAS TO BE A FACTOR IN THE CONSIDERATION OF WHETHER MINORS GET MIRANDAIZED WHEN THEY'RE BEING QUESTIONED. JUSTICE KAGAN HAD TWO VERY IMPORTANT DISSENTS. THEY WERE HEAVYWEIGHT DISSENTS FOR A FRESHMAN JUSTICE. SHE WAS THE ONE WHO WROTE THE DISSENT IN THE CAMPAIGN FINANCE DECISION YESTERDAY. SHE WENT TOE TO TOE WITH CHIEF JUSTICE ROBERTS, POINT BY POINT WITH A CERTAIN FLARE, A SENSE OF HUMOR. NONE OF THE UNDERLYING, SAY, NASTINESS OR EDGE THAT SOMETIMES WE SEE IN THE CLEVER WRITING OF JUSTICE SCALIA. SHE WILL BE A FORCE TO BE RECKONED WITH.

>> Ifill: TOM WE SEE A COUPLE OF THINGS WHICH SEEMS TO BE CONSISTENT WHICH IS THE PREPONDERANCE OF NARROWLY SPLIT DECISIONS. REPUBLICANS VERSUS THE DEMOCRATS ON THE COURT WHICH IS OF COURSE NOT NECESSARILY THE CASE BUT ALSO WE PAY A LOT OF ATTENTION TO CERTAIN BIG CASES. BUT THERE ARE OTHER CASES WHICH GET LESS ATTENTION BUT WHICH HAVE HUGE IMPACT ON PEOPLE'S LIVE.

>> THAT'S RIGHT. 50% OF THE CASES THAT THE COURT DECIDES ARE ACTUALLY UNANIMOUS. ONE OUT OF FIVE IS 5-4. SOME CASES FLY BELOW THE RADAR SCREEN. A COUPLE OF EXAMPLES WOULD BE IN THE CRIMINAL LAW AREA. THE SUPREME COURT SAID THAT SOMEONE WHO WANTED ACCESS TO D.N.A. TESTING TO TRY AND PROVE THAT THEY WERE INNOCENT WHEN THE TECHNOLOGY HAS EVOLVED OVER TIME COULD FILE A LAWSUIT TO TRY AND GET ACCESS TO THAT INFORMATION. ANOTHER ONE THAT'S REALLY IMPORTANT IN A LOT OF CRIMINAL CASES INVOLVING, SAY, DRUG TESTS OR D.U.I., WHERE THE GOVERNMENT IS RELYING ON A MACHINE TEST FOR, WHETHER ALCOHOL OR DRUGS INVOLVED, THE SUPREME COURT BY A NARROW MAJORITY THIS TERM SAID THAT YOU WERE GOING TO HAVE TO BRING INTO COURT THE TECHNICIAN WHO OPERATED THE MACHINE. OTHERWISE YOU'RE VIOLATING THE DEFENDANT'S RIGHT TO CONFRONT HIS ACCUSER.

>> Ifill: HOW OFTEN WAS JUSTICE KENNEDY THE PIVOT POINT?

>> OF THE 5-4 CASES ALL BUT TWO WERE ON THAT IDEOLOGICAL AXIS YOU DESCRIBED. HE WAS IN THE MAJORITY OF EVERYONE OF THE HE'S THE IDEOLOGICAL CENTER OF THE COURT. HE WENT AND THIS HAS BEEN CONSISTENTLY TRUE. ABOUT SEVEN OUT OF TEN TIMES HE'LL BE WITH THE CONSERVATIVES. OVERALL JUSTICE KENNEDY WAS WITH THE MAJORITY IN 94% OF THE CASES THIS POINT. IT WAS ALMOST IMPOSSIBLE TO WIN A CASE WITHOUT HIS VOTE.

>> Ifill: AS COURT WATCHERS BRIEFLY TELL ME WHAT YOU'RE WATCHING FOR IN THE PIPELINE.

>> I'M WATCHING HEALTH CARE LITIGATION. THE CHALLENGE TO THE HEALTH CARE REFORM ACT. THAT MAY VERY WELL GET TO THE COURT NEXT TERM. I'M ALSO WATCHING ARIZONA'S VERY RESTRICTIVE IMMIGRATION LAW. KNOWN AS SB-1070. THAT I THINK WILL ALSO GET TO THE COURT NEXT TERM. LESS SO NOT QUITE SURE PROPOSITION 8 THE SAME SEX MARRIAGE CHALLENGE IN CALIFORNIA. AND THE DEFENSE OF MARRIAGE ACT CHALLENGE ALSO COULD GET GET THERE.

>> Ifill: ANYTHING ELSE.

>> AFFIRMATIVE ACTION WILL BE BACKATE AT THE SUPREME COURT. THEY'VE ALSO AGREED TO TAKE UP INDECENCY ON TELEVISION.

>> Ifill: WE'LL BE WATCHING ALL OF THAT WITH BOTH OF YOU. THANK YOU BOTH VERY MUCH.

>> THANK YOU.

>> MY PLEASURE.

>> Woodruff: FINALLY TONIGHT, NEW VIOLENCE IN THE AFRICAN NATION OF SUDAN, JUST AS SOUTH SUDAN HEADS FOR INDEPENDENCE. MARGARET WARNER HAS THAT STORY.

>> Warner: IN LESS THAN TWO WEEKS SOUTH SUDAN IS DUE TO BECOME THE WORLD'S NEWEST NATION. FORMALLY SECEDING FROM SUDAN, AFRICA'S LARGEST COUNTRY. THE RIVAL REGIONS SIGNED A PEACE AGREEMENT IN 2005, ENDING A LONG CIVIL WAR THAT KILLED TWO MILLION PEOPLE. AND THEN LAST JANUARY PREDOMINANTLY CHRISTIAN SOUTH SUDAN VOTED TO BREAK AWAY FROM THE ARAB MUSLIM NORTH. SINCE THEN VIOLENCE HAS ERUPTED NORTH OF THE NEW BORDER. IN MAY SUDAN'S KHARTOUM GOVERNMENT SENT FORCES INTO AN AREA CLAIMED BY BOTH SIDES. THIS MONTH IN THE STATE OF SOUTHERN COREDAFON THOUSANDS OF NORTHERN TROOPS MOVED INTO THE MOUNTAINS TO ATTACK TRIBESMEN. MORE THAN 70,000 CIVILIANS HAVE FLED THE REGION TO ESCAPE THE FIGHTING. THE U.N.'S DEPUTY HIGH COMMISSIONER FOR HUMAN RIGHTS SPOKE MONDAY IN KHARTOUM AFTER TRAVELING THROUGH SUDAN.

>> WHAT MIGHT BECOME OF THE BORDER AREA. (INAUDIBLE)

>> Warner: WHEN THEY'LL BE ABLE TO RETURN WILL BE A TOUGH TALL GIVEN ALLEGATIONS OF WANTON KILLINGS THERE COMMITTED BY THE TROOPS OF SUDANESE PRESIDENT BASHIR. HE IS ALREADY UNDER INTERNATIONAL INDICTMENT FOR ALLEGED WAR CRIMES IN CAR FEWER. YESTERDAY THE U.N. SECURITY COUNCIL VOTED TO SEND 4200 ETHIOPIAN PEACEKEEPERS AFTER BOTH SIDES AGREED TO REMOVE THEIR TROOPS. SUDAN'S U.N. ENVOY INSISTED THE PEACE KEEPING RESOLUTION CAN ONLY SET THE STAGE FOR A LONGER LASTING AGREEMENT.

>> THE TROOPS, THEIR PRESENCE THERE IS INTERIM. IT'S TEMPORARY. IT'S NOT A FINAL OR PERMANENT. THIS RESOLUTION IS NOT A SUBSTITUTE TO THE FINAL SETTLEMENT WHICH WE HOPE PEOPLE WILL WORK VERY SOON.

>> Warner: ANY SETTLEMENT ALSO HAS TO DIVIDE THE OIL REVENUES IN AFRICA'S THIRD LARGEST OIL PRODUCER. MOST OF THAT RESOURCE LIES IN NEWLY MINTED SOUTH SUDAN WHILE THE NORTH HAS MOST OF THE COUNTRY'S PIPELINES AND REFINING CAPACITY. I SPOKE ABOUT ALL THIS YESTERDAY WITH THE U.S. SPECIAL ENVOY FOR SUDAN, PRINCETON LYMAN ON THE OVERLOOK AT THE STATE DEPARTMENT. THANK YOU FOR JOINING US.

>> GLAD TO BE HERE.

>> Warner: THE SOUTH IS DUE TO GAIN ITS INDEPENDENCE ON JULY 9, LESS THAN TWO WEEKS FROM NOW. NOW WE'VE SEEN CONFLICT ERUPTING, BLOODY CONFLICT IN THESE TWO OTHER REGIONS. IS THE BASIC TIMETABLE FOR THE SOUTH ACHIEVING INDEPENDENCE STILL ON TRACK?

>> THE SOUTH WILL DEFINITELY DECLARE INDEPENDENCE ON JULY 9. I DON'T THINK ANYTHING WILL STOP THAT. THE QUESTION IS, WILL THEY HAVE THEIR INDEPENDENCE AT A TIME WHEN THE NORTH AND SOUTH ARE IN A COOPERATIVE RELATIONSHIP WITH EACH OTHER? THAT'S THE KEY.

>> Warner: WHAT'S YOUR BET ON THAT?

>> I THINK IT'S POSSIBLE. WE HAVE JUST REACHED AGREEMENT TODAY AT THE SECURITY COUNCIL ON THE WITHDRAWAL OF SUDANESE FORCES FROM THE REGION THAT YOU MENTIONED WHICH THEY TOOK OVER AND A NEW PEACE-KEEPING FORCE GOING IN THERE. THERE ARE TALKS UNDERWAY TO STOP THE FIGHTING IN THE SOUTH.

>> Warner: IN THE NUBA MOUN TEARS AREA.

>> RIGHT. THERE ARE BIG ISSUES STILL TO BE RESOLVED OVER WHICH NEGOTIATIONS CONTINUE. BORDERS, OIL SHARING. OTHER ISSUES. THOSE ARE UNDERWAY AND WE HAVE TO HOPE THAT THEY WILL BE RESOLVED BY JULY 9.

>> Reporter: NOW THESE 40 ETHIOPIAN PEACEKEEPERS WHO WERE GOING INTO ABIYAH. IS THAT REALLY SUFFICIENT TO PROTECT CIVILIANS THERE AND TO RESTORE PEACE THERE? AND IS THE NORTH GOING TO HONOR IT?

>> WELL, ADDITION OF THE ETHIOPIAN TROOPS IS VERY IMPORTANT BECAUSE THE PREVIOUS U.N. MISSION THERE WAS NOT CAPABLE OF DOING THE THINGS YOU MENTIONED. THIS IS GOING TO BE A VERY WELL ARMED AND EQUIPPED BRIGADE. AND THE MANDATE IS VERY CLEAR. ALL FORCES FROM THE SUDANESE GOVERNMENT SIDE OR FROM THE SOUTH ARE TO WITHDRAW FROM ABIYAH AND THIS PEACE-KEEPING FORCE WILL MONITOR THAT NO SUCH FORCES ARE THERE. WITHOUT THOSE FORCES THERE, CIVILIANS CAN RETURN WHO ARE DISPLACED AND THE AREA SHOULD REMAIN PEACEFUL SNRG NOW THIS NEW AREA THAT SIX MONTHS AGO MOST PEOPLE KNEW NOTHING ABOUT, WHERE THE MOUNTAINS ARE, SUDDENLY YOU HAD THE NORTH SUDANESE GOING ON A RAMPAGE THERE, GOING AFTER REBELS THERE, PEOPLE WHO FOUGHT WITH THE SOUTH. WHAT IS GOING ON THERE? WHY IS THE NORTH SUDDENLY ATTACKING WITH SUCH FEROCITY?

>> YOU'RE ABSOLUTELY RIGHT THAT THIS IS AN AREA WHERE MUCH OF THE CIVIL WAR WAS ACTUALLY FOUGHT EVEN THOUGH IT'S IN THE NORTH. AND MANY PEOPLE IN THE NUBA MOUNTAIN AREA FOUGHT WITH THE SOUTH BECAUSE OF THEIR OWN POLITICAL GRIEVANCES. THEY HAVE MORE THAN A DIVISION OF TROOPS FROM THOSE AREAS. WHAT THE SUDANESE GOVERNMENT DID FOR REASONS WE'RE NOT ENTIRELY SURE OF, IS THEY DECIDED TO TRY TO FORCIBLY DISARM THOSE FORCES BEFORE JULY 9 EVEN THOUGH THERE WERE SUPPOSED TO BE POLITICAL DISCUSSIONS ON HOW TO DO IT. THAT CAUSES A MAJOR CONFLICT.

>> Warner: NOW THERE ARE REPORTS OF TENS OF THOUSANDS OF CIVILIANS BEING FORCED TO FLEE. THEY'RE USING AERIAL BOMBARDMENT. DO YOU THINK THIS IS A CAMPAIGN... WOULD YOU GO SO FAR AS TO SAY IT'S ETHNIC CLEANSING? ARE THEY TRYING TO DRIVE THESE PEOPLE OUT?

>> I DON'T THINK THEY CAN DRIVE THE PEOPLE OUT OF THE NUBA MOUNTAINS. THE NUBA MOUNTAINS PEOPLE HAVE BEEN FIGHTING VERY HARD THIS THIS CAMPAIGN BUT THERE'S NO QUESTION THAT WE'VE HAD REPORTS OF TARGETED ETHNIC ATTACKS, KILLINGS, KIDNAPPINGS, DISPLACEMENT. OUT OF THE FIGHTING MORE THAN 70,000 PEOPLE HAVE BEEN DISPLACED. WE'RE VERY CONCERNED ABOUT GETTING HUMANITARIAN AID INTO THOSE AREAS. SO FAR THE WORLD FOOD PROGRAM HAS REACHED ABOUT 40,000, BUT WE NEED TO GET A LOT MORE AID.

>> Warner: NOW THEIR SPECULATION THAT THE NORTH IS DOING THIS EITHER TO GAIN LEVERAGE WITH THE SOUTH IN THE NEGOTIATIONS OVER OIL REVENUES AND BORDERS OR MAYBE AS A SIGNAL TO OTHER RESTLESS REGIONS IN THE COUNTRY THAT, HEY, JUST BECAUSE THE SOUTH IS GETTING INDEPENDENCE, DON'T GET ANY IDEAS ABOUT BREAKING AWAY YOURSELF. DO YOU PUT ANY STOCK IN EITHER OF THOSE ANALYST HE'S?

>> I THINK TO SOME EXTENT BOTH THE GOVERNMENT'S TAKEOVER OF ABIYAH AND THEIR MOCHL IN THE NUBA MOUNTAINS WAS DESIGNED TO STRENGTHEN THEIR POSITION IN NEGOTIATIONS OVER THE ISSUE. NOT SO MUCH OVER OIL BUT OVER THOSE TWO AREAS. IN THE NUBA MOUNTAINS, THEY'RE VERY CONCERNED AFTER JULY 9 OF HAVING AN ARMY INSIDE THOSE AREAS THAT IS NOT THEIRS. EVEN THOUGH THAT SHOULD BE NEGOTIATED, THEY DECIDED TO TAKE MILITARY ACTION. IT WAS A MISTAKE. IT WAS WRONG. NOW WE'VE GOT TO MOVE IT BACK.

>> Warner: WHAT DOES ALL THIS TELL YOU ABOUT NORTH SUDANESE PRESIDENT BASHIR'S COMMITMENT TO FOLLOWING THROUGH ON THE AGREEMENT WITH THE SOUTH, THAT THEY VOTED FOR INDEPENDENCE TO LET THEM GO THEIR WAY PEACEFULLY?

>> THERE'S A GREAT DEAL OF MISTRUST. MISTRUST BETWEEN THE TWO.

>> Warner: WHAT'S THE U.S. VIEW OF THE NORTH? I MEAN, DO YOU ALSO MISTRUST HIS INTENTIONS?

>> I THINK WHAT YOU SEE AND WHAT WE'VE SEEN OVER THE LAST SIX MONTHS IS A GOOD DEAL OF AMBIVALENCE. WHEN THE REFERENDUM TOOK PLACE IN JANUARY 9 AND THE SOUTH VOTED FOR INDEPENDENCE, PRESIDENT BASHIR HAD FLOWN TO SQLUB A AND SAID I WILL BE THE FIRST TO RECOGNIZE YOU. IT LOOKED LIKE EVERYTHING WAS GOING TO GO SMOOTHLY. SINCE THEN, YOU HERE AND SEE AND IN MY CONVERSATIONS THERE A GREAT DEAL OF UNHAPPINESS. WHY DID WE DO THIS? WHAT DID WE GET FOR IT? WHY DOESN'T THE WORLD TREAT US BETTER? WHY DON'T THE SOUTHERNERS SHOW MORE GRATITUDE? AND GRADUALLY YOU SEE A NUMBER OF PEOPLE IN THE GOVERNMENT SAYING WE GAVE AWAY TOO MUCH TOO SOON TOO EASILY. AND THAT HAS LED TO A MORE MILITARIZED POLICY.

>> Warner: NOW ONE OF THE CARROTS FOR THE NORTH TO GO ALONG WITH THE SOUTHERN SECESSION WAS, IN FACT, THE PROSPECT OF NORMALIZED RELATIONS WITH THE U.S., THE SO-CALLED ROAD MAP TO NORMAL RELATIONS BUT THE QUESTION IS IF THEY'RE DOING WHAT THEY'RE DOING IN, SAY, THE SOUTH WHICH AS YOU SAY IS NOT PART OF SOUTH SUDAN, WOULD THE U.S. EVER NORMALIZE RELATIONS WITH SUDAN ITSELF, SUDAN PROPER?

>> ADDRESSING THE POLITICAL GRIEVANCES OF THE PEOPLE IN THE MOUNTAINS IS PART OF THE COMPREHENSIVE PEACE AGREEMENT. FAILURE TO DO THAT WOULD MAKE IT IMPOSSIBLE FOR US TO IMPLEMENT THE ROAD MAP.

>> Warner: A.M. BASS TORE, THANK YOU VERY MUCH.

>> MY PLEASURE. THANK YOU.

>> Ifill: AGAIN, THE MAJOR DEVELOPMENTS OF THE DAY. RIOTING ESCALATED IN GREECE AS A STRIKE AGAINST NEW AUSTERITY MEASURES BROUGHT THE COUNTRY TO A STANDSTILL. THE INTERNATIONAL MONETARY FUND CHOSE FRENCH FINANCE MINISTER CHRISTINE L.A. GUARD AS ITS NEW DIRECTOR AND A MAJOR HOTEL IN KABUL AFGHANISTAN WAS BOMBED LATE TONIGHT. A GUN BATTLE BETWEEN POLICE AND THE ATTACKERS CONTINUED FOR HOURS. NATO SAID ITS HELICOPTERS FIRED ON AND KILLED THREE INSURGENTS ON THE HOTEL'S ROOF TOP. AND TO HARI SREENIVASAN, FOR WHAT'S ON THE NEWSHOUR ONLINE. HARI?

>> Sreenivasan: WATCH MORE OF MARGARET'S INTERVIEW WITH AMBASSADOR LYMAN ON THE CONFLICT IN THE NUBA MOUNTAINS AND WHETHER IT COULD BECOME THE NEXT DARFUR. THAT'S ON OUR WORLD PAGE. AND THERE'S A NEW DISPATCH FROM OUR REPORTING TEAM IN INDONESIA. THIS ONE IS ON HOW HIGH FOOD PRICES HIT ONE SMALL TOWN PARTICULARLY HARD. PLUS, ON OUR MAKING SENSE PAGE, PAUL SOLMAN LOOKS AT THE LATEST DATA ON HOME PRICES AND EXPLORES SOME OF YOUR QUESTIONS ON MORTGAGES. ALSO THERE, FIND AN INTERACTIVE MAP THAT TRACKS HOW HOUSING PRICES ARE FARING WHERE YOU LIVE. ALL THAT AND MORE IS ON OUR WEB SITE, newshour.pbs.org. JUDY?

>> Woodruff: AND THAT'S THE NEWSHOUR FOR TONIGHT. ON WEDNESDAY, WE'LL LOOK AT THE VOTE ON AUSTERITY MEASURES IN GREECE AIMED AT STAVING OFF DEFAULT. I'M JUDY WOODRUFF.

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