of anguish that we saw over the weekend i want to thank you so much that was brian becker national coordinator of the answer coalition and that is going to do it for now for more on the stories we cover go to our t. dot com slash usa and youtube dot com slash r t america follow me on twitter at lauren list star and have a fantastic night. ok

john berman here broadcasting live from washington d.c. coming up today on the big picture. that. wealthy british. market. why not what's really happening to the global economy with mike's cancer were no holds barred look at the global financial headlines tune into cars a report on our cheap. download the official t.

obligation q i phone on i pod touch from the q tops to. one child's life on the go. video on demand keys mindful of costs an r.s.s. feeds now in the palm of your. question. call. the a and. a lowly 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. will continue to rescue greece from crisis his doubts

mount whether the euro project has a future. you. can 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 gary jones he's an economics professor with americathis center at george mason university hi 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 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 hairy experiment. overburdened with crushing debts greece is

fighting for its financial and political life as lawmakers defend unpopular us dirty 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 common me all of your country is undergoing a crucial moment we're 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 of 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 unfunded into the year two thousand and fourteen the package will however until still yet another round of sweeping austerity the first condition of success if we speak about support to greece is it greece. and that greece is able to

deliver on its part and if greece this its fault i think being opinion has to do its part because it is in our joint because now we're think. this is financial woes overblown after all many policymakers 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 is sure that a compromise agreement would have hurt a meltdown and propose a strategy akin to the vienna initiative of two thousand and nine which type of mounting eastern european debts. we have to move forward on this and i think it makes sense to involve the private sector this is important to us though the vienna 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 sink the entire eurozone originally conceived as a geo political 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 czerny for cross-talk 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 pay or the eurozone itself faces a big 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 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 full time to review and

understands their portfolios and their 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 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 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 has 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 good we hear about the euro i mean the former from our foreign secretary jack straw said a few days ago that here the euro can survive and it 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 that nothing has really been settled with greece just throwing more money at it. absolutely you know greece is effectively passed an interest in 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 it should be wound up and then only then will their colonies 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 gary 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 as robert make good points that's his 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 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 a columnist 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 is really you know 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 was that this is the trouble we thought maybe to tackle the immediate problem we have

which is there may or may not be a long term mission but 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 use is delivering the immediate way to make it clear here you know what how does the greek crisis. he's not necessarily the euro we have a crisis where you actually we have. to go in our little you know we have like 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 the e.u. this is the boy we already said massively when they joined us on the day that occurred he called the depression if you don't use call right now i know that your friend your is comparing a carrot i'm going to go to you what is the euro zone to 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 in the meanwhile you dated miles to the other quest. all right international going this is killing me around read your head of course first thing that but we come back because you asked me that question before and is this sort of the first orderly we're now in a problem 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 ranking system another party depends on how the e.c.p.a. reacts e.c.p.a. 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 the e.c.b. is all going to resume possible situation of having to ask well what comes with this also we are not this sort of greens there 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 resumed their lives and nobody tries to suggest it to avoid being on the politicians prices 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 can only. hold one injured garrick jump in there go ahead ken. well the big to me the big lesson of this is not just the economic crisis the political lesson which is 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 it like money is going to be this is the same on the nasa first but simply 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 there's a lot 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 think that it would like to leave your is a measure of the e.u. all of the e.u. policy is being dictated to rather you not have power over greece yes it does you know you have the power over greece is it because the policies the greece must

follow through to deal with. its they're the ones that are imposing the will still require measures along gracey not dictating what greece has to do what they're saying is they are because they say they have the money in educating the terms are you. going to jump in here short break we'll continue our discussion and greece and the euro stay with r.t. . ok. if you want to. we'll. bring you the latest in science technology from around the world. we've got the future covered.

taking. welcome back to crossfire i'm futile to remind you we're talking about the euro and its future. ok garrett i'd like to go to you in washington are 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 it but federal budgets and whatnot it's to bail out banks in greece they 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 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 will be very disappointed if the e.u. just shut up and speak it tomorrow because they find out that all of their base are just appalled at. vanessa how do you see that that's nothing that any greek voter wants of course of this how do you see that because there's there is probably a perception problem this is exactly part of the problem that if there were to be a disorderly default almost immediately it's a great time so 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 coal sales a big about of withdrawals from deposits and also protects and protects money so to some extent holders 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 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 the euro the economic growth. and recapitalize their economy. they want to leave the you take 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 useful the greek economy going. strong here's all the herd and we're going the united kingdom go in there sterling no really really you are you know i think you are you a clue history. you know. we jump in here and jump in here strange right ninety's i've been here right now with a torch. for the economy grew now is the only way forward for greece

is not if you greece need to devalue their own common see the value that they value like hell and so you. were going to change here in a ranch here only we're going to change gears 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 i said 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 that the interest political integration 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 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 and of all

countries in the in europe germany is most committed with all this from all the terminator looks like the let me go in there let me go here you were completely for it this is like talking let me let me carry on this one with me please folks please this is great crosstalk episode but let's go to garrick ok. you know the european project is something a dream and completely believe in. the european periphery is going to make a lot of money are you going to put it that you're sort of going to take care. ok robert but the voters i get you only going to lead supports the euro because their economies 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 it every year as we do you approach your leisure of course and i was going to take you forward like i cannot hold on the show ok i know. you had been asked so this isn't surprising because

only it's in the form of the you. research research and i say sure it can dynamically vanessa 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 it's nothing to do with that it's the state of barrack all the rest of the types of goods they could use but they are selling well into emerging markets into china is to. our all you need labor cost up there you cannot see only no growth potential real experience right for us i don't think you understand there in race i have really been here i've been in a sports all right all right ok garrett if i could go back to may not do but just greece is not going to be. 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 state choose to think because that's a totally outside the euro so that's their choice i have no question that it would

help her with holding the prime not necessarily pain foreign markets. very concrete while we spend you tell us in the carriage you know you guys are going to this is like to go out again and again washington care what i'm going to use money . 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 and you're going to have relatively rich ones can a currency union be sustained when you have an economic and financial apartheid system for the united states. to do for it so if you're going to carry on this like a transfer system in the united states yes go ahead because you know 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 a holiday has a saying are we going to have a similar system to transfer wealth from poor regions to which are of age and indeed the regions so what some of the discrepancy is now and that's exactly what recent years are you saying that you have governments we want to go national governments and democrats ok so there's a lot of a message in there say if i can ask you a question 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 and 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 have been a critic of many of these problems for years i look or feel not always popular in brussels if you say those things first a policy was a marvelous success well girl go along afterwards with a saying these problems you can't brush on the caucus you have to talk all these fundamental differences how do you create cowgirls from germany to the periphery for example how do you help these periphery of colorado because we were doing this and really i did 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 get ninety ninety two after we leave it to you. i totally agree i do what you're going through the same people you say seem to say we're going to deal with the recent recession

because it is a bit of having it but i'm sorry he said really right sorry but you look at the particular receipt to fully recover and you really learn are you going to be learning as you are you know what it is you're 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 empowering issue here each i want to bring up another important issue cared about to go to you well in moving forward. it is 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 will be right he's 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 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 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's. news contagion even if there's no financial interest when these countries between their banks there's news contagion ok vanessa what do you think about a contagion development and 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 lots of internal problems about the way in which the public doesn't understand the issues has not had it properly explained in which decisions are being made and this is just going to be a continuous festering sore even if the government subsidies to scald measures will be back again in a few months time so demonstrations on the streets and uncertainty about whether a new greek culture great relationship you know one featuring the robert robert let

me ask you 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 why 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 the populations of those countries won't. well the european central bank has bought up a lot of greek debt so far the 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 he'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 or the political elites of you have 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 begin to have their own common seize and manage with all of the euro that would be the appropriate way for are rightly and journey. of all run out of time here and nothing has been resolved 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.

i tell marvin here broadcasting live from washington d.c. coming up today on the big picture. wealthy british style.

market. find out what's really happening to the global economy with mike's cancer for a no holds barred look at the global financial headlines tune into cars a report on our keep. me is he looking. to. see. a mission. the critics say should free.