three. three. three. three. three blogs call it video for your media project a free media to r.t. tom. joyner's a very warm welcome this is r.t. live in moscow top stories the judges in the hague issue arrest warrants for libyan leader khaled daffy and to be close his confidence charged with ordering the killing of anti regime protesters in france. and. israel says its navy is gearing up to intercept a humanitarian aid flotilla heading for gaza but backs away from previous threats to ban and the four journalists siding with the amman. and it's been confirmed

fifteen people showed signs of radiation exposure for shimon nuclear plant last month from the nation's government checks are being met with anger and skepticism about what more news for a less than thirty minutes when i mean time out of a program cross talk is next with host peter lavelle and these guys discussing the great debt crisis and arguing whether the eurozone is actually sinking this is stay with us for that. you can. stay. low and welcome the crosstalk i'm peter lavelle the euro 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. if you. can cross out 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 gary 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 the small metairie experiment. overburdened with crushing debts

greece is fighting for its financial and political life as lawmakers defend the unpopular us tara to 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 commie your country is undergoing a crucial moment we're obligated to ensure the future the future of our country with a sense of national jewelry facing the present difficult and multifaceted 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 the package will however entails the yet another round of sweeping austerity the first condition of success if we speak about support groups is it. and that greece is able to

deliver on its spot. greece this its fourth i think you can you know. as i can do sport because it is in our joint because now we're common interests i think this is financial woes overblown after all many policy makers claim greece is too small to cost 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 assure that a compromise agreement will divert a meltdown and propose a strategy to the vienna and michigan of two thousand and nine which toppled mounting eastern european debts so we have to move forward on this and i think it makes sense to improve the private sector this is important to us though there be an initiative 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 soon be entire eurozone originally conceived as a geopolitical theory the very concept of the european union would also face a serious threat a threat but few of that you have founders could have anticipated. 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 or the eurozone itself faces a new idea a 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 have had ample time

to review and understand sir court failures 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 effectively 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 this year last year if the 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 difficulty is all that we will have to be very quick at containing any problems that arise in greece. the other debtor countries and that i think is something that the e.u. should be in hopefully house in 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 good we hear about the euro i mean former from foreign secretary jack straw showed a few days ago that the euro can survive and that should just be given instead of a slow death that should action should be taken to start dealing with or going beyond the euro in this in but nothing has really been settled with greece is just throwing more money at it. absolutely you know greece's 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 ireland 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 debt 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 good as robert make good points but this is 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 of that and why are they so obsessed with having what they call an orderly default as opposed to a disorderly one. with robert where the 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 if it is what is it if it is really you know if it is what is the difference between an orderly and disorderly i mean it's still defaults it's still bankruptcy what's the difference between the two well this is the problem we thought we'd need to tackle the

immediate problem we have which is there may or may not be a long term a shit about how the euro zone management can change whether it can change and alternately the question is whether it's to live as 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 use is delivering you need it where you can make the poor here you know this was a great crisis. he's not necessarily to you or we have a crisis in we actually we have. to go in our little you know we have we have a crisis in greece which probably would have been a 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. simply when they join you and the data pretty high on the depression if you don't use call right. years comparing a carrot and what are you what is. learned 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. going let me why you didn't miles to the other quest. all right going to this is killing me around here of course first thing that let me come back because you asked me that question before i list this orderly versus orderly we're now in a program with greece never mind the other debates 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 party depends on how the e.c.p.a. reacts b.c.p. has already been beyond almost the pale in terms of accepting poor collateral in exchange for liquidity cheering all the crisis now if greece does default and that's made quite clear p.c.b. is always there is impossible situation of having to ask well what. but it's also

we are not this sort of means there 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 buy time is to allow greece to more carefully consider what exactly does it want to do because greece is a really strong there's nobody tries to suggest it to avoid being on the politicians tracey's 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 i think that if you if you please you know when the you know you're lying i was angry you know you don't. you hear what you want to be injured garrett jump in there go ahead ken. well the big to me the big lesson of this is not just the economic class and 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 do you like money is going to finance its own and perceptively time has been called i mean this is what the latest statements from the e.u. are about they're 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 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 is a lack of explanation where the increase itself and its greece should have to face up to what really it wants to do is the solution does it saying that it would like to leave your is a measure of the e.u. all of the e.u. process is being dictated to rather you not have power over a greece yes it does you mean you have the power over greece is it your take

policies the greece must follow to deal with. its they're the ones that are imposing the will still be one measures along great and not dictating what greece has to do what they're saying is they are because they know they have the money and you stating the terms are you. going to jump in here short break we'll continue our discussion and greece and the euro stay with arkie. if you still. want to. 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. regular 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 that with time people like me. that one. thing that i feel people will start to appreciate us.

you're going to. say this is true he still keeps in sequence but now it's time to reveal that the soviet files on. the kitchen. welcome back across talk i'm getting a little too mind you we're talking about the euro and its future. ok.

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 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 would be very disappointed if the e.u. just shot up a speaker tomorrow because they find out that all of their breaks have just a potent vanessa how do you see that that's nothing that any greek voter wants of course of business how do you see that because there is this public perception

problem this is exactly part of the problem that if there were to be a disorderly default almost immediately the greek banks would probably shutdown well actually a lot of people in greece have already worked that out and this is one reason why they're been picking creases in gold sales big amount of withdrawals from to cause it's you know to protect to protect money so to some extent that holds only 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 were to lose their money here and that's not a good situation in the 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 do believe so euro the economic growth will be even sure whether they can recapitalize their economy. or to leave the real deal with the dates things locally but i think you know you're

living in cloud cuckoo land if you think greece devaluing will do any use to the greek economy thank you. and when they are in the united kingdom don't. know really really you know all the united you know you need to learn the history. you keep trying to jump in here with the jump in here chinese right ninety's i'm going to jump in here right now. in the economy grew now is the only way always agreed greece is not. the value there are uncommon see the value that they value that come in so you. can hear you know richard. gere is right now. robert robert 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 as of 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 intrude 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 inimical for years with economic growth how can you match that with the economies further up north that are much more dynamic and i'm especially germany i mean how much of a committed to this political integration in of all countries in the in europe germany is most committed with all that from germany was let me go with eric let me go with me here you were completely committed to this is like talking to let me let me clear it on this one for me please folks please this is great crosstalk episode but let's go to garrett ok. the european project is something that germans completely believe in. european periphery is going to make a lot of money i don't know that you're going to take care. ok robert but the

voters i voted you know that you're only going to lead support for the euro because the economy's benefits are greatly wrong with 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 we does not have the area for the journal prosecution of us and i was really the victims or you know like an old hold on the show ok i mean this is probably you had been as bad as this is until finally got only one form of the you very smart research research royle when i say your group was consigned to the e.u. vasser go ahead please it's important that germany has been leading the charge together with other parts of northern europe like sweden which is not in the euro so nothing to do with graphics the states of america all the rest of the types of goods they produce but they are selling well into emerging markets into china. how do you like the cost to their kind of not only no growth really experience right

for us i don't think you understand going grace they have really do you really want to make sports all right all right ok guarantee if i could go back to may not to but just greece is not does. not make export economy it simply will not be changing the currency will not change those parameters there's deep structural issues which need to be tacos 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 them sorry i would hate to be prime not necessarily in solving markets and will make. a very concrete while we spend you know larry until you see us to be very careful not to get you and i just want to guarantee this is like to go out again and again washington cared what it only used 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 poorer. countries are you going to have relatively rich ones can a currency union be sustained when you have an economic and financial apartheid system different than the united states ok it was very different subject was going to carry on this like a transfer system in the united states where it is going ahead because you. do 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 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 how are we going to have a similar system to transfer wealth from poorer regions to from richer region in game regions to offset some of the discrepancies now that's exactly what really

goes on the receiving end and i just think you are in government we want our own national governments and democrats ok so that's a bit of an ass of n.s.a. if i can ask you a question i said let me ask you a question and it's something like with the united states here 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 don't need a critique of many of these problems for years i live caution not always popular in brussels if you say those things but state policy was a marvelous success well no 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 economy when i do it wasn't really that i could 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 at the united kingdom the ninety nine but you should have you been it seems unlikely i totally agree i don't really recall you saying the safe thing to say even though i don't know yet who until recently certainly has a result of having it and i'm sorry he said it isn't right sorry but you can't look particularly silly to call a reporter and you really learn your history lesson as you are you know what it is you know like you kingdom and therefore we didn't join forty other countries didn't learn from our example now they say i want to. bring up another important issue here age 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 realize you could have portugal and ireland and maybe belgium and then you 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 because nobody will have any money left including the germans ok that's an exaggerated scenario but when you think about that's 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 whatever is happening here fifty percent chance it happens in ireland percent chance it happens in portugal and 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 that contagion to mention moral hazard and i'm stressed moral hazard. well i think there's signs that other eurozone countries either taking medicines 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 knots 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 get instructions on the streets and the uncertainty about whether a new greek of the great relationship you know one featuring the ok we're 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 by other banks so they will pay but yes it will be then 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 vast within the greek economy so that it is not ordinary people of greece that are paying for something which they never actually asked for or 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've been to have their own currencies and manage with all of the euro that would be the appropriate way for rightly enjoy. the 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 cross talk rules. to

kick. start. i'm.