generally distribute. them. on are cheap. and call them back here's a recap of the main stories we're covering today on our t.v. germany's highest court has issued a much anticipated ruling on the legality of bailouts of looting worldlings participation in the eurozone rescue funds but the court also said that the german government would have to get the approval of parliament before providing further financial aid in future. ellie's ten people have been killed and over sixty injured by a bomb blast near the high court has been in new delhi and pakistan based terror group has already claimed responsibility. for his foreign minister has called for the

warring sides in syria to return to dialogue the comments were made at a meeting with his french counterpart as moscow and paris agreed that they don't want the situation in libya to be repeated in syria. well that's peter lavelle and his panel of guests discuss the fate of the euro and our debate show let's coming up on r.t. . liz . can you see. the low welcome across town right here about is it time to write you a picture where for the euro as the 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. can the same. across 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 crossed 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 we this is cross-eyed it 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 landscape of the european union crisis. it is a global reserve currency the only potentially viable alternative to the gemini of the u.s. 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 a 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 to a monetary union to retaining their fiscal solvency at a time of crisis that cannot work be heroes existential problem is that its monetary side the only say that it has imposed as a single currency and the single interest rate on economies ranging from the basket case in greece 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 choking off lending one of the possible solutions is a fiscal union or transfers it is quite obvious that the limit or for the many to

do. for your coming to the one and my guess is that at the end of the it's hard to say when that will happen it will be driven the terms of 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 in 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 euro and possibly the eurozone if the biggest threat to the global financial system monitor and i. r.t. . ok rami and i to go to you first in london are you writing the obituary for the euro write down because issues will be the news flow coming out about the

discouraged sea is just unbelievable and as we speak right now germany may be deciding maybe not today but be the ultimate future of this current slee 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 it's percentage of g.d.p. was one hundred fifteen percent but it's results of the austerity measures it's

gone up to contain 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 under things like understand things like the shift from labor production to capital production and they don't understand that always putting money out interests and not worry ok there are you are an economy i thank you see there you prayed and we got you 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 be a bit you are 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 getting good peons are going to be going to finally interdependent going one way or the other ok daniel i mean the line i mean you just finished their highly interdependent one when it came and 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 an election defeat a local election defeat in her country because people are saying we don't want to

pay for the delays the news of the greeks in the in the misfortunes of the portuguese in the spanish and the irish i mean i mean that's pretty common sense ok . well i would like to add the battery to the euro but i don't think unfortunately we're positioned 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 growth of the unproductive countries like portugal and greece and when you look them together economically 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 so 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 it rightly if i think this whole crisis is very interesting expression particularly for the people that really want greater union across stronger union a political union that would also include a fiscal union this is the only way to 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 its currency can be saved. yes but it would not save it because in fact at the levels of that are much too high you see behind the problem of the euro this is the bigger problem of what is called the free market system which endlessly creates that does not put it into the real economy and the spreading now that is collapsing on an even larger scale

but in fact europe and there is a certain arrogance behind those who promote it at 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 and 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 collapsing and part of that is the problems of the collapse of the euro ok and i decided salvo shot over your your bow there you want to apply. no it missed because we're not debating the it we're not baiting the airy abstractions of free market economics in fact this isn't a free market economics 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 write the print the problem merican faces is she is going to have to pay for the debts

which german banks the money the german banks of the land to countries like greece one way or another so if the euro 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 and these other rabin's 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 americal 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 daniel it's very interesting because you know the way 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 the political power of these countries. well i think i've been saying is one sided with respect because there

would be cost involved with unwinding the euro or withdrawing from the euro zone. they're also very high costs involved with maintaining your own because you're 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 though 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 of we've had a relatively stable world economy over that period but now we're entering a period of instability i think it can be very hard to maintain euro zone intact despite what the politicians won't ok right i mean what do you think about that i mean let's get a worst case scenario is that we have to start kicking countries out like greece i

mean you keep one country out of the whole house of cards falls apart right that's what we keep hearing in the media. well you may get a greek default which you may get it the other way round which is that germany and failand. 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 a 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 a result of these big factors 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 in europe i mean let me jump in here we've got to say and after a short break we'll continue our discussion on the year old state with r.t. . if you.

think it's going to. emission free credit patience three kinds four charges free. range month free. three stooges free. download free broadcast plug in video for your media projects and free media dadar teton time.

will be soon which will brighten. move the sun from phones to patients. whose phones totty don't come. and you can. still. welcome them to cross computable to remind you we're talking about the eurozone crisis. can. still. take into 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 where it's pointed out just how different these economies are if you look at the paid 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 to a 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 and 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 to slippery slope is there is it 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 your start to you know bait these countries because a lot of money could be made off of their debt a very expensive debt i mean it's just seems to me that no one is allowed to fail that's why the system will ultimately fail because no one is allowed to fail fall apart within it. i think there are certainly vested interests involved and certainly the parents will put pressure on the respective politicians to bail them out when necessary but i think one reason why this discussion i'm

talking 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 without them selves it has to be a democratic process it has to be something which you would need 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 randi it's very interesting life like it had going to jump in if i could just add if i could just add to what daniel said the real problem is that the it is thought that the interests of that financial elite automatically then results in furthering the

interests of main street and that is simply not true. and actually controls a vast part of the economy and rips off the trees for its own purposes and in its actions does not actually forward they really can't be in the spreading of the real economy so there has to be a challenge on actually leak 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 finally you can you can 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 you let 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 nose 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 lost and you didn't receive any changes because it is aligned these economies busy other but it'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 then else quite correct the problem is a monetary union without convergence of underlying 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 whether countries are willing to make domestic constitutional commitments to make this thing work germans are not going to pay unlimited amounts of money ok keep greece afloat ok ronnie jump in go ahead. peter peter's mindset is that there is only a little reform needed and everything will be hunky dory he doesn't for example understand that he's own country unemployment's not ninety percent it's least twenty to twenty two and it's forty percent upon amongst blacks and hispanics he's not saying there are very fundamental problems and as a result the euro is going into crisis as is the usa is going into crisis and all he talks about is a late reform and nothing is happening in the us usa and the nothing is really going to happen in europe and doesn't see the fundamental problems in the situation here and in the usa in fact saying oh everything will get back into balance for the

good of reform when he's wrong and then you'll find out are you one of this one of the easiest made all right and you jump in your car right ahead. no excuse me i did i didn't say anything of the sort everything i said had a question mark after work 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 right a fiscal union they may engage in things like euro bonds and so on but this is a 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 reforms and that's the point i'm making and it may or may not succeed myself i'm increasingly pessimistic daniel of 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 and say what it might getting out of it i'm paying taxes here to bail out some guy group growing olive's 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 that huge gap between the euro elites if you want to call them that which is 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 or 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 these people are extremely cynical about the whole european project quite understandably because as i said they have already benefited from it it's not just the people in southern europe and suffered austerity in northern europe as well in the netherlands and germany they've also suffered us there are several long periods where i mean what do you think about how democratic is the is the euro is the zone well the the german people are 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 daniel's hitting on it's about and he leapt concepts and a little idea and in fact the mass of people have been sort of browbeaten into it as in the case for example of island where they had to vote twice to sustain it and

make sure that they stayed in in the politics of it so i'm with daniel that this is a question it's an elitist project and not one which ultimately is based in the science of the people and you know what i think everybody agrees to for this system to work it has to be reform that there is there are enough time because you know we have to go we have to look at a master treaty in the lisbon treaty and if you see really what it was supposed to do what we can do we all know that untreated does not allow our countries to be bailed out because we see a process of there going on no let's say they go or we go back in a change is there enough time for the year old to do to go on to go through this process is the democratic process and each individual nation state or 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 are 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 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 goodness tog would have 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 night 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 nations of the world with a trade surplus already just a lot i'm afraid we've run out of time that is easily safely assume this program a year from now and see where the euro stands me thanks to my guest today in london and princeton thanks for viewers for watching us here arche see you next time and remember a prostitute rules. for the full story we've got it for the time the biggest issues get the human voice face to face with the news makers.

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