Martin Baccardax, News Editor, CNBC Europe, believes European nations will be able to come up with some kind of fiscal stimulus in order to reignite their economies. "So, it leaves the responsibility up to individual governments, and they have to decide whether they want to break the rules about GDP deficits to GDP ratios, which currently stand at 3%, or maybe just bend those rules a little bit to allow governments to be a little bit more flexible."

Baccardax said European countries are in a surplus, but individually many countries such as Italy, Greece, Portugal, etc are in breach of the requirements. "They would have to bend them even more in order to fiscally stimulate their economies. That is a little bit of a concern."

Here is a verbatim transcript of the exclusive interview with Martin Baccardax on CNBC-TV18. Also watch the accompanying video.

Q: What are people talking about on the G-20 meet?

A: We had a serious of statements from the G-20 leaders but no real concrete action with respect to policy. I think there have been some expectations that may be we get a decision about coordinated interest rat cuts, coordinated fiscal stimulus and that sort of thing.

Unfortunately, what we did get was a series of statements that sort of address the issue that fundamentally recognise the problem in the system and the tools that are probably best to fix it, and a decision to may be meet back in March.

So, there is maybe a little bit of disappointment. But there is at least an understanding from the leadership that they are going to have to work together.

Q: What would the markets look for in terms of market-moving news?

A: Ultimately from a North American perspective, there are two things that are going to be most important, which are unemployment and oil prices. Firstly, unemployment is rising in the US to troubling levels and of course we have a new administration coming in, in January, with President-elect Barack Obama, and a democratically controlled Congress.

So, there is concern that there might be some protectionist decisions made by the new administration in order to stem the job loss scenario. If that is the case then other nations will react in kind and we could have similar kinds of trade wars.

I’d mention gas prices importantly before I mention oil prices because they are importantly linked to gas prices and that links of course to the consumer strength in the US. Oil prices are falling quite significantly as you know. As a result, gasoline in the US is in some instances under USD 2 per gallon. If you remember back in July, it was trading at USD 4.17 per gallon at record highs.

If this deceleration continues over a 12-month period and there is every reason to think that it might, we could add a full 1% to US GDP based on the strength of the American consumer because he or she will have to spend less on petrol and will be able to spend more on the stores. Of course this is a wildly optimistic view.

In Europe I think we are looking at whether or not the European nations will be able to come up with some kind of fiscal stimulus in order to reignite their economies. Now of course the concern there is that there is a single interest rate policy and that has been lowered but not really at the pace many people would like.

So, it leaves the responsibility up to the individual governments, and ultimately they have to decide whether they want to break the rules about GDP Deficits to GDP ratios, which currently stand at 3%, or maybe just bend those rules a little bit to allow governments to be a little bit more flexible.

Collectively, European countries are in a surplus, but individually many countries such as Italy, Greece, Portugal, et cetera are in breach of the requirements. They would have to bend them even more in order to fiscally stimulate their economies. That is a little bit of a concern.