twenty years ago in the largest country in the systems in place of the things. which have been instrumental in each began a journey. where did it take. seven thirty am in moscow artie's latest headlines and top stories from the week the death toll rises to forty seven following monday's passenger plane crash in northwest russia has two more die in the hospital one of them a teenage girl the flight came down just a kilometer from the airport but investigators say there's no sign of mechanical failure. casualties in the libya conflict continue rising while rebel forces are accused of forcing civilians from their homes in benghazi tripoli says fifteen

people were killed in a nato air strike in the eastern town of breda a claim the alliance denies. skeptics in brussels stage a euro funeral as greece faces public anger over deeper cuts in the country teeters on the brink of bankruptcy a vote expected tuesday and if the greek parliament passes the austerity measures athens will get another round of ballots to stave off default and economic growth. next could europe be facing a completely new economic reality peter lavelle and guests debate the euro and the impact the greek crisis had on the currency cross-talk coming your way. kick. start. low and welcome to cross talk i'm peter lavelle hero and it's meeting with destiny

the greek government survives a vote of confidence as its crushing debt ordeal continues unabated but this appears to settle little if anything the u. still has to decide whether it will continue to rescue greece from crisis his doubts mount whether the euro project has a future. we can. still see. the prospect the prospects for the euro i'm joined by vanessa rossi in london she's an associate fellow in international economics a chapman house also in london we have robert oulds he is director of the bruges group and in washington we go to garrett jones he's an economics professor with the market to center at george mason university her right this is crosstalk and that means crosstalk rules in effect that means you can jump in anytime you want but before let's look at a report about a country that may bring the eurozone to the brink of collapse. the eurozone is facing a crisis in which few can predict its outcome as financial markets and leading

banks grapple with the greek debt debacle there are serious questions about the viability of the euro as a currency and whether greek default will strike a critical blow to this monitor experiment. overburdened with crushing debts greece is fighting for its financial and political life as lawmakers defend unpopular us charity measures meanwhile the european union the european central bank and the i.m.f. say these measures are the only way to revive a second the conna me your country is undergoing a crucial moment we're obligated to ensure the future but future of our country with a sense of national charity facing the present difficult and multi-faceted crisis in a decisive way the upcoming meeting in luxembourg will determine whether european officials are ready to issue a second bailout package worth an estimated one hundred twenty billion euros this will extend reeses year old one hundred ten billion euro deal unfunded into the year two thousand and fourteen the package will however until still yet another

round of sweeping austerity the first condition to have success if we speak about to greece he said greece. and that greece is stable can deliver only a spot and if greece this its part i think you can you know has to do its part because it is in our joint is not our common interest. this is financial woes overblown after all many policy makers claim greece is too small to cross the kind of economic impact that would change the course of the euro and the health of the global economy and during their last meeting in berlin german chancellor angela merkel and french president nicolas sarkozy assured that a compromise agreement would divert a meltdown and propose a strategy into the vienna initiative of two thousand and nine which type of melting eastern european debts. we have to move forward on this and i think it makes sense to involve the private sector this is important difference though the

vanishing of may have had its advantages it was implemented with countries that were outside of the euro zone and did not pose a threat of internal contagion and so many experts may be rightfully concerned that if greece were to go bankrupt it would sink the entire eurozone originally conceived as a geo political theory the very concept of a european union would also face a serious threat and for a good few of the e.u. founders could have anticipated the churning for across our team. ok vanessa if i go to you first in london oh i say around the july third meeting. the bailout for greece is really a done deal because they have to bail out greece don't they or the eurozone itself faces a idea crisis that none of us can predict. well i think there's certainly concern about what unpredictable effects may arise if greece goes into a disorderly default but on the other hand we've now been facing this greek crisis

for almost two years and this means that many of the players many of for example the banks the derivatives contracts the other private investors and i'm full time to review and understands their portfolios and there are risks involved and to some extent those have been reduced because of the official intervention more of this debt is now with the e.c.b. and affectively with the e.u. i.m.f. than was true before so i think we have to be careful about talking ourselves into a global crisis from this i think the potential to ringfence greece is much better this year than it was last year and you can see that confidence in my view is borne out by the way in which the euro has reacted to sheer last year if greece had moved to a disorderly default we would have been through parity against the dollar very quickly now we're talking about that possibility and yet the euro is holding much higher than it was last year so i think greece alone is not such

a problem the difficulties are that we will have to be very quickly containing any problems that arise in greece. the debt of countries that i think is something that the e.u. should be in hopefully house in working on to be able to prevent the spillover of this crisis ok robert if i go to you in london as well i mean why all the gloom we hear about the euro i mean the former from a foreign secretary jack straw said a few days ago that the euro can survive in it should just be given and sort of a slow death that should action should be taken to start dealing with going beyond the euro in this in that nothing has really been settled with greece is just throwing more money at it. absolutely you know greece is effectively passed and they're just delaying the inevitable what needs to be recognized is that the euro has been a political project which has caused massive economic disaster not just in greece but in italy portugal spain arland it benefits germany at the expense of other

nations within the eurozone it's a it was a mistake for those countries to join the euro is a mistaken project and it should be wound up and then only then will their economies in the mediterranean and in ireland start to grow and get their way out of the pit that they're in the euro is the root cause of the problems they're facing ok kara where do you stand on this we are two polar different point of points of view here where do you stand. well i think they're both of us and robert make good points but that's right having two years to get ready for this means that they're in a better position but if they are in a better position why are they so absolutely terrified of what they call a credit event and why are they so obsessed with having what they call an orderly default as opposed to a disorderly one. with robert what the question is always for europe has always been what will happen when one part of europe wants to cut rates another part wants to raise it economists across the board knew this would be a problem ten years ago and now we're facing it right now if it is what is it if it

is really you know no evidence of what is the difference between an orderly and just orderly i mean it's still defaults it's still bankruptcy what's the difference between the two but this is the trouble we thought maybe to tackle the immediate problem we have which is this very day it may not be a long time issue about how the euro zone management can change whether it can change and also look later questions whether it delivers growth or not for its member states but those questions have been around a long time it's not clear that europe is delivering growth with or without the euro there's a big problem with that but we have to tackle the youth is delivering the immediately when economic decline here you know this was a great crisis and there. is not necessarily say you are we have a crisis in what usually we have seen saying we're going to go in our little you know we have a we have a crisis in greece which probably wouldn't be the crisis before anyway greece was in and out of crises before it joined the euro zone but we know it was made worse by the e.u. this is the boy we already saw massively when they joined the euro and the date of

the current economic depression if you don't use call right now i know you're a fan gears carried a stepparent i'm going to go to you what is the euro zone a learn from all of this here and you know i'm not going to pretend to be an expert in international economics all i see is more money being poured into something i don't see real structural changes in the eurozone you know of course greece is this is do you mean why you didn't miles it'll be. question all right international going this is getting around your head of course first thing that let me come back because you asked me that question before and it's disorderly versus orderly we're now in a problem with greece never mind the other debate what is the difference here the part of the problem and it's true is that within the euro if greece defaults then there is technically an immediate problem for the solvent say of all this banking system and the party depends on how the e.c.b. reacts the c.p. has already been beyond almost the pale in terms of accepting poor collateral in

exchange for liquidity during all the crisis now if greece does default and that's made quite clear these t.p. is all going to resume forcible situation of having to ask well what happens if it's all silly or not this also means they're immediately having to ask but this money and this means that the greek i think system has an immediate problem as well now that could push greece to a very quick decision about leaving the euro but i think that part of the reason we're trying to buy time now and we're still trying to buy time is to allow greece to more carefully consider what exactly does it want to do because greece's rezone there is no choice to suggest or to avoid being on the politicians bases that's the key issue here they don't want to admit that the euro has been a mistake so they're doing anything that they can to try and paper over the cracks and try and hope the problem will go away in raising think that either you're in for you know the euro you're lying i was. holding one here

injured garrett jump in there go ahead ken. well the big to me the big lesson of this is not just the economic classes the political lesson which is that the periphery of europe has now learned that they can milk the european court for money for years and years and years and we can expect that to continue happening as long as the voters of germany and france allow it ok so do you want to go there and would you like money is going to this is the same on land that's the first affectively time has been called i mean this is what the latest statements from the e.u. are out there saying greece we're going to give you a last chance do you want to take that yes or no calling time on this but my only point first is that is that it should really be a time out because greece itself you can see this from the demonstrations and the problems in greece there is a democratic deficit in greece itself there's a lot of explanation will increase it and it's greece that should have to face up to what really it wants to do is the solution does it think that it would like to

leave your is a measure of the e.u. as the e.u. process is being dictated to rather you not have power over greece yes it does the you that you can use it however greece is not because taking the policies the greece must follow through to deal with. its they're the ones that are imposing the will still in one measure the long gracey not dictating what priest has to do what they're saying is they are because they have the money and you stating the terms. that you believe in germany you're sure break we'll continue our discussion on greece and the euro stay with r.t. . if you. still. want.

but i was just thinking about my future before the foreign companies came i dreamed of owning a can cutting factory. but we have less garbage now. some businesses who come here make fun of me. crazy about garbage boy i'm not bad like people think. i'm a good person. it's just the people don't see me. but i feel it was time people like me. that i feel people will start to appreciate us. twenty years ago the largest country in the. disintegrated to the list.

of. what had been many. began a journey. where did it take. more than a month. to one of the most extreme environments on the planet this is antarctica and people have to be aware that they are far away from civilization sean thomas discovers what makes antarctica so special the detracted from nearly all wildlife in antarctica isabelle's if you live in the flood zone. expedition to the bottom of the earth or exceed. the cake if. you want to. welcome back and ask our computer

a little to mind you we're talking about the euro and its future. ok karen i'd like to go to you in washington and a lot of the dissenters of what's going on in decision making with the euro and with greece is that they claim that bailouts are not for a great greece and not for its but federal budgets and whatnot it's to bail out banks in greece that have a lot of exposure or arms or german banks have a lot of exposure french banks etc in greece this is what the bailout is all about to save banks not necessarily a country's economy how do you say how do you see that. there's something to that but it's greek banks that are most on the hook here and i think greek depositors would be very disappointed if the e.u. just shut up or speak it tomorrow because they'd find out that all of their rates are just of altered vanessa how do you see that's nothing that any greek voter wants of course minister how do you see that because there is this there is

a perception problem that this is exactly part of the problem that if there were to be a disorderly default almost immediately the greek banks would probably shut down now actually a lot of people in greece have already worked that out and this is one reason why the pain picking creases in gold sales take a bout of withdrawals from to cause it's in order to protect the money so to some extent holders and it's been the c.p. providing liquidity so we already know that this situation has moved a long way towards assuming a default and therefore people are positioned for it but there will be some last poor souls that were to lose their money here and that's not a good situation in the banking sector problems could be very persistent it would take time to overcome that and greece would almost certainly go into an even bigger recession that it's now in if it chooses to go down this road if but i do believe so yeah it was a economic growth even sure whether they can recapitalize their economies. they were to leave you with the case things are really calm i'm sorry but i think you

know you're living in cloud cuckoo land if you think that greece devaluing will do any use to the greek economy thank you. and i think when you're in the united kingdom going to the sterling really really you're all in the united you are uniquely early history. you can jump in here and. change right mind is i am going to be here right now with. the economy grew that is the only way greece is not. the value they can have their own come and see the value that they value that i can see. i think we're going to change gears you know we're going to change gears here and we're going to change gears right now do you care in the state that robert robert please garrett. how much do you think of this is that i don't i don't see that there really any solutions out there i

mean i agree with that but yes of the you know they had time to think about this but they really haven't thought it out because they just don't want to let go of the political aspect of this to the interest political integration of it all and me and that's where the mismatch continues because looking at statistics you know we're going to have the southern part of the eurozone is going to be in the mix for years with economic growth how can you match that with economies further up north that are much more dynamic and i'm especially germany i mean they do how much are they committed to this political integration in the in of all countries in the in europe germany is most committed with all but from all the german girl is less and let me go here and let me go in there you were completely for it this is like talking to let me let me carry on this one from each of these folks please this is great crosstalk episode but let's go to garrick ok. the european project is something that germans completely believe in. the european periphery is going to make a lot of money i don't know that europeans are going to take him. ok robert the voters

i heard you only got a single believe it supports the euro because the economy's benefiting greatly regret it helps their exports to other nations within the eurozone and doesn't allow other nations of the eurozone nations to compete so really that's why the german we believe that we does it every year if we don't you know probably later this and i was going to the victims or you know i could not hold on the show ok i mean this is probably had been as bad as this is until finally got only in the form of the you are very smart there is research research royle when i say she was conducting you think verso go ahead please it's important that germany has been leading the charge i gather with other parts of northern europe like sweden which is not in the euro so it's nothing to do with us it's the states of america all the rest of the types of goods they could use but they're selling well into emerging markets and china has done very well with the our our union labor costs are very

kind of massive not only no growth that we're going to really experience right it's us i don't think you understand you embrace have really do you really want to make sports all right all right ok garrett if i could go back to may not to but just greece is not does we're going to farm i know the export economy they simply will not be changing the currency will not change those parameters there's deep structural issues which need to be toppled if they choose to think that that's better to talk outside the euro so that's their choice i have no question that would help and i'm sorry would hate to be pride. in solving markets and will make the right in their concrete right while we spend you know larry until you see this to hear it carried out like you know you and i do very caring for these things like you're going to guarantee washington guarantee what are these monies my terminology here and i haven't seen this elsewhere ok but it seems to me that the way the eurozone is evolving it's going to continue to evolve that is it is turning into an

apartheid system we're going to have poorer. euro countries and you're going to have relatively rich ones can a currency union be sustained when you have an economic and financial apartheid system you made no difference to the united states that's a good different subject was he going to carry out this like a transfer system in the united states yes go ahead because you. indeed that's a perfect example the united states has poor regions and rich regions i'm sure germany has poor regions and rich regions and they all managed to stay within the same political system and it meant they managed to keep their currency union together but that required a political commitment it's not an economic question there are plenty of times i'm sure east germany wanted lower interest rates or the southern us would have liked lower interest rates but we always stuck with it together because an economic monetary union is a political question first and foremost that's why we should be talking like to call it to say are we going to have a similar system to transfer wealth from poor regions to from richer region in deviations to offset some of the discrepancies now that's exactly what reasons

because i really want to see how you agree in government we want to go national governments in and democrats ok so that's a bit of an ass of an essay if i can ask you a question but let me ask you a question and it's something like what the united states or i mean the people the populations of the eurozone like the euro when things are good when you don't have to think about these type of things up until the crisis in. greece but now things are breaking down some of the contradictions of the euro becoming very obvious then the euro becomes very very unpopular i mean it's just when things are good you don't really care how it works but when things get tough you do it in this is really a good reason to question the entire structure of the eurozone isn't it. oh i totally agree with this it's a big problem i'm going to be the critic of many of these problems for years i live course not always popular in brussels if you say those things. cause he was a marvelous success well girl not long afterwards with facing these problems you can't brush them under the carpet you have to tackle these fundamental differences

how do you create trickle down growth from germany to the periphery for example how do you help these periphery a common i think that's going to destroy i think i totally i totally disagree that the idea is that simplistically somehow devaluation will work there's a lot of other structural if you look for the you know if you're going to be ninety nine percent sure you have to let you go enjoy them i totally believe it was the same for you the sixteen to sixteen with no i don't know yet who until recently seventy thousand results of having it i'm sorry said it was right sorry but you can't because it will receive a recorder and you know we learned you know what the result is that you are you know what it is you know if you kingdom and therefore we didn't join forty other countries didn't learn from our example and now they say i want to know the risk i want to bring up another empowering issue here which i want to bring up another important issue garrett and i could go to you what in moving forward. it is do we have to when we look at what's going on in greece i can never get away from moral

hazard in the contagion because whatever happens with greece and i think they would say it was you could have portugal and ireland and maybe belgium and they say well what's there to worry about ok we'll just go through the same thing because the euro will is not going to be allowed to fail in chile completely collapses it on its own because nobody will have any money left including the germans ok that's an exaggerated scenario but what do you think about that's why that's why that's why the markets are paying so much attention to greece there are no timeouts in financial markets every time something happens in greece people say whatever is happening here fifty percent chance that happens in ireland percent chance of happens of cortical. so therefore that's why there is no. use contagion even if there's no financial institution these countries between their banks there's news contagion ok vanessa what do you think about a contagion to element in moral hazard and i'm stressed moral hazard. well i think there's signs that other euro zone countries. taking that since they are playing

ball in whatever way they're not playing the same kind of game is greece unfortunately with greece i think there's an internal lots of internal problem about the way in which the public doesn't understand the issues how it's not how to properly explained in which decisions are being made and this is just going to be a continuous festering sore even if the government now signs up to these fiscal measures will be back again in a few months time to demonstrations on the streets and uncertainty about whether a new greek of the great relationship you know what you're going to be robert robert let me ask you a question let me ask you a question because i think you bring up an interesting point here is that you know if we go through if there is contagion out there there's more housing out there it's really the people that pay it's not governments it's all i'm sorry it's not central banks it's not private banks they're going to pull through this pretty well at the end of the day but it's the populations of those countries want. well the european central bank has bought up a lot of greek by other banks so they will pay but yes it will be than the ordinary

population that will pay they paid when the euro was introduced the lead to higher prices in their shops that was deeply unpopular in greece and it's now helping to create a very deep a bust within the greek economy so that it is no ordinary people of greece that are paying for something which they never actually asked for where the political elites of you've got together decided that it would be a nice idea to have a common say but of course didn't listen to economic reality and it will be their populations that will pay the price unless of course they recognize that they have made a mistake by creating the euro and they've been to have their own currencies and manage with all of the euro that would be the appropriate way for all rightly enjoy . the time of our run out of time here and nothing is going to resolve our eyes on july third many thanks to my guest today in london and in washington and thanks to our viewers for watching us here r.t. see you next time and remember crossed up rules. to

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