please. and you can see. the low welcome to cross non-crime you know about is it time to write the obituary for the euro as a single currency reels from one crisis to the next europe's politicians appear to be powerless in the face of a monetary union that is proven to be dysfunctional what started out as a monetary crisis is now turned into a fiscal and political meltdown. and you can. see. across the uk the fate of the euro i'm joined by rodney shakespeare in london

he's one of the founders of the global justice movement also in london we have daniel ben ami he is a journalist and author and in princeton we cross to andrew moravcsik he's professor of politics and director of the european union program at princeton university's woodrow wilson school all right gentlemen with this is cross-eyed that means i want you to jump in any time you feel like you want to say something but first let's take a look at the changing the landscape of the european union crisis. it is a global reserve currency they only a potentially viable alternative to the head gemini of the us dollar and the single currency of the world's largest developed market of consumers but ever since this establishment as part of the master treaty critics have pointed to the lack of a single political entity it to oversee the monetary union something better in two thousand and eleven is increasingly becoming the mortal flaw for the euro and potentially the eurozone it represents the eurozone now rests on the shaky basis of

a confederation of states that are committed both to a monetary union and to retaining their fiscal sovereignty at a time of crisis that cannot work the hero's existential problem is that it's monetary side the only side that it has imposed as a single currency and the single interest rate on economies ranging from the basket case increase to the german bastion of fiscal probity this means that italian or spanish exports don't get any cheaper and that interest rates go up the second germany sees inflation anywhere on the horizon chil kingoff lending one of the possible solutions is a fiscal union or transfers it is quite obvious that the limit or for development he's prepared to do. for the euro is coming to an end and my guess is that at the end of the day it's hard to say when that will happen it will be germany that. turns out the light on the euro. germany is currently at

the center stage it faces the choice of either agreeing to some form of fiscal transfer or backing a euro bond issue which involves a major jump and its debt servicing requirement the weekend has underlined the chancellor merkel's coalition could crumble if she goes any further than what she has done in terms of supporting cash strapped euro debtors and that leaves the hero and possibly the euro zone as the biggest threat to the global financial system. in a for across our team. ok randy and i to go to you first in london are you writing the obituary for the euro right now because it is the the news flow coming out about the this currency is just unbelievable and as we speak right now germany may be deciding maybe not today but the ultimate future of this currency. yes i do write the obituary and as regards germany the national debt of germany related to its gross domestic product is eighty three percent and that is

higher than the similar percentage for the u.k. where i am france and spain and everybody knows that the next ones that go into crisis are spain france portugal and the u.k. but the german situation is actually worse and it's only maintained by the belief that it's rather more stable we're looking at something in which all the countries of europe are in debt which is an repayable if you take greece it's. its government debt as a percentage of g.d.p. was one hundred fifteen percent but as a result of the austerity measures it's gone up to between one hundred sixty and one hundred seventy percent and it's rising and on top of this none of the academics none of the politicians and the things like i understand things like the shift from labor production to capital production they don't understand that always putting money out at interest and not worrying there i mean i really you

know i thank you see there you prayed and we got your pretty bleak about it and you are now do you in princeton why you think why are you writing the obituary for the for the euro. i think it's too soon to write the a bit you wary for the year we have to look at what's happened over the last couple of years this is an arrangement that was set up two decades ago by the europeans and to which they are fiercely committed they've committed almost a trillion dollars to defending the euro and they do it not because they are sentimental or not because they believe in some dream of a united europe but because it's in the interest of almost every country there germany likes this arrangement because it protects german banks because it protects german exports because germany is economically involved throughout europe and because the collapse of the euro would be a disaster for german business for german banks and ultimately for the same german taxpayers who we're talking about right now greeks would be hurt if the euro

collapsed because they have to pay that debt back one way or another and if they if the currency collapses it will be even more difficult to pay back ok danny paeans let me go to italy interdependent one way or the other ok daniel i mean the and i mean if you just finish their highly interdependent one of the idea ok but if it's in their interest if i go to daniel but it's proving to be dysfunctional i mean how do you marry these two different things together because i mean the german. angle merkel suffered a election defeat of a local election defeat in her country because people are saying we don't want to pay for the laziness of the greeks in the in the misfortunes of the portuguese and the spanish and the irish i mean i mean it's pure common sense ok. well i would like to add the battery to the euro but i don't think unfortunately we're a position to do that yet because i think you know in your introduction the person

is quite right to say that you have an inherent contradiction within the euro zone where you have very productive countries like germany and relatively unproductive countries like portugal and greece and when you look them together we can honestly you create all sorts of economic problems and you create a system where both the southern europeans who are suffering austerity but also the northern europeans like germany benefit for example if you look at average wages in germany they're more or less where they were twenty years ago so i quite understand why only germans are unhappy about the euro zone and about their economic circumstances i think the problem is the european elite is absolutely determined to try and push through european integration even though people are not benefiting from it and even though there's no democratic demand for it you know iranians i think this whole crisis is very interesting expression particularly for the people that really want greater union and try stronger union a political union and that would also include

a fiscal union this is the only way the euro will be saved if they go to a united fiscal policy which would essentially destroy the sovereignty of every single member of the european union that's the only way to screen so you can be saved. yes but it would not save it because in fact that the levels of debt are much too high you see behind the problem of the euro there's the bigger problem of what is called the free market system which endlessly creates debt does not put it into the real economy and the spreading about that is collapsing on an even larger scale that in fact europe and there is a certain arrogance behind those who promote it that the great universities in america like harvard and princeton where they claim that anything the free market does is for the benefit of everybody it's just not true i mean the united states for example has export it all its jobs on the grounds that this is suitable for everybody it's not the whole system is fundamentally clapp saying part of that is

the problems and the collapse of the euro ok andrew i desire salvo shot over your your bow there do you want to reply. no it missed because we're not debating the we're not debating the airy abstractions of free market economics in fact this isn't a free market economic arrangement it's a particular monetary system and the fact is countries are now bought into this system so it would be extremely expensive to get out of it take the germans right the point the problem merican faces is she is going to have to pay for the debts which german banks the money that german banks have lent to countries like greece one way or another so if the europe euro tanks germany still has a problem of their own banks that have lent that money to greece right so germany is trying to manage

a crisis in which it is interdependent with greece these other bing is talking as if if we pulled out of the euro then germany could just traipse off would have to worry about anything but in fact america if you didn't have to pay greece would have to be bailing out of our own banks and we know from the united states that isn't any more popular than bailing out greeks ok dan daniel it's very interesting because you know the way to the perception of is in the media we're looking at sovereign countries with their sovereign debt i think andrew brings up a really good point it's really about saving all these banks and a lot of very very wealthy people connected to political power in these countries. well i think what i did saying is one sided with respect because there would be costs involved with unwinding the euro or withdrawing from the euro zone but i think they're also very high costs involved with maintaining the euro because you are maintaining a system which cannot really be stable you cannot look greece and germany or

portugal and germany together in the same economic system when one is very very productive and the other is to be unproductive you create all sorts of problems if i the really remarkable thing about the euro is now that it's having a crisis now but it's lost it for so long i think it's only lasted for ten twenty years however long you want to measure it. because if we've had a relatively stable world economy over that period but now we're entering a period of more instability i think it could be very hard to maintain euro zone intact despite what the politicians ones ok rodney what do you think about that i mean let's go to the worst case scenario is that we have they have to start kicking countries out like greece i mean you keep one country out in the whole house of cards falls apart right that's what we keep hearing in the media. well you may get a greek default but you may get it the other way round which is that germany and finland. say possibly the benelux countries i'm not sure about that perhaps holland

may pull out the other way round because you see the whole thing is going into crisis and it's a fundamental crisis which has actually been building for at least sixty years and that is not understood nor is understood is the great shift in the way wealth is actually produced the result of these big factors there is now in the euro and in europe and the politicians and in you that you us say this complete lack of understanding of how serious the situation is and there is not a free market. and after a short break we'll continue our discussion on the year old state with r.t. .

the worldwide manhunt for him lasted for fifteen years. one million euro award was promised for his capture. political mass murder for the west. for minions are. generally the serbian army. here are. on our to. download the official placation joe i phone or i pod touch from the i.q. saps to. life on the go. video on demand tease my old costs and says feeds now in the palm of your.

question on the t.v. dot com. and you can. well imagine crosstime people about to remind you we're talking about the eurozone crisis. can. handle i'd like to go to you in the context of this crisis here how much has the euro made these economies more alike because they as we go through this crisis were it's pointed out just how different these economies are if we look at the pig countries for example i mean it's still the disparities between them that was trying to the euro was supposed to. measure out and level out it hasn't done that and i think that's one of the thing that's this whole crisis has revealed. well this is where david has

a very good point that the presupposition of the euro system from the start was it was supposed to lead the convergence between the various european economies it hasn't done that and that means there's constant tension within the system and it's true whereas on the one hand european countries will go as far as they can to try to keep this system together because it is very much in their interest to do so and they will pay tremendous short term costs if this system breaks up but on the other hand it's true that there are structural costs that they are paying all the time because this system basically isn't suited to the real economies they have so the question is whether this crisis can trigger domestic reform in countries like greece or spain or portugal and also perhaps in germany that will alleviate the situation and that's a question to which we don't yet know the answer daniel if i can go to you it's seems to me that as we go down this crisis moral hazard is there the slippery slope

is there is that ultimately to save somebody banks or german banks and french banks the state is going. to central bank steps in and just saves the bank there but there's always going to be this temptation to finance ears part to you know bait these countries because a lot of money could be made off of their debt very expensive debt i mean it's just seems to me that no one is allowed to fail that's why this system will ultimately fail because no one is allowed to fall fall apart within it. i think there is certainly vested interest involved and certainly the banks will put pressure on the respective politicians to bail them out when necessary but i think one reason why this discussion i'm talking in general terms not about today in particular is confusing is i would say there's not really one crisis there are three crises there's the financial crisis which is very obvious the kind of turmoil in the financial markets problems with the banks and so on there's an economic

crisis which i think rodney was alluding to to some extent and there is a political crisis and i think ultimately the solution to the problem. is with the politicians but it's something they can't just sort out themselves it has to be a democratic process it has to be something which the ordinary people of the eurozone are involved in at the moment it's just a completely elite enterprise that is trying to impose solutions without really working out what people want from the whole process you know iranians very interesting life i could go ahead going to jump in if i could just if i could just add to what daniel said the real problem is that the it is thought that the interests of that financially elite automatically then results in furthering the interests of main street and that is simply not true the financially controls a vast part of the economy and rips off the fees for its own purposes and in its actions does not actually forward the really cannot be in the spreading of the real

economy so that has to be a challenge on that elite that has to be a challenge on the bankers and in practical terms they have to be made to go bankrupt as the only way of forcing a substantial reform reform into a fine go to uganda when you brought up an interesting easy go ahead i was going to ask you go right ahead. but that but that's crazy that's a nine hundred thirty scenario look nobody in any society likes a situation in which bankers are padding their coffers but at the same time there is the issue of systemic stability that banks go belly up and it can bring down the whole economy that's what we learned from the one nine hundred thirty s. and that's what sensible people are worried about so policymakers are facing a very difficult situation here but the question is what's the solution to this problem and i don't think that any european policymakers think that the solution is something like fiscal union shuffling large amounts of of your o's from germany

southward i think it's much more a question of whether or not there is the reform capacity particularly domestic reform capacity in countries like greece or italy or spain and last say and you didn't receive any changes because it is a line these economies this is another but that's just this really the biggest problem here is that you know we have a monetary union without a fiscal side i mean can a monetary union of this magnitude actually work without more coordination of fiscal policy you know that's not the problem the problem is not a monetary union without the fiscal side daniel's quite correct the problem is a monetary union without convergence of under law and social and institutional structures of the economies which is a different thing and you're not going to override those differences between countries by shuffling money from one country to another instead you're going to have to question is what other countries are willing to make domestic constitutional commitments to make this thing work the germans are not going to pay unlimited amounts of money to keep greece afloat ok broadmead jumping go ahead.

pizza pizza is mind set is that there is only a little of the full needed and everything will be hunky dory he doesn't for example understand that he's own country unemployment's not nine percent it's least twenty to twenty two and it's forty percent upon a month's blacks and hispanics he's not saying that very fundamental to. and as a result the euro is going into crisis as is the usa is going into crisis and old he talks about is a late street form and nothing is happening in the usa usa and the nothing is really going to happen in europe he doesn't see the fundamental problems in the situation here and in the usa he's just in fact saying oh everything will get back into balance with a bit of reform but he's wrong you know daniel fine go to you one of this one of the things that is made all right and you're jumping is crosstalk go right ahead no excuse me i didn't say anything of the sort everything i said had a question mark after we're after it i'm actually agreeing with daniel that there

is a severe tension within this system attention that might be impossible to overcome but if but european countries will try very very hard to overcome it because they have a tremendous interest in doing so and if they are to overcome it the way they will overcome it is not by a fiscal union they may engage in things like euro bonds and so on but this is sort of an i.m.f. plus kind of arrangement the major heavy lifting that has to be done to keep this system in place involves domestic reform and that's the point i'm making and it may or may not succeed myself i mean creasing lee pessimistic daniel on what is the element of democracy here because we had these elections in germany maybe this is the beginning of some wave a lot of people on the ground are saying this is the euro in principle maybe in theory we have an interest in but for a lot of people on the ground they'll say what am i getting out of it i'm paying taxes here to bail out some guy grow growing all of us in greece why should i be

doing that and i think that's a bit you know if it's real or imagined a lot of people feel that way that there's this incredible disconnect between the principle of the euro what's it supposed to do and how it helps the average person . yeah but i think it's not just ordinary germans resenting people in greece or portugal i think there's much deeper than i think what you have is a huge gap between the euro elites if you want to call them that which are not just financial they're political the industrial kind of elites in general and the ordinary population because you have the elites of the different european countries pushing through toward some kind of more unified integrated europe. but doing it against the will of the people at thirty there's no kind of popular demand for that. so i think first of all that's not desirable because if you're a democrat you need to accept that only people have a say in it and of course it means people are extremely cynical about the whole european project quite understandably because as i said they haven't really

benefited from it it's not just the people in southern europe who suffered austerity in northern europe as well in the netherlands in germany they've also suffered a stairs you have a long period randi what do you think about that how democratic is it is the euro is the own well the the german people. probably not in favor and the french are probably not and that the trip probably not and the u.k. has kept out the real question is what danny was hitting on it's about and elite concepts and the elite idea and in fact the mass of people have been sort of browbeaten into it as in the case for example of ireland where they had to vote twice to sustain so that they stayed in in the politics of it so i am with daniel that this is a quest it's an elitist project and not one which ultimately is based in the desires of the people and you know what i think everybody agrees that for this

system to work it has to be reform but there is there are enough time because you know we have to go we have to look at the mastery treaty in the lisbon treaty and and to see really what it was supposed to do what they can do we all know that the treated does allow countries to be bailed out but did we see a process of that going on now let's say they go or we go back and they change it is there enough time for the year old to do to go on to work through this process as the democratic process and each individual nation state deals with this because as we speak right now the german constitutional court is dealing with this issue. well at the european level the european union system has a reputation for being extremely bureaucratic and there all those gnomes in brussels who muck up the works but in fact it's extremely sleek. over the past year and a half it's been extraordinarily innovative creating new funds and creating new procedures

and so on one reason is because the monetary system as opposed to other parts of the european union is in fact largely in the hands of the heads of state and government and the central bank which is a small group of people who can make decisions and they've actually been able to move quite quickly in the face of crisis so i'm not worried that they cannot do things technocratic lee i'm worried as my other colleagues are that they won't be able to do things politically so it's true that if the german constitutional court or the german blueness tog were to block something it would be difficult to do i doubt that the constitutional court will do so because that's not their tradition the bundestag might but let's remember one thing and this gets back to the question of democracy right the germans have made away like bandits from the system the german and german exchange rate is forty percent below what it otherwise would be which makes germany one of the great export of nations of the world with a trade surplus all right you know what i'm afraid we've run out of time that is

excellent it's a sleep through this program a year from now and see where the euro stands me thanks to my guest today in london and princeton thanks to our viewers for watching us here arche see you next time and remember prostate. we'll. bring you the latest in science and technology from around russia. we've got the future covered.

debt ridden countries watching nervously with an imminent ruling by germany's constitutional court on the legality of giving bailout packages. at least ten

people killed more than sixty injured by a bomb blast in the high court in delhi preliminary reports suggest the explosives were left in a suitcase near the building. calls for independence from the u.k. grow louder in wales where high nationalist sentiment is coupled with a desire to have control over its own economy. and the many so now at the third annual global policy forum here and we're today's focus is security and multiculturalism join me later in the program for more details. noon in moscow i match reza good to have you with us here on r t our top story a landmark ruling by the german constitutional court on the legality of the e.u. ballo packages will be delivered shortly the procedure was triggered by.