thank you so much that was brian becker national coordinator of the answer coalition and that's a different out from one of the stories we covered at r.t. dot com slash usa and youtube dot com slash r.t. america to weigh in on that she twenty three we did i will see you right back here for more news in a little bit and you have follow me on twitter war and. 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. somebody that are soo come here make fun of me. picking up garbage boy i'm not bad like people saying. i'm

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. live nation free liquid intake should be free comes for free. range month free risk free. free. download free broadcast live video for your media project free medio don carty dot com. you can. follow it welcome to cross talk 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 has doubts mounted whether the euro project has a future. kick. start. the process of the prospects for the euro i'm joined by vanessa rossi in london she's an associate fellow in international economics at chapman house high 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 a market as center at george mason university all right this is crosstalk and that means cross talk 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 euro zone 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 terry experiment. overburdened with crushing debts greece is fighting for its financial and political life as lawmakers defend the unpopular us terry 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 judy 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 this year two thousand and fourteen the package will however entail still yet another round of sweeping austerity the first condition to have success if

we speak about shipping to greece is it that you paul. and that he's able to deliver on that spot and if this it's fourth i think olson has to do its part because it is in our joint because no our common interests are 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 and plan to the vienna initiative of two thousand and nine which tackled nouns in 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. though the vienna should have may have had its advantages 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 will sink the entire eurozone originally conceived as a geopolitical theory the very concept of the european union would also face a serious threat a threat that few of the e.u. founders could have anticipated the churning for cross-talk our team. ok vanessa if i go to you first in london or on the july third meeting. be bailout for greece is really a done deal because they have to bail out greece don't they or the eurozone itself faces. i 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 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 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 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 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 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 of foreign secretary jack straw said a few days ago that the euro can't survive and it should just be given instead of a slogan i think should action should be taken just arguing with going beyond the euro in this way and that nothing has really been settled with greece is 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 project and we should be wound up and then only then will the economies in the mediterranean and in ireland starts 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 but i said robert make good points but this is right having two years to get ready for this means that there are 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 broader 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 economists 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 still defaults it's still bankruptcy what's the difference between the two this is the problem we first need to tackle the immediate problem we have which is this survey it may not be a long term issue about how the euro zone management can change whether it can change and 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 youth is delivering and you need it where you can make your plan here you know when times the greek crisis. is not necessarily say you are we have a crisis you know usually we have the crisis in saying. no we have a can 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 do you this is the boy we already so massively when they join us it's happened the day that a critique on the depression if you don't use call right. here's gary garrett i'm

going to 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 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 i mean i have eighty miles to the other quite. all right internationally go ahead this is going around read your head of course first thing there but we come back because you asked me that question before and it's disorderly versus orderly we're now in a problem with greece rattled by 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 c. of all its banking system and not party depends on how the e.c.b. 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 already there is impossible situation of having to ask well what defines what is sort of the or not this sort of means they're immediately having to ask but for 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's rezone listeners you know 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 they can to try and paper over the cracks and try and hope the problem will go away i think that if you're in. the euro when the euro you're lying as i know you don't. want to hear injured garrick 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 if you want to go there and do it i'm honestly if this is the same online that's a 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 it yes or no calling time on this but my only point first is that is that it should really be a tide 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 that the nation will increase itself 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. policy is being dictated you are you not have power over greece yes it does the

united 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 with more measures along gracey they're not dictating what greece has to do what they're saying is they are because they know they have the money and you say to the terms are you. really short break we'll continue our discussion on greece and the euro stay with r.t. . if. you. want to. h r n here broadcasting live from washington d.c. coming up today on the big picture of. access.

welcome back and ask i'm here a little to remind 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 great greece enough for its but federal budgets and what not 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 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 shock is bigger tomorrow because they find out that all of their base and just all the. vanessa how do you see that's nothing that any greek voter wants of course of mr how do you see that because there is this there is this positive perception problem that this is exactly part of the problem but 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 big increases in gold sales a big about of withdrawals from to cause it's a lot of protests of protection money so to some extent that holds only i mean these 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 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 to our list but i do believe the euro is economic growth. i think and recapitalize their economy. they want to leave you with the dates things locally calm i'm 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 thank you regulate destroy his old. and we're never going the united. ninety three you need to learn to history. so you know if you keep trying to jump in here and jump in here chinese right now it is i've been here right now. for the economy grew

that is the only way it's agreed greece is not greece need to devalued their own common see the value they come and so you. combine it we're going to change here you know. only. here is right now. robert robert garrick. 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 the interest political intrigue ration of it all and they and that's where the mismatch continues because looking at statistics you know we're going to have the southern part of the euro zone 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 are they committed to this political

integration in the end of all countries in the in europe germany is most committed with all this from all the. lights and let me go in there let me go in there you were completely for it this is like talking to let me let me carry on this one hundred let 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. european periphery is going to make a lot of money but if. they can. ok robert the voters i think you're only going to lead supports the euro because the economy's benefits are greatly limited 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 are you know if we don't join the prosecution of this and i was going to take you back and not hold our show yeah. i had been asked so i

had this is a handsome man a grown man in the form of the you. research research roiled and i say the group was can digest the e.u. vanessa go ahead please it's important that germany has been leading the charge and together 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 state of their accommodation of the types of goods they could use but they are selling well into emerging markets into china is time for our all you need labor cost up there you cannot see only no growth of a mature really serious right so i don't think you understand the embrace really of your life. supports all right all right ok garrett if i could go back to you may not just greece's. might i not export economy they simply will not be changing the currency will not change those parameters there's deep structural issues which need to be tackled if they choose to think better to tackle

it outside the euro so that's their choice i have no question that would help her would help people to be prime not better. than markets. right in their countries while we spend as you know larry until you see the carrot life you know you and i just i guarantee you this is like you're going to guarantee and washington cared 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 poor. euro countries when 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 to get along very different so you're going to carry on 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 reparations 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 for 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 you have to say are we going to start a very similar system to transfer wealth from poorer regions to richer but you can indeed regions to offset some of the discrepancies now that's exactly what greece is because i read you and i just see how you agree and governments we want our own national governments and democrats ok so that's a good of an ass of n.s.a. if i can ask you a question let me ask you a question and it's something like with the 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 get paid a critique of many of these problems for years i look or feel not always popular in brussels if you say those things that tenth birthday party was a marvelous success well dull not long afterwards with facing these problems you can't brush them on the carpet you have to talk of these fundamental differences how do you create trickle down growth control money to the periphery for example how do you help these periphery of color i don't think we're going to do it was really i did i totally i totally disagree that the idea is that simplistically somehow devaluation will work there's a lot of other structurally locally you know if you're going to be ninety ninety two after we let you go usually i totally. agree the same for you sixteen to sixteen with no i don't know yet who recently started because it is

old having it i'm sorry he said it was a great story but you cannot particularly see the police everywhere and you know we learned 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 and now they say i want to know the risk i want to bring up another empowering issue the heritage i want to bring up another important issue cared about to 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 i think they will see what is going to have portugal and ireland and maybe belgium and they can say well what's there to worry about ok we'll just go through the same thing because the euro will and 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 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 timeouts in financial markets every

time something happens in greece people say whatever is happening here fifty percent chance that happens in ireland percent transfer happens in portugal and so therefore that's why there is no. contagion even if there is no financial institution these countries between their banks there's news contagion ok vanessa what do you think about that contagion element in moral hazard and i'm stressed moral hazard. well i think there's signs that other eurozone countries either taking medicines 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 it which decisions are being made and this is just going to be a continuous pestering saw even if the government is up to these fiscal measures will be back again in a few months time with demonstrations on the streets and uncertainty about whether a new critique 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 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 populations of those countries want. well the european central bank has bought up a lot of greek debt 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 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 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 begin to have their own currencies and manage a withdrawal from the euro that would be the appropriate way for all rightly engine . of our run out of time here and nothing has been resolved all 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 rules. take. wealthy british style.

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