eat. fish. fish fish fish. fish. this is r.t. within twenty four hours a day top stories now at half past the hour in the russian capital the u.s. is under mounting pressure to stop its drone attacks which killed scores of civilians abroad medicine who also fear the technology might soon target them for surveillance purposes and. international monetary fund is lending egypt three billion dollars to recharge the economy but questions are being raised as to who exactly this money would help. and the greek government is starting a new austerity drive aimed at securing

a new international financial lifeline commit massive public protests but economists warn rallies a lot at the states could follow the narrative of greece is being bailed out again . well as greece stretches the credibility of the euro even further next cross-talk debates what solutions they could be to the single currency crisis and even if the project is worth saving it's a debate in course talk is next. can . stand. alone and welcome to cross talk i'm peter lavelle saving the hero 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 euro system and can the politics of the euro serve the interest of all in this currency zone. can.

cross thought the year was by ability i'm joined by andrew moravcsik in princeton he's professor of politics and director of european union program at princeton university in washington we go to sherry's raymond she's a professor of international business finance and international affairs at the george washington university and in madrid we cross to philip obviously he is an associate professor at king juan carlos university he's also author of the tragedy of the euro ok folks this is crosstalk 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 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 depend on 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 shoot solitary tea and say that these countries can't continue as before we can't have a common currency but some get lots of education time and others very little that would work in the long term 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. mr

evil. more costly it is there's going to be the costs are easy to see and predict if germany gets its hardness fiscal way of forming the eurozone there will be more entire 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 it 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 over. much more patience with her and for what does not serve all my search area across party. ok to start off i think go to philip in madrid hear i because we did 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 understatement for you or is it accurate and looking at the condition of the euro. i would say that and understand that this set up of zero system. it's it's needs to self-destruction the problem is that we have several independent governments that can use one central banking system to. finance deficit and it and this has coerce and centers for politicians to have to finance these deficits and you via the central banking system thereby externalizing the costs of price inflation to other countries so i think that it's from the road the system is bad all right all right here is our if i go to you in washington are

you that pessimistic i mean we were i'm reading in the press right as we do this program here that sixty or seventy billion more dollars could be funneled into to greece ok that's on top of already what's been put in there i mean is this money well spent because it is greece is such a small part of the eurozone but they want to save it ok why don't we the euro zone 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 save it 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 that's 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 st and the integration is not in sync go ahead. well i'm inclined to agree with 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 countries but more in terms of the political elite and the citizens so of course the political elite of france and germany and greece want the euro to

continue and of course also the venting system that the drone banking system the french speaking system that this lent to repair and maintenance of the government but it's not and maybe also some export us exporters want to continue but for a german consumer this is not a very and picks player this is not a very good deal with the america. they could import cheaper auto companies could import meant for resources ship or they could be occasions cheaper and we could buy vacation houses much cheaper. so they are now losing and it would be better to erase the difference in the conflicts in these terms the political elite and bankers versus and come and take space and consumers tears out if i go back to you in washington when it was dangerous interest i mean if i could just interject hearing it i mean philip really 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 etc etc i mean it seems to me that that's the two tier thing here banks failing 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 it's the i left or it's other banks bailing out banks but this is this is a little more serious you're talking about trade precipitating in 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 trying to invent a financial crisis to repeat itself of what happened last spring and that will affect not only europe but all of us here in the united states as well ok andrew i

mean for it's kind of a slippery slope here because this is what's happening i mean there is this tendency all well i'm in trouble i have carried all this money i lied about it especially in the case of greece and now we need help so germans really come out ok for i mean we see this time and again. so here's the question cher assads 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 they 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 germany creditors and french creditors to aso take a haircut or pay some of the costs of settling the debt 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 we

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 and also the banks share the cost of resolving the crisis it's interesting you think it will 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 you keep going up the ladder to get more money you do it maybe star voth real reform in the euro zone. because the banks have have been shifting probably some essence from this financial crisis on who you know the truth and central banks and the taxpayer or the the c b has bought or already more than one hundred billion euros or. as it's from banks of. covered bonds from german banks but also a weak government bonds portuguese government bonds and i don't think that bailing

out banks that's really the best solution because it creates a more hazard problem which has brought us to a large extent for in the through this financial crisis in the first place that people thought i think i thought they would be a bit odd if they would have probably a lot of government but still available let me jump in here so you're saying don't bail out the banks what would happen then if the banks want to build out how would this affect the euro zone if it wasn't of course the problem to fan interest system would. who would collapse at least the banks that i am in 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 like had to go andrew jump in go ahead. but this is the this is the kind of radical thing we want to avoid i mean mick 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 down 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 i'm not i'm not very a finalist and i don't any let me jump in here after a short break we'll continue our discussion on the euro crisis stay with r.t. . and.

and nine hundred eighty two dr ralph minster at the university of pennsylvania said what if i can take the gene responsible for growth in human beings and put it into a mouse. on all the main risk issues. ninety five percent of all competent scientists in these fields are working for the produces side and only five percent are read genuinely independent. there's not a lot of science that says transgenic fish is unhealthy for people to consume which is what the food and drug administration looks at there's a lot of concern about the environmental impacts if it transgenic fish escapes what kind of horrible impact will it have on the rest of the fish population i don't know what this might do to us or our children or our children's children in our

congress here in the united states or our legislatures rather will be avoid all these different laws tax laws and corporate laws what can be more important then deciding on the feminine genetic future of life on earth. fish. fish. if. you. you can. still. listen to. the live. welcome back across i'm peter lavelle to remind you we're discussing the

euro and its prospects live kick. start living. 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 eurozone is it really having a positive impact because we see that contains and spreading not contracting everyone's talking about spain now and then italy's on right after i had. and there are 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 the latin american debt problems were addressed in the one nine hundred eighty s. in 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 got i.m.f. money or got increased 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 she decided to ask you in washington i mean how much more austerity is that entail because well 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 obviously just someone just visiting for a few days i mean he what point is it politically viable or does it with me go ahead. i think they're going to need

a lot more austerity you know you 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 relatively simple they have a huge federal pot of money was a useful bail out so they have to establish standing 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 cause for a eurozone finance minister now to oversee 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 phil so there's that 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 this and there's 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 so dangerous and of the interest of the

euro the euro produces this crisis through its incentives. in this crisis of any use for more centralization what is that. those two words sent for government to send us from supposed to in brussels so this is. the problem to see i don't i don't think it will come back to him with it's a good idea though it would be in any case justified to make german or french taxpayers pay for greek deficits or to beto german banks. i think we could through your money in a moment a little bit ok here's a jump in go ahead this is the way this program works. i'm jumping at i mean i mean what did you expect you know you you allowed greece to come into a 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 that being the consequences for everyone saying the consequences for us ok why should fix picks pay the confort consequences but i think germany when we have drawn attention here is should pay the cost for two grand and are used to pretty cost for a not 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 the national you know they should they benefit from it because german banks are kept solvent 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 collapse in germany without it and they should pay for it because german banks lend 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 should pay some of it but most of it should be covered by banks creditors who lent the money accepting a less than one dollar per dollar of debt owed that's what happens in the normal i.m.f. as you mentioned we're not talking about some enormous european sovereignty shift we're talking about normal international practices for resolving the crises and that's what should be applied in europe go ahead philip jump ahead well i don't see them or i room invited to them taxpayer food should be liable for any action that some german bank did so i think that the i didn't read it the owner i think of this as they get it and i think it's the myth it's the myth that the low it changed rate

makes makes it any richer i mean if germany would have german swiss have a much higher pushes empowered to put is good from the eurozone front from i would say they are losing by this it might be that some exporters what and my point is what we need is you should use this moment to do or form a through reform with the financial system that this could should not happen again like a one hundred percent gold standard goods which would make all of these high bits and deficit impossible gerry's that you want to jump in there go ahead. yeah i do want to jump i think philip is forgetting that when the german taxpayer is elected the german government would signed 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 then they got married to the greeks and

now there's no divorce do you think what what what what is a vote to determine who would vote in one thousand nine hundred why would he be responsible for any action that his government why would he be responsible for the signing of the must be. actions i don't see this responsibility philip you have a philip you have a double you have a double standard here you say to the greeks that they're responsible for whatever their government did even if it wasn't in the interest of the country but when it comes to the germans and their government 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 it why everybody is response every government is responsible for its actions in the modern world and for your 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 to that maybe it was a misunderstanding i didn't even want to say that the greeks would be responsible

for their governments for actually would. agree to the forward on their government ok here's i don't know this could be my next question why don't the greeks just do it ok just default say we we don't belong at the adult table we screwed up we lied through our teeth are german friends in our italian friends and our friends all knew it but you know will 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 game playing adult at the table and so they're trying to behave by all the rules that adults play by at the table because i believe 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 greece 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 had to be in the gutter friedly in the middle man or what they do they'll be in the gutter for at least a decade or a half century but you could be in the gutter for a long time all right i'm going to switch sides here so that you know if you're in shares with cherries up against a pillar because i don't believe a gold standard is appropriate to 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 prest 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 e m you without using depreciation without using

independent monetary means alas you have the cooperation of the international system so if we can't get the middle solution then it could really to understand weaker countries should get out of the euro we should go to a true tier system cheers i go ahead. andrew andrew there's a big difference been befall thing on this particular lawn 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 for her and 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 here we are back at the table trying to restructure this debt you know a default is an option i don't think they want it yet but leaving the euro zone is not an option ok for

a lot of you greeks and we will last word in the program what's the future of the euro well it depends certainly on the words petitions to and what the pollution story we depend of if the drum relation be you will be subservient to their government and not protest and if the big parties want to see them see if the people want to do so and are more goads or if there is my view tea party as you indicated before and of course also in the countries ourselves thirteen measures. it will depend if they are willing to go forward with a measure of if the. budget will run out of time here we could have seen a lot more many thanks my guest today in madrid washington and in princeton and thanks to our viewers for watching us here are great see you next time and remember crosstalk.

wealthy british style it's not the best.