these are the images the world has been seeing from the streets of canada. trying to operation today. this week's top stories in our c film abortion and so on the trail runs cold ladish denies charges of genocide a mass murder in front of the hague tribunal while serbia waits to see turned him over will do anything for if the membership cards. played his deployment of a top helicopters in the background a three month extension of the mission sponsors russian concerns that the military campaign could be moving is to close a total ground operation. on spain's already troubled economy takes another blow after a mistake in trying to accusations that punish vegetables caused the deadly e. coli outbreak said of the country's exports internet has died. and has

greece structures the credibility of the euro even further next cross-talk debate show host peter lawwell also has got what solutions than my be to the single currency crisis or indeed if it's a project worth saving. for the. we've got. the biggest issues get a human voice face to face with the news makers. can .

follow and welcome to cross talk i'm peter lavelle saving the euro in the financial and political costs of doing so is it all worth it there's a euro project need a serious rethink should there be a two tier year old system and can the politics of the euro serve the interest of all in this currency zone. can. start. to cross the year was by ability i'm joined by andrew moravcsik and princeton he's professor of politics and director of european union program at princeton university in washington we go to sherry's i raymond she's a professor of international business finance and international affairs at the george washington university and in madrid we cross to philip bagus he is an associate professor at king juan carlos university is also author of the tragedy of the euro ok folks this is crossfire that means you can jump in anytime you want and i very much encourage it but first let's look at a short report on the plight of the euro. the trials and tribulations of

a currency or the euro and those discontents no matter how you cut it or count there are no easy solutions when it comes to resolving the euro crisis the financial costs are high and long term and the political costs are probably even higher ever since greece exposed the weakness of the entire euro project politicians and central bankers have been at loggerheads the single currency was always going to be the member states exercising fiscal discipline and boosting their competitiveness to achieve convergence this is always been the theory behind the euro but it's reality has played out differently on the ground we can't just choose solidarity and say to these countries can't continue as before you can't have a common currency but some get lots of occasions time until there's very little that will work in the long timing is not on the side of the hero greece was a test case only to be followed by ireland and portugal and now probably spain

european elites one another bailout on harsher terms while greece is asking for more funding on easy terms something is going to have to give and one of those political discontent will arise as well reform and pain are in there in equal measure doesn't help in the worst of the second world war but the longer you. necessary evil. the more costly it. is going to be the costs are easy to see in predict if germany gets its hardness this whole way of forming the eurozone there will be more and higher staring riots across the continent if the greeks get their way that is easy terms and easy money then there could be a tea party revolt in germany that could see the euro implode for too long european governments turned a blind eye to weaknesses at the heart of their project today politicians have found just enough resolve to avoid immediate disaster given the events of the past year it is an open question whether the populations of the eurozone have. much more

current for this month's are all equally russia china across our team. ok to start off i'd like to go to philip in madrid here i'd like to read a few more words from angola merkel she said we don't have a problem with the euro as such it is a stable currency particularly because of the the dollar it is quite strong sometimes too strong for us as an export in country a nation we have problems with certain member states and their debts is that under statement for a year or is that accurate and looking at the condition of the euro. i would say that and understand meant this set of a year of system. it's it's needs to self-destruction the problem is if we have several independent governments that can use one central banking system to. do or finance deficits and that and this has coerce and centers for politicians to

have to finance these deficits that you via this central banking system thereby externalizing to of course by price inflation to other countries so i think that it's from the roads the system is bad all right all right here is that if i go to you in washington are you pessimistic i mean we are i'm reading in the press right as we do this program here it sixty or seventy billion more dollars could be funneled into to greece ok i was on top of already what's been put in there i mean is this money well spent because you know is is greece is such a small part of the eurozone but they want to save it ok why don't we just cut its losses right now and because you know we're going to have other countries following suit i mean i want to talk about the slippery slope later in the program but is this project worth saving and can it be saved. well i don't think they have a choice they have to say that too much political investment has gone into this

project they've gone too far you can't just go back and reintroduce national currencies at this point the market will hammer these countries so they have to spend the money there's no choice ok if i go to you andrew i mean i feel a lot of money to spend here i mean i mentioned in my introduction why can't we go to a two tier system i mean some countries are in this not up to speed their economies are not in sync and the interest ration is not in sync go ahead. well i'm inclined to agree with you harris that there are enormous common interests in keeping this system together because it's not just germany versus greece germany and greece are on the same side in the sense that it's germany and france that lent much of this money to greece so if greece goes belly up a lot of banks in germany go up so they need to work together the question is whether there's a middle solution between just shuffling more money from germany to greece and cutting them off ok it's interesting. right go ahead philip should go ahead ahead

go. i think we should not think so much in terms of figure with countries but more in terms of the political elite and the citizens so of course who put it to could it lead or france and germany and greece want the euro continue and of course most of the banking system that the drone banking system the french play consistent with this lend to repair and maintenance every government but it's not and maybe also some export us from export us want to continue but for german consumer this is an order of and picks players this is not a very good beer with the indian market. they could import cheaper auto companies could import net for resources ship or they could be patient cheaper and we we could buy a vacation in houses much cheaper. so they are now losing and it would be better to

raise the difference in the conflicts in these terms the political good and bankers versus the common place payers and consumers carries out if i go back to you in washington when it is one of the things it is i mean if i could just interject hearing it i mean philip roth does bring up a good point i mean if you agree or disagree with him a lot of these bailouts are about banks failing our banks isn't it i mean are they thinking more about their friends and making sure they get a return on their investment eccentric cedric versus the average person in the street about having a job are paying higher taxes eccentrics federally it seems to me that perhaps the two tier thing here banks saving banks saving economies is the second after thought . let me let me jump in here i think that it's a little more than that you know in crisis you know yes banks bail out other banks where it's the i.m.f. or it's other banks going up thanks but this is this is a little more serious you're talking about trade precipitating a contagion across into spain probably and then who knows where else and so is

trying to avoid another crisis situation which then not is this a little bit higher up than just banks dealing out there we're trying to invent a financial crisis to repeat itself what happened last spring and that will affect not only europe it will affect us here in the united states as well ok and remover it's kind of the slippery slope scenario here because this is what's happening i mean there is this tendency you know well i'm in trouble i have pirate all this money i lied about it especially in the case of greece and now we need help so germans would come out and pay for it i mean we see this time and again. so here's the question cher assad's right you have to bail out the banks if there's one thing we learned from the last couple of years and from the great depression it's that if you don't bail out the banks then everybody in society is going to pay on the other hand philip is right that you don't want to stick the whole bill on the german taxpayers so the key to the solution to this problem is to find

a way for german creditors and french creditors to aso take a haircut or pay some of the costs of settling that that problem which is the whole issue of restructuring this debt in the medium term in such a way as to make it sustainable so that's what i was talking about before but you need to find some sort of a solution in between just cutting the greeks off and bailing them out down the slippery slope as you say we need to find something where the greeks and the germans but not just the taxpayers also the banks share the cost of resolving the crisis it's interesting he said he'll do you think banks want to share the cost of resolving this crisis because then they'll just go to the i.m.f. ok i mean and you keep going up the ladder to get more money to do it maybe start off real reform in the euro zone. we of course beings have have been shifting

trouble some said from the financial crisis on hoover to nod towards the end center of bangs and the general taxpayer of the e.c.b. he has bought or already more than one hundred billion euros of off assets from banks of. covered bonds from german banks but also the government on support of these alone bombs and i don't think that bailing out banks that's really the best solution because of it creates a moral hazard problem which has brought us to a large extent for in the financial crisis in the first place that people thought a banker sort they would be better of if they would have probably a lot of government but still it was let me jump in here so you're saying don't bail out banks what would happen then if the banks one bailed out how would just affect the euro zone it was a golf course pro probably the financial system would to. woods who would collapse at least the banks that i own bed share shape and then there might be better ways

to put them on a stable ground again of course shareholders would lose everything and let me jump in radio this is to go andrew jump in go ahead. the but this is the this is the kind of radical thing we want to avoid i mean even if it were true in retrospect that regulating banks and offering to bail them out created a moral hazard here we are we're in a situation where people have made these loans and we don't want to mortgage all of the economic prosperity of society now in some kind of a neo liberal experiment we've lent the money and we now want to avoid as she has rightly said a kind of contagion effect that brings stand and tire economies into a scenario like the great depression but the key is that banks which will benefit from an orderly restructuring of this rather than some kind of apocalyptic collapse

need to share in the math on that very a final if they don't and you let me jump in here after a show break we'll continue our discussion on the euro crisis stay with our team. more than a month. in one of the most extreme environments on the planet this is antarctica and people have to be aware that they're far away from civilization sean thomas discovers five make sounds hartigan so special and attractive for many the wildlife in antarctica is the closest and the sun's an. expedition to the bottom of the earth our teams.

will. review the latest in science technology from around the world. we've done the future coverage. and keep. in touch. welcome back across talk on futile about remind you we're discussing the euro and its prospects. to kick. start. ok andrew i'd like to go back to you before we went to the break we're talking about whether to bail out banks or not but there seems to be so many bailouts going on in the your euro zone is it really having a positive impact because we feel it contains and spreading not contract ing

everyone's talking about spain now and then italy's on. no i'm not arguing for bailing out banks i'm arguing for avoiding the need to endlessly go down the slippery slope of bailing out banks and the way to do that is to move toward orderly restructuring think about the way that latin american debt problems were at the rest in the one nine hundred eighty s. the one nine hundred ninety s. between the u.s. and latin american countries what happened was people negotiated a restructuring of the debt american banks took fifty cents on the dollar sixty cents on the dollar for some of that debt paying their share for having made imprudent debts and in exchange for that latin american countries god i.m.f. money or god increase private money it's that kind of sharing of the costs between . german and french taxpayers german and french banks and greek. banks and society that needs to take place right now that's not going on and that's

the middle solution between just shuffling money around on the one hand and cutting off countries from the eurozone on the other to which we need to strive to decide if i can ask you in washington i mean how much more austerity is i mean tale because really you know we look at these nice words reform restructure and all that but on the ground is austerity and it really is stinging i was in greece not long ago and that austerity is really quite obvious that you could do something just visiting for a few days i mean to what point is it politically viable that everything go ahead. i think they're going to need a lot more austerity you know you were talking about it least another decade of a lot of pain let me just backtrack here in terms of this miller ground there we've been talking about andrew they have a middle ground in principle it's a relatively simple they have a huge federal part of money was a useful bail out so they have to establish that in keep it there but they also have to have oversight of the countries that they have bailed out which is where

they're leaning towards so there is you know sort of calls for a eurozone finance minister now to over see these countries that have been bailed out and have fiscal oversight over them and that's a uniquely european way about going things and they're probably going to end up doing that ok hill so that does not mean just another step towards moving away from sovereignty and for these individual states where it's going to brussels and frankfurt going to tell everybody else what to do with economies ok you have to do this business and a lot more pain is going to come your way and you know what there's nothing you can do about it. you know this is a dangerous for the most dangerous of the euro that the euro for you since this crisis through the incentives. been in these crisis of the news from north central reservation what's the step for those two words sent for government sent from supposed to in brussels so this is. the problem

that see i don't i don't think it'll come back to it it's a good idea i know it would be in any case justified to make german or french taxpayers pay for greek deficits or to bail german banks. i think we could through your money in a moment a little bit ok go ahead gerry jump in go ahead this is the way this program works go right ahead and i'm jumping at i mean i mean what did you expect you know you allowed greece to come into the big boys club on both sides you know of course we were not sure if they're going to behave fiscally are not and the greeks understood that they're playing with the big boys you know and they have to stand on their own this is an opportunity when they join the euro twelve years ago for them to clean up their house and they chose to have an extended party instead and now they're paying the consequences for everyone paying the consequences for ok so why should. taxpayers pay the confort consequences but i think germany when you're on

a social areas should pay the cost for good clean and are you pretty fast for a no ok they should pay the cost for a number of reasons one reason is because the german exchange rate is lower than it otherwise would be because they're in the euro and germany benefits from that witness their enormous trade surplus which is almost as large as their. they should they benefit from it because german banks are can't solve because as we all agree all three of us german banks would go belly up bringing about what philip himself called an economic crisis or or a collapse in germany without it and they should pay for it because german banks lent the money and made that the loans and should pay some of the cost and once again i'm not arguing. and i don't think anybody ought to be arguing for a purely taxpayer funded bailout taxpayer should trip pay some of it but most of it should be covered by banks creditors who lend them money except being

less than one dollar per dollar of debt owed that's what happens in the normal and i.m.f. it is you wish and we're not talking about some enormous european sovereignty shift we're talking about a normal international practice is for resolving the crises and that's what should be applied in europe your head philip jump in go ahead but i don't see them nor i room invited them to eat food should be liable for any action that some german bank did so i think that the work rate of the owner of this was so you get it and i think it's the myth it's the myth that the low it changed rate makes makes that any richer i mean if germany would have their own swiss have much higher pushes in part to put chase goods from the eurozone front from i would say they are losing but it is it might be that some export as what and my point is what we need is we should use this moment to do reform or some rule before most financial system that this

could should not happen again like a one hundred percent gold standard but which would make all of these high bits and deficit and possible cherries i do want to jump in there go ahead. yeah i do want to jump i think philip is forgetting that when the german taxpayers elect or the german government would sign the maastricht treaty which created the euro and allowed also in the end greece to enter the euro zone. this is a legal obligation and i'm not advocating taxpayer is going to simply hand over their money clearly there's a lot more to it as andrew has mentioned but there is a legal obligation here they allowed them when they got married to the greeks allowed there's no divorce do you think what what what what is the vote of german vote in one thousand nine hundred why would he be responsible for any action that his government does why would he be responsible for the signing of the must keep. at it since i don't see this responsibility philip you have a philip you have

a double you have a double standard here and you say to the greeks that they're responsible for whatever their government did even if it wasn't in the interests of the country but when it comes to the germans and their government there's something that you say maybe it's true is not in the interest of their their population then all of a sudden the population is not responsible for why everybody is response every government is responsible for its actions in the modern world and if the actions are those that don't turn out in the long run to be in the interest of the country well then you have to adjust ok maybe it was a misunderstanding i didn't didn't want to say that there would be responsible for their governments for a flea would recommend. to be followed on their government that ok here's what i don't know this could be my next question why don't the greeks just do it ok just just say we we don't belong if you don't table we screwed up we lied through our teeth or german friends on our italian friends and our friends knew it but you know

we'll we lied so we're going to have to start from scratch and we're going to leave how would that impact the entire euro project. well here's the here's the catch this still this team playing adult at the table and so they're trying to behave by all the rules that adults play by at the table they can't leave if they leave the euro zone they'll be in the dark ages for the next fifty years their only future lies within the euro zone and basically the germans and the french amongst a few others are going to essentially have control over their fiscal house for the next decade because of this bailout if you know things go down the road legislatively as they are seeming to to have fiscal oversight over the bailed out countries so they're going to be supervised as all teenagers are joining in and out table and you see the greeks are going to be in the gutter friedly in the middle matter what they do they'll be in the gutter for at least a decade or half a century but you could be in the gutter for a long time all right i'm going to switch sides here so you know you're a sheriff with terrorism against goliath because i don't believe

a gold standard is appropriate for the modern world but the reason i don't believe a gold standards are appropriate for the modern world is because i don't think you can impose on countries too much austerity and too much outside control so if the middle solution proves to be impossible if the german banks won't pay if the german taxpayers won't pay if the greeks want to just and you can't negotiate that middle solution that shares and i think would be the best solution then i think it's better for the greeks to get out and default because it's really not possible to adjust within the confines of the new without using depreciation without using independent monetary means unless you have the cooperation of the international system so if we can't get the middle solution then if they don't really to understand weaker countries should get out of the euro we should go to a two tier system cheers i go ahead. andrew yeah andrew there's a big difference been defaulting on this particular loan and getting out of the

euro zone you know defaulting is an option but they'll probably restructure look when the first loan was given out last spring four hundred ten billion euro everyone everyone knew that there's no way the greeks are going to pay this back it was simply a matter of when would be the most appropriate time to restructure this when the markets are calmer because we don't want to instigate another scare so we already knew the restructuring was coming everyone knew this and so we here we are back at the table trying to restructure this debt you know a default is an option i don't think they're wanted yet but leaving the euro zone is not an option ok for greeks and we will last word in the program what's the future of the euro well it depends certainly on boards politicians too and what population still it will depend of it's a drunk relationship people will be subservient to their government and not protest and if the big parties want to see it and see if you and if you want to loose and

are more bold or if there is my new tea party will loosen its indicated before and of course also in the countries of that i was thirteen measures. and it will depend if they are willing to go forward with this austerity measures or if. it was all run out of time here we could have seen a lot more many thanks my guest today madrid washington and in princeton and thanks to our viewers for watching us here r.t. see you next time and remember crosstalk.

the close up team has been to the grand reach thank you know the turning point of the war to. this time r.t. goes to the region where half of the area is occupied by a nature preserve. where the.