which bryson if you move soon from the stupor. starts on t.v. dot com. now past the hour here in the russian capital with r.t. a reminder now of our top stories and japanese authorities are launching a massive radiation check ups in the fukushima area three months after the nuclear disaster it's a major public anger over the government's late response to the leaks and a lack of transparency. a russian intelligence chief has been found guilty of treason and sentenced to twenty five years in jail for exposing a group of russian sleeper agents in the u.s.

last year the verdict by a moscow airport was delivered in absentia that's going on alexander of the year fled it just before the news of the scandal emerged. and israel warns of foreign and journalists against joining a garza balun flotilla due to depart from greece it's threatens to ban them from entering the country for ten years if they go aboard the ship and it's very uncommon for. those are the headlines on this monday here and next it's our debate program across talk and host people of ireland as guests will be discussing the greece's debt crisis in arguing whether the eurozone is already sinking this is art . if you can. stand. alone and welcome to cross talk i'm peter lavelle the euro in its 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 has doubts mounted whether the euro project has a future. king. cross-talk the prospects for the euro i'm joined by vanessa rossi in london she's an associate fellow in international economics at chapman house also in london we have robert oulds he is director of the bruges group and in washington we go to jerry jones he's an economics professor with america at its center at george mason university all 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 that south come 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 the unpopular are stored in measures meanwhile the european union the european central bank and the i.m.f. say these measures are be only way to revive a second the commie your country is undergoing a crucial moment we are obligated to ensure the future the future of our country with a sense of national unity 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 greece's year old one hundred ten billion euro deal and funded into the year two thousand and fourteen but that it will however until still yet another

round of sweeping austerity to fish condition to have success before we speak about should poor greece is it greece loans that support and their greece is able to deliver on its part and if greece this its part i simply opinion has to do its part because it is in our joint is now our common interest or 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 will divert a meltdown and propose a strategy akin to the vienna and initiative of two thousand and nine which type of melting eastern european debts so. if we have to move forward on this and i think it's make sense to the private secretary this is important to us though the vienna

mission of may have have 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 the european union will also face a serious threat i for the fuel that you founders could have anticipated. for cross-talk our team. ok vanessa if i go to you first in london or on 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 discrete 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 have had ample 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 the confidence in the us my view is borne out by the way in which the euro has reacted this year last year if recent move 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 quick at containing any

problems that arise in greece visibly the other debtor countries and that i think is something that the e.u. should be in hopefully house been working all 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 of foreign secretary jack straw said a few days ago the euro can survive and it should just be given instead of a slow death it should be action should be taken to start dealing with going beyond the euro in this in that nothing has really been settled with greece just throwing more money at it. absolutely you know greece is effectively passed an interest to laying 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. and we should be wound up and then only then will the 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 have two polar different points of points of view here where you stand. well i think they're both finesse and robert make good points but this is right having two years to get ready for this means that there is 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 questions always for europe has always been what will happen when one part of europe wants to cut rates another part wants to raise it. across the board knew this would be a problem ten years ago and now we're facing it right now even if so what is it if

it is really you know what is the difference between an orderly and just orderly i mean it's still default it's still bankruptcy what's the difference between the two but this is the problem we first need to tackle the immediate problem we have which is there may or may not be a long term issue about how the euro zone management can change whether it can change i will ultimately the question is 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 users delivering immediately we are like you know this was a greek crisis. he's not necessarily a euro we have a crisis scene where you actually we have the i.c.c. in saying of course you 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. but we know it was made worse by you probably this is the boy we already said massively when they joined the euro and that ended the

career he had on the depression if you don't use call right now i know that your friend here is comparing a carrot and when you go to you what is the euro zone learn from all of this here and you know i'm not going to pretend to be an expert in international economics always sees more money being poured into something i don't see real structural changes in the eurozone you know of course greece is this is only me why you need to my answer to the. other question our international going this is. of course first thing there but we come back because you asked me that question before and it's this sort of the versus orderly where 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 solvency of all this banking system and that partly depends on how the e.c.p.a. reacts the z.b. has already been beyond almost the pale in terms of accepting poor collateral in

exchange for liquidity ger and all the crisis now if greece goes default and that's made quite clear the e.c.b. it's all going to be an implausible situation of having to ask well what. were the sort of the or not this sort of means they're immediately having to ask but this money and this means that the greek banking 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 time is to allow greece to more carefully consider what exactly does it want to do because greece's really zone the solution over by trying to suggest 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 right raising think that if you if you please you know when the euro you. know you don't. want to hear injured garrett jump in

there go ahead ken. well the plea to me the big lesson of this is not just the economic crisis the political worsen 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 the nasa first affectively time has been called i mean this is what the latest statements from the e.u. were about saying greece we're going to give you a last chance do you want to take it yes or no they're calling time on this but my only point first is that is but 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 lack of explanation with the increase itself and it's greece that should have to face up to what really it wants to do is the solution because it's saying that it

would like to leave the euro is a measure of the e.u. of the e.u. policy is being dictated to rather you not have power over greece yes it does the union you have it however greece is taking the policies the greece must follow through to deal with. its they're the ones that are imposing the will still information on gracey they're not dictating what greece has to do what they're saying is they are because they don't have the money in any state english terms. you've got germany leaving germany short break we'll continue our discussion our greece and the euro stay with arkie. if you steve.

wealthy british scientists. like. markets. can find out what's really happening to the global economy for no holds barred look at the global financial headlines to cause a report on r g. twenty years ago this country. to. see. what had been. challenging. to take. can.

welcome back in rostock i'm here a little to remind you we're talking about the euro and its future. it's. ok karen i'd like to go to you in washington 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 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 are arms are 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 sir 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 will be very disappointed if the e.u. just shock a speaker tomorrow because they find out that all of the breaks have justified. do

you see that's nothing that any greek voter wants of course mr how do you see that because there is this there is this perception of the problem 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 they've been picking creases in gold sales about of withdrawals from deposits you know to protect to protect money so to some extent that holds i mean 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 would lose the 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 but i did leave the euro the economic growth. i think and recapitalize their economy. you

want to leave you with really sorry but i think you'll you're living in cloud cuckoo land if you think that greece devaluing will do any use for the greek economy greece you. are. going to you know you. know do you really you are you know i think you are you. really are in place you. keep trying to jump in here and jump in here jane is right mine is i've been here right now with. the economy grew that is the only way although it's a great place is not greece need to devalued they're going to come and see the value they come in so you. all right 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 karen the study robert robert please garrett. how much do you think of this is that i don't i don't

see this there really any solutions out there i mean i agree with that but yes of 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 be into political integration of it all and the 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 emacs for years with economic growth how can you match that with economies further up north that are much more dynamic and i especially germany i mean they do how much are they committed to this political integration in the end of all countries in the in europe germany is most committed with all the german girl is like so many go in there and let me go with mary we're completely for it this is like talking to let me let me bring you here in on this one to me please folks please this is great crosstalk episode but let's go to garrick ok. yeah the european project is something the germans completely believe in. the

european periphery is going to make a lot of money off your own too if you know that you're going to be here. ok robert the voters i voted heard that you only got a single lead supports the euro because their colonies benefits are greatly limited helps their exports to other nations within the euro zone and doesn't allow other nations of the eurozone nations to compete so really that's why the german we believe we does not have the area of the journal probably later of course and i this is only the victory jointly by iraqi not hold our show ok and this is wholly. fair this is not somebody got only it's on the floor of the you very very recent research royal when i was a sure group was can digest the e.u. vesa 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 the states of america all the rest of the types of goods they produce but they are selling well into emerging markets into china we are you

know like the cost of very cold not only no growth with a mature really extreme measure of success i don't think you understand they have really you're going to make sports all right all right ok garrett if i could go back to you know not just greece is not does we're going to fly home i now like export economy simply will not be changing the currency will not change those parameters those deep structural issues which need to be tackled if they choose to think that that's better to talk to outside the euro so that's their choice i have no question that would help her with the prime not better so painful than markets. today countries while we spend you producers to be very careful not to get you guys are getting into this like you're going to canada and washington care what all these monkeys. my terminology here and i haven't seen this elsewhere ok but it seems to me that the way the eurozone is evolving if it's going to continue to

evolve that is it is turning into an apartheid system we're going to have poor euro countries and you could have relatively rich ones can a currency union be sustained when you have an economic and financial apartheid system different than the united states that's ok it's a different subject you're going to carry out this like a transfer system in the united states yes go ahead because you're a. 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 when i'm sure east germany wanted lower interest rates or the southern us would have liked lower interest rates but we all 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 try to spur system to transfer wealth from poor

regions to from richer region into deviations to offset some of the discrepancies now and that's exactly what reasons because i'm. just saying how do you agree in government we want to go national governments and then our own democrats ok so i did have an s. of an essay if i could ask you a question let me ask you a question and it's something like with united states i mean the people the populations of the euro zone 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 can't be the critic of many of these problems for years i love course you're not always popular in brussels if you say those things. because he was a marvelous success well no not long afterwards we're facing these problems you can't

brush them on 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 economy i think that's going to do it wasn't really that 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 can be ninety nine but if you don't leverage the you rightly i totally agree i think you're going to say for the safe thing to say we're going to recent research and repairs result of having it i'm sorry she said it was right sorry but you could not call it will receive a reporter and you know we learned you know we did we learn you are you know what it is you know like you kingdom and therefore we didn't join forty other countries can learn from our example now they say i want to. bring up another empowering issue here which i want to bring up another important issue again i'd like to go to you what in moving forward. 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 i think they would realize you could have portugal and ireland and maybe belgium and they could say well what's there to worry about ok we'll just go through the same thing because the euro one is not going to be allowed to fail in chile completely collapses in on itself because nobody will have any money left including the germans ok that's an exaggerated scenario but what do you think about why that's why that's why the markets are paying so much attention to greece there are no time outs in financial markets every time something happens in greece people say well it was happening here fifty percent chance it happens in ireland percent chance it happens in portugal and so therefore that's why there's. news contagion even if there's no financial links between these countries between their banks there's news contagion ok vanessa what do you think about that contagion element and moral hazard and i'm stressed moral hazard. well i think there's signs that

other eurozone countries. taking medicines they are playing ball in whatever way they're not playing the same kind of game as greece unfortunately with greece i think there's an internal lots of internal problems about the way in which the public doesn't understand the issues has 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 the uncertainty about whether a new greek couple great relationship you know one could join the euro they were going to go to 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 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 populations of those countries want. well the european central bank has bought up a lot of greek banks so they will pay but yes it will be than the ordinary

population that will pay they paid when the euro was introduced to lead to higher prices in their shops that was deeply unpopular in greece and it's now helping to create a very deep 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 sea 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 begin to have their own currencies and manage a withdrawal of form the euro that would be the appropriate way for. the end journey. rather than a time of our run out of time here and nothing is going to resolve our lives 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 rostock rules. to

kick. start.

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