question more artsy to live in a country that doesn't understand that there's more violence in the streets of this country than there are in the streets in afghanistan or baghdad. from. one man in disparate symbiotic breach of. the us to the. problems. crowd gathers from a young man dumbest presumably. to. the

. middle east soon which brightened a few new moon about song from fondest impressions. these films starts on t.v. dot com.

it's now half past the hour here in the russian capital deal with breaking news here up to fifteen people have been killed by a suicide car bomb attack in the central market of the southern russian city want to cost us more than eighty were injured in the terrorist blast with ten people in a critical condition it's pretty reported the power of the explosion was

a crippling to forty kilos of t.n.t. russia's emergencies ministry has sent a plane with aid and medical help for the injured authorities promise financial compensation to the victims' fund. all right up next we're going to she's talking to the award winning producer story and economist robert skidelsky talk all about the economic crisis and why austerity measures may only make things worse that's next here on r.t. . lord skidelsky member of the british house of lords award winning historian economist and an expert on russia is here with us today thank you very much for joining us group or skidelsky your wrists and book canes the return of the must step up philosopher and economist john maynard keynes received several awards how relevant the economists feel today i would say they were very relevant in three respects

first of all he explained how we got into this mess this crisis in two thousand and eight two thousand and nine secondly he tells us what we ought to do about it how to get out of it and thirdly he tells us how to avoid how we can minimize our chances of getting into another one and i think no other economist does that he was the greatest economist of the last century in one of the articles you said that europe was declining economically and politically why is this happening and what are the signs of the crisis well of course europe's been very badly hit by the recession and it's got very high unemployment but beyond that i think europe is in decline it's it's weaker than it was. population is it is not expanding and the others are it's been affected by the rise of asia

and particularly the rise of china so if you think back to one hundred years ago europe was the center of the world now of course it's not and it's much much weaker than it was and partly it has no unity there's a european union but if there's no european government and till they get european government they're not going to play or be able to play a major part in the world the world of. the collapse of the greek economy has impacted the whole of the european union. and does this mean that the e.u. is vulnerable as a groupie well of course it is because it was based on the idea that everyone is progresses at the same rate well if there are some weaknesses. in some parts of it it affects the whole lot because it means that the exchange rate is weaken and it also means that some countries like germany have to bail out other countries so if

anything goes wrong in one part of the union it's the responsibility of other countries and they didn't think they were going to have to assume those responsibilities so i think the greek the greek crisis has impacted the whole of the union immediately immediately it. created a crisis of confidence in the euro germany and france want there to be consequences for the countries which run up excessive deficits like greece is this a necessary step well of course i think people have to countries have to be have to live within their means so to speak not spending extravagantly but when they talk about consequences for greece they also have to consider the consequences for greece and other weak countries will have consequences for them i mean if if if they cut down on government spending in the mediterranean countries that will mean

less demand for german exports and so it will impact them it's not just consequences for the for the weak countries it's consequences for everyone so i think they have to be very very careful in wanting greece to pay the price of its extravagance because in paying that price the germans will also have to pay a price they're the strongest country in the your opinion and from such as well and what are the countries which could be potentially some. ject to these matches greece italy spain ireland. england. portugal they're all they've all adopted what's called fiscal consolidation policies they have all said that they're going to have their spending in the next over the next four or five years to balance their budgets and i think that's going to have a very bad effect because i think it's going to slow down the growth of a recovery will slow down the recovery it might even lead to a double double dip recession as it's called so you actually go down again so

they're very dangerous times for the world economy over the next six months the german finance minister suggests introducing a european monetary font is this necessary is this a necessary edition to the current system i think it would help yes i think that's the one good suggestion that's actually emerged from the crisis i think most of the suggestions have been terrible but this is a good one. because it mobilizes some resources that can be brought to help we countries in an emergency it's rather like your original version of the i.m.f. you know the i.m.f. countries can borrow from the i.m.f. on conditions but of course it depends whether they can mobilize the required resources on a permanent basis they have done it on a temporary basis so far on a permanent basis and what conditions they attach to lending the money if the

conditions are too hard then i think they can actually make matters worse but it is a good it is a good step towards a government of europe you believe that expenditure reduction is the key danger of the current economic situation why is that and if so what can it result well i think expenditure reduction is a huge danger because it's cutting down spending the government in a recession the government is really kompany. sating for a decline in private spending overall the spending in the economy is less than it was and then private sector spending less government has to spend more that's the only way of keeping economies going and i don't know who exactly has some politicians that there is a crisis like the current one you have to pay people the money make them work even if you if you make them take the money and take them out well cain said cain said you know that you'll you'll you'll you'll get rid of unemployment if you if you dig

dig holes in the ground and get people to fill them up again or if the treasury filled the old bottles with banknotes and milton friedman said the same thing helicopter money would just scatter money over over the country and that will get rid of unemployment you know between serious the german economy is a very strong economy but it is an export economy and its exports have been growing why because basically because china has been growing very fast in the last year or so if china's growth. stops but gets less if european if european growth falters as a result of these cuts everywhere if american growth slows down then the germans will not be doing so well and i don't think they'll be doing as well as they are now in over the next year i think they're going to face a moment of truth when everyone slowing down is going to be very bad for the german

economy the german economy will slow down to you criticize the decision of the european leaders to withdraw all fiscal stimulation programs which have been operating over the last two years could this cause a slump in logic. i think i think it can i think the the with the withdrawal of the fiscal stimulus is very is very risky because it's been like a lifeline it's been a life support system. them and everyone said oh really the big big problem is the hole in the government finances that they're that they're spending much more than they're raising in revenue it's not the hole in the government finances that's the problem it's the hole in the economy that's the problem and you know if you if you deal with the hole in the economy that the finances will get better automatically because revenues of the revenues of the government will increase and their expenditure on unemployment will fall so you deal with the economy and the budget

will look after itself more or less i'm that's an exaggeration while leaving the economy to one side and one of your interviews you set that russia could provide military defense to the european union under what conditions could this happen. well what i meant by saying that russia could support europe in security matters was that russia should become part of the european security system and i think the simplest way to have done that would have been for russia to become a member of nato which is i think something that putin wanted when he was president but they did they didn't want russia in but that would have been the simplest way but as it is russia should become a much more effective part of the european security system and not the outside because the european actually european military is very very weak the

very to military power in europe the french and the british the rest have to do anything really but this small and there's no unity. sort of nato agreement to create something larger and russia has a has a has has good military forces and they have become increasingly modernize and specialized to the kind of work. that military forces have to do today which isn't to fight huge wars but to be part of a counterinsurgency operations peacekeeping operations and so on so russia could be a great asset for european security system and president medvedev has suggested a new security concept that would include russia and we should we should take him up on that and really see we'll walk we can do with it because all through russia is part of europe it shouldn't be outside it. thank you very much for your time.

more news today is once again flared up. and these are the images the world has been seeing from the streets of canada. trying to corporations rule the day.

to live in a country that don't understand that there's more violence in the streets of this country than there are in the streets in afghanistan or baghdad. comes. from one man in a desperation to be a man breaks or the. bottom is too much to the murderer fall and mum. crowd gathers from a real benefit dollars from the dollars to. if

. the motion would be soon which brightened if you move out soon from focused impressions. of these firms starts on t.v. dot com. breaking

news here on august up to fifteen people have been killed by a suicide car bomb attack in the central market in the southern russian city of lot of tough times more than eighty were injured in the terrorist blast with ten people now in a critical condition in the forehead the power of the explosion was a quick look at the faulty kilos of t.n.t. . of the column splode it. was identified in the neighboring republic of chechnya the man has said he sold the vehicle to a bae he doesn't know russia's emergencies ministry has sent a plane with

a medical help for the injured for days have promised financial compensation to the victims' fund. and we will bring you more on this breaking news story out the top of the hour latest news though the meantime we delve into the world of business with covering. my. hello welcome to our business program good to have you with us now russia's ranks sixty third as a competitive nation according to the world economic forum that places russia roughly in the middle of one hundred thirty nine countries on the list that is based for measured combativeness and twelve different ways including education labor market efficiency and innovation total and took first place followed by sweden and singapore. politicians at least in some countries have given up the pretense of a canonical covering president obama this week call for another round of public spending to prevent a slide into depression but the debate is finally ballast with others and you have

to tell them to cut spending and bring down deficits little bit parts. direct about not the one hundred eighty billion dollars into the u.s. economy after a data suggesting the economy from house prices to jobs is shrinking again. debating whether more spending will end with a kid of contraction in the land of the rising sun the russians to face a choice for the next few years we seem pretty sure that. we see a combination of private increase spending which we believe. i believe to be private capital will return to russia over the next twelve months in a meaningful manner secondly we do see prescreening from the government as well combination with two should be the basis for we believe to be five to six percent growth over the medium term the government plans to borrow more for the money this

year but also spend their means of this to build zeeshan on domestic borrowings already accounts will receive fifty million dollars and russia will be ready to you should you are going to november for you to finance ministry motion will be same store will be boring a lot in any case it. deficits of three point six percent isn't dissipated next year we also for close to twenty twelve deficit will be three point one hand two point nine to twenty thirteen the current situation has forced us to borrow and we will be spending from the reserve fund next year. the reserve funds have shrunk to a third of their former size when that runs down a little hole in the russian budget unless the government can pump up its moorings or one buyer spluttering to state companies legs barry bonds with presidential elections less than two years away analysts say politicians will rule spending cuts off limits you know any minute of business r.t. must. the volume of corporate lending has picked up in russia helped by lower

interest rates to discuss the outlook for the russian banks banking sector i'm not dong live but john gambling managing director from standard and poor's thank you don for coming into the program and speaking to us about this now the u.s. government debt crisis seems to be getting worse again. what impact is it likely to have bags. i think you're right that the crisis is seems to be getting worse in europe but i think for the russian banks i don't think it's too much of a problem as yet. the russian banks do not have large explosions to the euro zone don't have big exposures to the greek banks greece itself or spain or island or italy. and they don't have subsidiaries in that region as well so i think that yes it will have an impact some probably more on refinancing their ability to get funds from european banks could be

a bit stifling the money in banks themselves in that situation well i think. they still have banks they still have a lot of funds coming in and they still have the support from the european central bank. so you know i think there is still a push to get the banks to lend. but you know the moment it seems to be ok ok but judging by the situation do you think that the proportion of bad loans likely reducing here in russia yes it is you know we have seen from probably the end of last year and two thousand and nine that there has been a gradual reduction in problematic runs in russia. we feel that the problems of peaks in the starting to come down. that being managed. in a better way and that. emphasis on collecting. and the environment is

slightly getting better so we think that makes our assumption that problematic wins and that's non-performing loans plus restructured. will be about the peak around about from three percent the banking system or banking lending assets we still think that it's about right. now we also see that corporate lending is picking up at the moment why is it recovering now to take but i think we're all seeing a pick up i think that it's a fairly modest pickup compared to if you go back several years like. the banks have a lot more liquidity now and they need to place that we're seeing that interest mountings are coming down there's a lot more competition full of good bores here and the banks need to start lending again to get that mountains back up and to improve their profitability. and once they improve their profitability and hopefully that capital improves and therefore

they can remember the moment it's a fairly modest pick up we you know we speak to a lot of banks and some banks are looking for you know high levels of language with others of being much more sort of moderate in their approach but you know there is a. a limited number of. big corporate boards and there's a lot of competition from well thank you very much john giving from start of postings for joining in the program thank you my pleasure. and time to check on the markets now and europe stocks are gaining this hour lloyds bank shares are rallying more than three percent up to vaucluse capital that it's waiting from on the way as a bouncing back slightly after chaz were upgraded by fitch ratings investors reacted positively to the news pushing share prices up by one percent. here in moscow the r.t.s. is up over one half percent this hour the my six is up just over a percent in the games as ross telecom up more than five percent and energy shares

are also performing gas from a new coil are up about eight percent. well just credit rating outlook has been upgraded to positive from stable by fitch ratings the reasons for the boost accelerating growth stabilizing banking industry and a flexible exchange rate policy from the central bank fitch said it may further raise russia's credit rating if the government reduces the country's vulnerability to swings in oil prices plunging interest rates have led to a three fold rise in borrowings on the syndicated loans market by russian companies corporate loans have jumped by twenty billion dollars from just under seven billion dollars from the year before for example local took on an unsecured loan this year at about one percent above into bank rate last year a similar but secured loan by the same company had an interest rate four times higher. russian kamarck it could return to pre-crisis levels in three years' time that's according to a new research from off to stop russia would then be on the road with other top

kamarck it's like have a many market watchers warn growth won't be quick enough to stop predicts russian sales will be less than two million vehicles this year. and russia's economy has a long way to go before the ruble becomes an international reserve currency bat's a dominant view from a conference focused on the prospects for the russian currency he steps according to analysts should be the boost to boost the government bond markets stabilize and diversified us economy and lower the inflation rate however the president of the massacre change says russell is making progress. getting the rouble to be accepted in subtle suits this is because of step and this is the first step towards the goal of making rulers of course pulled right. and russia has to nominate its chief elector pulse of solace nominate as chief elect to pasta to the board of norilsk

nickel this extraordinary election essential for twenty eight the votes being repeated after accusations of cheating during an earlier about two principal shareholders and into ross have completed full control of the board the list of candidates will be submitted on september twenty first at the latest. that's all for me i'll be back with another update and less than one hour. they managed not only to stay alert. but to keep their faces and souls in inhuman circumstances. nine hundred danes in busines doing ran through the eyes of

a survivor. this history still keeps its secrets but now it's time to reveal. the soviet files in case ethanol on the. wealthy british.

market. find out what's really happening to the global economy with mike stronger for a no holds barred look at the global financial headlines kaiser reports. every month we give you the future we help you understand.