>> from our studios in new york city, this is charlie rose. charlie: we begin with our coverage of the greek debt crisis. the prime minister called for a surprise referendum. the ballot will expire tuesday. it coincides with the day greece has to pay back a 1.8 billion dollar loan to the imf. the greek government announced it would default on the payment. the country's bank are closed for a week.

>> for me greece is exit of the eurozone has never been and never will be an option. i tell my great friends that by saying that it is not an option they shouldn't believe i would be a two present a case to find a solution. >> joining me from london is lionel barber. and joe wiesenthal, the editor of bloomberg markets and the cohost of what you miss -- what'd you miss on bloomberg. tell me what a yes vote means and what a no vote means. guest: we don't know what they are going to vote and what they

are voting on. the deal that was rejected is not on the table. in my view this comes down to the euro versus the drachma. do you want to stay in europe at a price or do you want to go backwards leave the euro, and have your own currency, which is tremendously perilous. a yes vote to my mind offers the space for new negotiations on a bailout plan for greece, it also likely would herald a new greek government. mr. senttpiras could not be in power with a new realigned party and then everything starts over. i say this with trepidation. i don't know how they avoid an

exit. both political and economic that is not a result they want to see. charlie: what does an exit mean if it comes to that? guest: there are catastrophic consequences. returning to the drop mom is difficult. . it is downside. it -- greece is going to have a hard time finding any lenders. at any level. lenders to consumers, to businesses, to the government. it is going to be the beginning of a catastrophic time for greece. beyond that, the consequences for the rest of europe are big. i don't think for the global economy are large.

this crisis has gone for so long and has been such anticipation of a financial unraveling of the marriage between greece and the eurozone, i don't think the consequences for the markets are that great. i think you see that today in financial markets. the euro has weakened but not drastically. thethe spread has widened but not tremendously. this is not something that is going to cause a dislocation in the global economy. greece is a very small country. 11 million citizens. only 2.7% of the eurozone gdp. it is a small, contained problem where the big losers will be the greeks themselves if it goes that way.

this will be a big step backwards. we will see what ultimately britain does. i don't think the consequence is great. charlie: how about contagion by nearby state? guest: i don't enter is much risk to financial contagion. most of the debt is owed to other governments. you would not see financial linkages. the story is long-term. what does this mean for the future of the european project? over time you have the concern about the forces: you're apart and other countries, like the u.k., i don't think these are instant concerns. it is not like lehman where you have one failure and then a series of failures. you look at this trend of

parties on the rise everywhere. you can't help but wonder whether you will see similar stories play out. charlie: do you worry about this in terms of the greek people or in what it means beyond greece? guest: one little comment there. i'm surprised they are mentioning the british referendum for they are somewhat different. we don't want to be in the same sentence. there is a very serious points that roger alluded to, as a crowd brits. proud brit speaking. the greeks are hurting already. people are not getting their pensions. this is a country that is hurting. as roger says, if they leave they were to adopt their own currency there would be a massive hit to living standards above and beyond the economy that has shrunk around 2% to

2008. we do have to look at the geopolitical consequences as it were. my prediction tonight is that in the event of a greek exit you will see the french president and the german chancellor come together to issue a new declaration about strengthening the institution and governance of the euro zone they will be deeper integration to counter the forces of fragmentation that joe and roger alluded to. charlie: in that context some are saying this idea of going back to early leaders for some kind of integration is at risk. guest: my colleague has written a great column for tomorrow about the death of the european union. back in 1981 greece the french

president wanted greece to come in as a statement that here you could extend democracy after the kernels to greece and it would be a democratic family of nations in western euro. -- europe. they did not make the adjustments like spain and portugal that has helped raise their living standards. it got stuck. greece is a special case. i do think that we need to be careful if we say in effect this is manageable contagion. the shop of the greek exit, they would still be in the european union. leaving the eurozone doesn't mean you leave the european union. it would be a tremendous shock and a huge setback for europe's leadership. charlie: i don't think it is clear there will be a greek exit

from the eurozone. charlie: even if they default to the imf? roger: that can be financed. it can be financed. if the greeks vote yes on the referendum, and i don't have any idea, we will see over the next 48 hours, it is a task to hold the referendum. i've heard people express skepticism. ifi think greece. in the eurozone. there is the possibility between now and the referendum that greece returns to negotiating table faced with the reaction of its own people to the idea of being unable to access their own money and to banks being closed for other services. in terms of living standards, if

this thing does unravel. i don't think it is clear they will exit the euro. i'm betting toward it remaining in the euro. charlie: they will come back to the negotiating table. roger: either they were vote yes because the shock of these few days will impel that or increase will return to the negotiating table between now and then. one of the other is more likely than not. charlie: lionel? lionel: what roger said is absolutely right. it is important to note that the europeans and others have left the door open to negotiations. they have been clear on that. the european central bank that will meet on wednesday is going to look at the state of emergency support for banks. i predict they will not shut this off. they will impose a haircut on the bonds. they are not going to take the nuclear option. they want to keep the door open.

what roger is saying is right. charlie: it was tsipras who walked away. lionel: he didn't think the offer was going to be taken off the table. some would say it was a tactical mistake by the european government that they did that. they are up to here with the greek negotiators. they have no trust. it shop the relationship. charlie: what was it? the straw that broke the camel's back? the failure to negotiate or calling the referendum? charlie: it is not a straw. it is a haystack -- lionel: it is not a straw, it is a haystack. roger: i think it was a cowardly act. tsipras knows the impacts on his own people if greece exits and how do coney and those impacts will be. they are not going to throw up their own political career.

very cowardly if you ask me. the calling of the referendum did this. joe: this idea that if greece were to leave the euro and go to the draw, it would be a disaster. some say that it would be great and they would be able to print their own currency. look how fast iceland recovered. it is important to consider the complications. if you talk about a country that imports the most basic of things from fuel to energy and so forth, that would be massively more expensive read one of the benefits of that country's get from being able to weaken their currency is the manufacturers become more competitive. greece is in have any manufacturing economy. you get this massive hit to your imports without any offset. people who think they can just solve this by going to their own

currency rving naïve. -- are being naïve. charlie: what would they recommend as the right thing for to happen here in terms of creditors as well as the greek government and the greek people? lionel: they have to accept that they need to make reforms and take some pain. the same kind of pain that the irish come a spanish, portuguese have taken in the last few years. pension reform. you can't -- you have to retire later. you need to stay in the workforce. and reform the state. on the other hand the creditors i believe need to hold and offer

hope, offer the prospect of renegotiation of the greek debt. we know it is $160 billion plus. that is going to be written off. not now, but the promise. there needs to be a negotiation. one of the problems is the greek government they have enough people experienced in power. they have not been willing to negotiate. that has made it difficult. the point about a yes would be however much they offer, a new space for a proper negotiation with some of these elements. guest: the only problem with that argument is greece has endured extreme amounts of pain over the years. the idea that greece hasn't swallowed the medicine some of these other countries, you can go to greece and center is a country that hasn't taken pain. they have done fiscal adjustment. some argue at a level far

further than what others have. roger: i would gently disagree. i don't think -- greece is running a deficit. a cash deficit. which means please lend us more money to pay our debts and borrow even more. given the amounts that greece has borrowed from the obvious entities and so forth, a huge amount $90 billion in emergency assistance. given the amount, asking them to put more money in while the greeks continue to run deficits and the need to borrow more, i don't think it is tenable. it is not tenable in european opinion and principles of finance. joe: sure. it never made sense in the first place.

it never made sense in the first place to just pour all this money into the greek economy and the greek banking system without fundamental changes to the size of the debt. while that is true it doesn't make sense, the initial bailout is widely agreed by many to have been structurally flawed, a lot of money that went to pay creditors without any real attempt to solve the underlying problem. charlie: that opens the question. if they do that, what might russia do? >> alex miller was in athens talking about the financing of pipeline, and clearly -- russia is not exactly flush with cash at the moment but you can imagine greece right now, this government is scraping every barrel. the reports of sequestering money from the local authorities , they are looking for credit from other foreign countries.

everything to try and save -- dave off the hard default. i think just to go back to russia, there is some potential for them to get involved. they were very involved in the cyprus economy. they have money in the cyprus economy. you can imagine. their involvement is nowhere near the scale of the involvement of the western europeans. joe: there was a lot of talk when cyprus had its problems will russia save them? cyprus is so small and russia has so many assets that they could have done it. there is no way that rush is going to come in with any significant needle moving amount of money. the geopolitical aspect is one angle that makes it important for european leaders not to let greece go. it is an important point. physically a lot of in the

cranes and migrants through greece. these factors do in terms of not wanting greece to leave. roger: russia is so weak economically. the shrinking of its own foreign-exchange reserves, if russia were to step in and bail greece out over 1-2-year basis it would be shocking and not a good day for russia. ♪

charlie: the group's greeks can vote no and stay in the euro zone. roger cole it is most unlikely. either they vote yes or between now and the referendum they returned to the table. if they vote no it is 95% over. they could still -- they are so complicated. there can be questions of the constitutionality of the vote, the dissolving of this government. there are far-fetched scenarios they could vote no and remain in the euro zone. it is unlikely. the widely thing is the referendum is carried off and they vote yes. avoiding the need for the referendum. charlie: is that what you

believe will happen? lionel: i'm only getting little whispers straws in the wind. you could see them come to the negotiating table. many tales would be seen between legs if the greek government would come back to the table between now and sunday. there is a practical point. how do you get a referendum in place by sunday? this is a week stay. -- weak state. it was badly organized. it is a nightmare. roger: [indiscernible] he made a shrewd observation, which was skepticism greeks could conduct a referendum that would have any legitimacy at

all. greases not functioning well. it is not an efficient place by any measure. carrying this off i'm not sure they are going to be about to do this in a way that will be seen as authentic. joe: if they pull off the referendum and they do vote yes what happens then? i agree with roger. the odds that they make it nothing they vote would be binding. the offer from the creditors not on the table anymore. unless you get a radical change of the government after that, it is like you're back to square one in terms of can the two sides negotiate? lionel: you definitely get a new government on sunday. i'm convinced of that. charlie: clearly it is the prime minister and the finance minister of greece. lionel: there are several key players whose names i either forget or what want to pronounce

on air. who are very important in the party. these are the people that we don't see in public. they are pulling the strings and they are the ones, they are the rejections or they don't believe in market economy. they don't believe in continuing membership of the euro. this is why the government is a coalition. it is not just -- they face janus like in two directions. a vague attachment to the staying in the euro. they thought they could out negotiate the european partners. i would stress, this is a radical party with very powerful people in the background who are

pulling the strings, and he's been nice guy. believe me. with the good looks and motorbike and pictures in vogue magazine. that is not the real person. charlie: who is the power on the other side? lionel: angela merkel. depending on who you believe. there is a strong sense in which she has given up on citrus -- cyprus. she hasn't given up on greece. the other two players, mario draghi, with a fine political touch. interesting how the ecb has not throttled the greek banks. they are being careful. the other player we haven't seen much of his francois hollande.

he doesn't want to cut greeks all. he's the guy that wants to keep the lines open. charlie: because he worries that contagion or he thinks it is the best thing for greece to get back on its feet? lionel: he worries about the political contagion. francois hollande is a socialist. he is a back room function or. he's not a centralist figure. first thing he did was soak the rich on taxes. he has a little bit of political empathy with mr. tsipras. charlie: he has begun to change that. his finance minister was on and he has talked more about reform and changing the french economy. lionel: belatedly so. charlie: but he has.

roger: the other person who has been in the background is christine lagarde. she is going to have to finesse this default which occurs tomorrow. a de facto grace period. if you miss an interest payment you get 30 days. the concept of a grace period, behind us has the ability to do that and actually declaring an official default has consequences they will want to do. she is important to this even though so far she has let them play the lead roles. lionel: she has come up with the best quote. we need some adults in the room. charlie: that is a great way to end. thank you. back in a moment, stay with us. ♪

charlie: return to what many consider to be the best week of president obama second term. the week began with a victory on the pacific trade. [applause] on thursday the supreme court upheld the affordable care act for the second time in three

years. president obama: after 50 votes to weaken this law, after an election based in part on preserving or repealing this law after multiple challenges to this law before the supreme court, the affordable care act is here to stay. this morning the court upheld a critical part of this law to afford health insurance regardless of where you live. if the challenge had succeeded millions when it had tax credits taken from them. for many insurance would have become unaffordable again pre-many would have become uninsured again. charlie: the next day, ruling these constitution requires same-sex couples be allowed to marry no matter where they live. president obama: folks who are

willing to endure bullying, and stayed strong. and came to believe in themselves and who they were. and slowly made an entire country realize that love is love. countless, often anonymous heroes deserve our thanks. they should be very proud. america should be very proud. charlie: the week culminated with the string eulogy for the slain pastor and parishioners of the emmanuel african methodist episcopal church in charleston south carolina. president obama: we are here to remember a man of god who lived by faith.

a man who believed in things not seen. a man who believed there were better days ahead. a man of service who persevered knowing full well he would not receive all those things he was promised because he believed his efforts would deliver a better life to those who followed. remember the flag -- removing the flight from the state capitol would not be an act of political correctness. it would not be an insult to the valor of confederate soldiers. it would simply be an eight knowledge meant that the cause for which they fought the cause of slavery was wrong. [applause] charlie: joining me from washington is ed luce of the

financial times. he wrote -- also, al hunt of bloomberg view. let me begin with ed. tell me what went into thinking about this column? ed: i had the phrase from the former british prime minister harold wilson, a week is a long time in politics. constantly on my mind. it really was quite an extraordinary week. if you think of where the president was at the beginning of that and where you ended with the eulogy in charleston, it was quite the tengion -- getting the fast track authority bill through congress by no means a given given that most of his own party including nancy pelosi were against it. if that had failed as many believed it might then that

would have put an end to the main plank of president obama's pivot to asia and indeed his main trade agenda. that was the first success. the survival of the latest challenge to the affordable care act was hugely significant. if the supreme court had gone the other way that would have eviscerated obamacare as its opponents call it. the real peak of the week was when president obama was more african-american as a present than we have ever seen him more comfortable in that role, the role of a reverend preaching from a pulpit, in the town, charleston, where the first shot of the civil war was fired. really bringing the nation together in an emotional but also intellectual way. i thought it was a brilliant performance. i thought it was a fair as one

of the two or three best speeches he ever gave. that was befitting into a week in which his fortunes transformed. charlie: francis wilkinson dubbed it the week the 21st century began in america. we are seeing a lot of things. this is the man without we were getting into thousand eight. it has been an uneven presidency. there did see something special about this week. you have seen a lot of presidents pre-tell me about this week in the context of this president. al: i agree with ed's column. the speech on friday was the most moving personal speech i've ever heard a president give or deliver. i was traveling that day so i came back and watched. i read it first and thought it was good. i watched on youtube and watch

it two more times. it was incredibly powerful. the singing amazing grace was an extraordinary act. i can't tell you how effective i thought it was. to ed's point it was a fabulous week. what barack obama has achieved is the goal he enunciated in an interview 7.5 years ago, to be a transformative president like reagan, unlike bill clinton. if you look at the affordable health care act, the stimulus, a potential deal with the ron, the trespassesirna, he is -- iran, is clearly a transformative president. don't you think that is an open book, we don't know whether the iran deal will hold or be good or not. if the transpacific accord delivers what it promises unlike some other trade pacts

it is geopolitical as well as trade, that will be part of the legacy. what will look like? those are open actions area this is any president has done large things. he's done big things. he is a long ball hitter. charlie: david remnick has written about him. the president had said to him once at the end of the day we are part of a long-running story print we just try to get our paragraph right. one of the things i'd like to appreciate as president is you are a relay swimmer in a river of rapids and the river is history. you did have a sense being buffeted by history he had come to believe that you could simply make your small part. it looks like now he has a feeling he has made a large part. ed: you hit singles and twos.

the contrast between obama a year ago when he was almost oppressive in his public profile. every other day there were new segments about how often he was playing golf. the contrast between him then and the beginning of his term when he have this grandiose visions of what he could achieve was really the story of somebody who had gone from being ambitious to somebody who was talking of hitting ones and twos. now we are back to something in between. a president who is wiser, grayer , if you look at a picture it is like what has happened to me. i've gone grey quickly. he has the excuse of being president. i think the last couple of years he is -- he has liberated him. he feels comfortable with the big picture and the big stage without going too far, being too

grandiose. like he was in the 2008 campaign. that is interesting to see. just 18 months left. most equivalent stages we would be talking about lane dockery -- lame duckery. we are pretty interested to see what he does with the next 18 months. charlie: 12 he faces now? john: foreign policy -- al: foreign policy. we have a great victory but there are still questions that are raised about it. i don't think there's going to be much legislation. to head off anything the considers bad, those are major challenges for him. i think again this is not going to be lame duckery. he was liberated by the midterm defeat. let me tell you one anecdote. in 2004 i invited barack obama

to be the speaker at the winter gridiron dinner. he came. the gop speaker was mitt romney. mitt romney that night broke into verse. he saying. i was next to obama and he said that takes courage. i would love to do that someday. charlie: wow. al: he did it. to do that and that solemn occasion at that church, to do with such skill and encourage and such grace, that is what was remarkable. charlie: where are we in the question of race in america after charleston? al: if you're asking me, i think we made a lot of progress. a lot of people were mesmerized as mesmerized as i was by that speech. he spoke like a black preacher.

he reached white america. one of the disappointments of barack obama has been that his administration has not healed the racial divides we have in this country or the red-blue divides. i think what he did last friday was important. someone wrote, jim fallows, it may well be his post-presidency will enable him to be much more of a racial healer than you can in the maelstrom of the presidency. charlie: interesting idea. what you think of that idea that somehow he will begin and an opportunity to speak to racial healing with more power? ed: that is an interesting suggestion. i've spent a lot of time recently in chicago. the site he is selecting in hyde park in the center of the south side. not just looking to his past, but a deliberate attempt to

signal what he is going to be focusing on in the future. the idea of having a community organizer in chief as a postpresidential life is an interesting one. i do think it has been a surprising degree to which african-americans haven't necessarily fair that well and racial divisions have been healed under president obama's presidency. through no fault of his own. perhaps most significantly from a day-to-day point of view the wealth gap between african-americans and other racial groups has widened. there are deep-seated socioeconomic problems he alluded to in charleston. to which simple solutions are not obvious. maybe the postpresidential obama through example, through the work of the obama library and

foundation can try and suggest ways forward in chicago. charlie: what impact will this week cap on the 2016 election? al: barack obama standing and his popularity is going to affect the democratic nominee presumably hillary clinton. if barack obama can keep numbers and 50%, that is better for her. it translates that way. this week is going to make his standing much more significant than it would have. a year-and-a-half or 17 months is a lifetime. all sorts of things can occur. the sense that this is a significant president who has done significant things, most of which i think are going to be popular with the electorate. he is going to be an asset to a hillary clinton in 2016. much as reagan was to george h.w. bush in 1988. charlie: in that election george

bush was running for the third term of ronald reagan. al: they are always going to say that. there is always an extent that is true. it will be said again in 2016. it is very important for barack obama. we talk about his legacy and the aca and the economic packages he has put together and the initiatives. it is important to be succeeded by a reasonably sympathetic president rather than someone who has not. ed: i have been watching the debate amongst some conservative commentators about the impact of the supreme court ruling, in particular on the field, with clearly divided. some believing this is a liberation for the gop. they don't need to worry about the divisiveness of same sex marriage and the cultural issues . they can focus on a forward-looking agenda without this.

there is a quarter of america saw identified as evangelicals who feel deeply opposed to the supreme court ruling and will voice that opposition the of the primary. i think that is hard to predict. i don't believe this is going to be bad for mike huckabee's candidacy. or rick santorum. charlie: they are defining this as a question for them of freedom of religion. even the president touched on that idea in his remarks after the court decision. ed: he did indeed. i think it is remarkable that al hunt what al has said about obama being a transformative president. given his experience and looking at presidencies, and given where the center-right, it is

remarkable the degree to which we have come to this point of view on obama's presidency. i used to be more skeptical of his abilities to grow in the job and i am today. i'm happy to be proven wrong on that. i think this is a moment. for out to be likening obama to reagan is an extraordinary thing. charlie: you accept that? that is possibility of being transformative is a significant as what he said about reagan? al: i do. other than the center right, i accept everything. ed: i was struggling with how -- al: some readers would be shocked by that. he gave the initial interview and mentioned reagan in his book . what he said was not that he agrees with reagan's policies

but reagan changed things reagan changed america made a difference. reagan established a regular order. what attracted a lot of attention in january of 2008 was he said clinton did not. bill clinton always lamented the fact he didn't have a great crisis to deal with. obama has had crises to deal with. he has risen to that occasion. i'm not sure how history is going to judge it. we are not sure how history will judge ronald reagan but he is a significant resident. charlie: here is what he said. will measure myself by the end of my presidency whether i began the process of rebuilding the middle class and reversing the trend towards an economic bifurcation in this society. that is an open question. al: that would not be put in the success category so far. the middle class is struggling every bit as much it was seven

years ago. we came out of a terrible economic crisis. the middle-class stagnation is as great today as it was in the beginning of his presidency. charlie: you are nodding your head. ed: arguably greater. i agree with al. if that is the measure success it is a failure. i'm sure he would choose different measures now. defenders of the president would say he has been pitching things that congress that would help ease the middle-class crisis. if not transform it. such as infrastructure bills, work and retraining, money for better worker retraining, cricket education. stuff that might help and that hillary clinton has adopted for her platform. by that measure the obama administration record would be a failure. charlie: here is how you ended your piece. will charleston make it different? some states get rid of the

confederate flag but it is a symbol. the bigger problem is the ease which fanatics can require guns. he reiterated his plea in charleston. the chances of congress doing anything to hinder gun sales are slim. sometimes things change so they can stay the same. gun control is the american north's lost cause. last week brought to fourth the majesty and the limits of u.s. presidency. it would not have been the same on anyone else's watch. tell me what you meant. ed: the majesty is something that the president used in its full force in a way only he could with the eulogy in charleston. let me get to the limits for gun control. something -- i feel this issue this early. the newtown massacre, sandy hook

massacre in december of 2013 took place on my daughter's sixth birthday. the news happened to break when there were 20 kids and uncanny coincidence in my house celebrate my daughter's birthday, the same age of the kids who are massacre that day. president obama said he would move heaven and earth. to use this tragedy for positive affect my to get some background check system for gun violence. and failed. the bipartisan bill a very modest bill, a modest reform. nothing like the assault gun ban . and it failed. i don't think anybody believed the president will be able to use the charleston tragedy to move any thing and contest

whatever the majesty of the presidency, the national rifle association has greater sway on capitol hill. including over many democrats. then the president at his full majesty. that is why i put the limits and the majesty on display last week. we should be aware of both. charlie: i suspect regrets not being able to do something about gun control as much as any singular issue he has faced in his presidency because you can see the pain of parents, and all those cases in which he has compared our gun laws to gun laws of other countries. al: and all those tragedies, and nothing happens. i think it is an enormous regret. it is not going to change. there is going to be little legislatively he is going to get in the next year and a half.

maybe a trade deal. that is a possibility. conceivably something on infrastructure. not much. i think he realizes that and he views he is thinking of the bully pulpit to raise issues climate change being another one of them. he believes the country is becoming slightly more liberal. not dramatically, but slowly. i think he will talk more about immigration but he is going to use that bully pulpit, maybe some executive actions, and be a very activist last year and a half president. charlie: this question as to whether he feels empowered, whether he feels whatever restraints he might have had that this week has given him some sense of how i can try harder to move the nation. al: i think this week in the midterm elections were a

liberating effect on barack obama. charlie: because he didn't participate in them. al: because he realized afterwards that he could go up and try to get 17 votes that year or pick off this republican or this democrat here. he wasn't going to get much. therefore he was free to do things on immigration and other matters he felt constrained by. charlie: my point was that in the midterm elections, all the democrats said we don't want you here campaigning for us. he felt like the case that he kept making was not being allowed to make. i think he believes he has enough allowed to make the cases and using second action. charlie: i agree. he was right and democrats were wrong back then. charlie: last word ed. as we thought about what a remarkable week it was. ed: thank you for picking up on

my column. a caveat i guess i would like to add is the supreme court ruled today, it struck down a portion of the obama administration's climate change actions of the epa and missions standards. -- emission standards. in the buildup to the paris climate change summit in december, which is a hugely important piece of obama's ambition as president, we should be watching for what he does on global warming what he says, what his responses to this. this is one of the big legacies he would like to be measured by. charlie: great to see you. thank you for joining us. see you next time. ♪

♪ >> appeal rejected. they dismiss greece's last bid. euro says it would be crazy with the bailout. >> a wild ride. a roller coaster as a first half comes to an end. >> coming on stream, apple music throws down the gauntlet for spotify. >> welcome to "first up." streaming on mobile and bloomberg.com.