terror in libya thousands are driven from their homes in the coastal city of syria as fighting between pro and anti kadafi forces show little sign of letting up this as the red cross warns of a dire humanitarian situation on the ground. and that brings you up to date for now i'll be back with more and less than thirty minutes next on our t.v. it's our interview show spotlight with host al gore enough. twenty years ago the largest country. to certain places of the. fleet which had been itching. to teach began a journey. where did it take.

paolo again and welcome to. the show on parts. and today my guest is soon to be. the european economic turmoil the global markets spiraling down that's when to say another recession may be just about to start. its face to financial turbulence to stop sliding in the ruble losing ground against the dollar and you officials insist it's all quite natural and there's no need to. sell is the second recession jeff the scary story or should we really want. to ask one of the most prominent. of the new comic school. russian officials say the national economy has almost recovered after the recent recession where prices are bouncing around a relatively high price on the g.d.p.

is growing again but the global markets are unstable and the fluctuations in the oil price to having an effect on the russian indices yet another challenge is the resignation of the highly respected finance minister. he has been in charge of the country's fiscal policy for more than a decade and his departure is seen as a blow to russia's financial credibility. mr greer for welcome to the show thank you very much for having me thank you for being with us well first of all the latest political news is there is that the main russian political intrigue the intrigue of the. of the presidential elections in two thousand and twelve has been resolved well at least the candid from the ruling party is going to be played and reputed well this news didn't really influence the markets i mean seriously why does it mean that that that from the money point of view from the point of the of of of the economic financial games putin or medvedev

makes no big difference i think i think there is a lesson of this question has not really calmed the market has not really a strong message for what then you can to make policy will be because i think nobody really had any doubts that when you were put in will continue running in the economy in the country like you used to be in the prime minister and in that sense the main question for the markets is what kind of economic policy he will be carrying out and for that we need to know the key government officials in his new government. and that is something that we have not had any answer to yet so soon so we should wait for that government reshuffle that we may be facing were led to be there instead of being president becomes the new young prime minister i would like to remind you that a kitchen island government a shuffle actually happens before the elections even before the problem entered the election so maybe the shuffle actually happened before december because what

happened in two thousand and seven government was for. governments that downs of god was appointed and if you keep government ministers came in and they actually continued through their actions years maybe it's already starting we will we know that they had one of the key figures and put in the government minister could in whose finance minister and deputy prime minister. he lost his job recently and do you think that may be a sign of a future reshuffle in the government good that has already started i think i think we know that cauldron will not be in the government but we don't know well we don't know yet but it looks like he's not going to be in the government he said he doesn't want to be in the government however we don't know who's replacing him because the current replacement the acting finance minister and. apparently the temporary replacement so they will be looking for a more politically connected politically important figure who will be actually

around in this very key ministry and is it true you should know that rumor there that couldn't didn't want to stay in the government because because he expected to become prime minister i think i think they're almost there now nothing this is plausible explanation but i think judging by their public statements both called innovative men before me and before calling was actually quite unhappy by the military spending program which was mainly and lobbied by the president in bed of president medvedev was correct saying that both prime minister putin and links in minister of finance alex equal that it actually signed up in doris this program and they actually signed on to this program but yet it is through that called in the employ of this program and innovative was the key person to push for former fighters who used to called in on the eve of his resignation he said the following i quote the global economy is facing a decade of slow growth that will make it harder for countries to service debts

russia faces risks of a recession if the us and europe economies fall into recession and quote how probable is this negative recession scenario i think i think when we say slow economic growth is actually a positive scenario when you know whether perhaps sorry that it was a slogan or the recession or the will of politicians of such a scale says slow. army growth he means doubtful but you know maybe and i think i think i think if the politicians in europe and the us do their job very well still we are facing the decade of slow economic growth simply because the debt overcomes his soul arch they will have to cut expenses that are a star excess and at least in the short to medium run the growth will be slow but i think a cauldron is right in. if you're into a risk of this is a very tangible risk of a recession something like we had in two thousand and eight where in major financial institution collapse and there is

a financial panic which results in what's called liquidity screens and it's very hard to morrow and land and therefore there is an implication for the real economy and the recession and that will of course mean a lot for us because when people start thinking about to be ascs they try to invest less in the risky assets and russia is a risky company so they'll be a withdrawal of capital from russia and so in russia financial crisis will be felt even in even that well we mentioned the united states the political debate in the united states over dealing with the country's debt has almost brought the world to the verge of another global recession and here's a story on that from spotlights union that he made. it has become natural for the u.s. to live beyond its means the countries that he has been accumulating for decades the reason of the debt ceiling by congress it's been done almost every year since nine hundred sixty the procedure has long been and from ality this year how would.

you this been given up for the sequel to politico through which the u.s. debt holders in suspense at one point there seemed little possibility that the republicans and democrats would come to an agreement and the danger of. real is this whole who would style last minute debt ceiling do you didn't exactly turn. now to be a happy ending to this school three days off to reach standard and poor's downgraded the country's credit rating for the first time in its history to you wes almost two hundred weeks three days ago markets reacted with panic and the sharpest tool since the financial crisis three years ago. the crisis in the you were sent out strong shock waves throughout the international markets including russia even though the situation even for the stabilized there's still the fear of the debt ceiling crisis beating and the west go back into recession and that feel will only grow on to

radical and long term solution to the debt problem is found in washington. well actually i don't share your learning. worries a bad bad bad about the dollar because because i suspect that what happens in the states is more a game a power game then real life though what's happening in europe may be more worrying because they're trying to hide the problem you know do you agree i fully agree here i think i think you're right the show really warty by the u.s. she mentioned that u.s. was facing default actually that somebody else was facing the risk of technical default and of course it was as you very sort of again sort of a game i think it was it was a big big negative surprise for everybody that u.s. politicians are acting saw the responsibility but yet i think was shown to be rewarding i think the new president clear he is. is in two thousand and twelve two thousand and thirteen starts now probably two thousand and thirteen starts cutting

the expenditures and raising taxes and bringing in their cars and all of their probably before the election so it will not really help when you present you've been a barber who has no chance no you could be in your new democratic president obama but usually in a presidential democracy alegrijes in the beginning a new presidential term the new president comes in and says i have some time let's do them for you. i think the second term of the first couple of years of the second term is that it is the time to do to do to exist. in europe you're absolutely right the politicians have lost credibility you mentioned could have been seen things which are probably more diplomatic i think in europe this game went too far and i think politicians have been slow in doing too little too late and i think they've lost a lot of credibility i think there are risks are very high and i think we shouldn't only would be involved greece i think greece greece restructure in a default solidarity given think we should worry about bigger countries such as

spain and italy and eve. they can tag and from greece is not is not is not prevent them from spreading to spain and italy and then i think will will be facing the real problem i don't think it's too late now i think there are still a number of things that can be done in europe but i think judging by previous acts of politicians we should be worried human to new economic policy that we may expect from the new government in russia. putin i have a quote here also mentioned that the new government a quote will have to take unpopular steps to deal with the global financial tormato end quote so said so put into storage and i will i will not all know a lot of good before i live with you then your problem is that we'll have to take the popular steps what does he mean by this i think i think you mean something that . was mentioned many times. you just called it americans living

beyond their means russians on paper live within their means we do have a budget deficit but it's limited also have very little that we have an easy or fun but this is only because oil prices high and no price comes down russia suddenly will face the reality that russia's been living beyond its means and for example pension system is not balanced so over the next over the next ten. years or so rushing in to completely redesign its pension system and somehow bring its house in order because what we are doing now is sustainable at one time that twenty or one hundred forty dollars per barrel but it will not be sustainable if oil prices even sixty dollars a bottle so. the new economic school spotlight. will continue to talk about the possible problems with all i say with the.

very first verses of the bible is that all human beings are created but sentimental came in god's image and it doesn't say just jews or non jews. sixty to seventy percent of what i did as a combat soldier in the occupied territories was to do with deterrents doing what we call making our presence felt to go out should somebody so they hear a knock on some doors run to the other corner and they don't know how religion and nationalism not just judaism have been a part of the problem they've been part of what leads to. bloodshed if you want to bomb gaza and kill thousand four hundred people in a month and you want to expect that this will have no effect until a few you have to be either extremely naive or extremely stupid to hear

a religious jew calling another joe and that's the way they really did it. welcome back to spotlight on a novel and just a reminder that my guest in the studio today is city gay good evening actor of the new canonic school mr goody if you just before the break you mentioned one twenty five dollars per barrel has the oil price that is that is reasonable for russia well. as far as i remember a couple of years ago the russian budget the budget of this country could be sustained at a price of around seventy to eighty dollars per barrel and we said well we have two hundred three hundred but we can survive it so now today we see one twenty five one

thirty not less so there's me you mean we've increased the spending let it happen it happened because the policy of mr cordray in the finance minister of the government to put in medvedev or is that just objective reasons i think i think i think of the person responsible eventually of course for him and put him in business his government his policy and i think even if you don't purpose absolutely i think i think for us that was a reaction to the crisis but then. clearly understands that his political support is based on their ability to raise material standards and even standards of russian population and if you look he spends more and more and you mentioned seventy two dollars per barrel if we compare it to the situation to the year two thousand and eight lehman brothers collapse and that crisis and i would remind you that before that year say year two thousand and seven the russian budget would be a balance of fifty five dollars for i don't know the times where an oil price was.

president this was awful but i remember times when we said thirty thirty's thirty one we will survive exactly and this is growth in just five four years from fifty five to one twenty five shows the level of spending impression government has to throw into the economy the government can point us to shoes and releasing spendings matches in greece and what are you spending. we're not increasing the military budget we are increasing we are increasing military budget already. said we shouldn't crease military budget which should include even more of the increase in that we will increase even more and we will and this is why mr calderon is not is not happy about this policy we will spend on infrastructural so we raced pensions. by almost a factor of one and a half we raced and we raced spending on the police and they're there all all avenues of spending very rushed is actually spending more and more and more and

part of that is because i think the whole on the call more the russian government has to sustain the popularity through more spending well. in the finance minister the former finance minister hey he was labeled to be a liberal he characterized the liberal the liberal wing of the russian public policy makers russian government. was his financial policy really liberal and are we facing the end of the liberal finance policy in which his financial policy would be rather characterized as conservative and responsible rather than liberal because it is not the job of finance minister to be a liberal or not his job is to keep the budget balanced or in surplus when no price as high to pay for say for the rain in the window of prices goes down and in that sense he did his job he did his job especially we'll see five years to go through the crisis spend in manpower after the crisis spending did not go down in the then

why does everybody call it a liberal because he was very vocal in this he was very critical of all these strands and he eventually stepped down which actually showed that he didn't like what what was happening i think the liberal policy should be done by somebody else and president reagan gave the speech in some bit of american june which could be called the liberals. beachwear president of said state capitalism is not my approach my approach is part of it is ation to figure lation improving investment climate decentralization of economic and political decisions that will be a liberal in the liberal and more recently the military budget of which president led to the spoke of the other day of the exact absolutely no not really how we increasing how we increasingly will too but we are increasing the military budget we are not privatizing even though there's been a number of speeches and prime minister putin also said i'm a good state capitalism but we only see the increase of the presence of the state in the economy we include receiving could be used by the government we see

increased the regulations and in that sense unfortunately we have not seen the new economic policy both men of a different putin have been talking about some way to go to the moon get the money for more of their it's a good question that's a good question russia can borrow a lot but i think if oil price goes down there what happened because of a global recession and that's the situation of the outflow of capped an outflow of capital exactly there will be the situation russia will and will not be able to borrow a lot simply because the investors will not like the indian to companies like russia well. we've been talking here now for about fifty minutes and i get the impression that we are. walking around the classic question which some call the guns versus butter you do have is it true is it would rush is facing today guns or both or that's a good question i think i think we don't really know whether russia needs

a lot of guns because i think nobody in their in their sober mind would see that. threat from neda but that's another issue i think one issue is we need to leave within our means and your critics pond and t.v. and then we're stuck in the us living beyond their means now being financed by the standard and poor's or at downgrade in and also the markets think russia should also understand that there is a difference though between the u.s. and russia u.s. has a more than two hundred scientists of service and government that flexible market economy develops financial system so if they live beyond their means it's not a disaster russia doesn't have a currency like dollar and so if russia runs out of cash we've seen that happen in eight years i should say they mean done and then you are going to see as we've seen the events of two of the soviet union twenty years ago we've seen the default in

russia in one thousand nine hundred there may actually happen in the russian if if if russia and south of cash that may actually have a serious economic and political implications will russia have to borrow he said russia can borrow russia can borrow a lot so so i know a lot of specialists are watching our channel today maybe right now will they should they expect that this country will be borrowing money since the launch is not if there is a global recession or even if it just oil prices goes down substantially and russia will have to borrow and in principle russia has a very low debt burden compared to european or only european countries sort of the united states or japan yet it. going to be a risky asset and i think russia will be able to borrow just a little bit and that means that your lot of this grants spending a lot of military spending will have to become and i think this is exactly minister called it's warning. to the president in very different prime minister putin you

can promise a lot but it is very unlikely that you will actually have to default on your promise and this is this this is something that happened twenty years ago when soviet union collapsed and military spending went down by a factor of ten or so simply because soviet union and then russia didn't have the cash to pay for these guns or rockets or whatever and that me well happened in russian. president medvedev said that he will continue to work on his modernize ambitious modernization project even if when he when he is no longer protocols prime minister i'll be i'll continue the modernization project that modernization projects are aimed as they say into the future but they cost a lot today. are they a significant spending in the russian budget how they could compete comparable to the military budget to put the pension budget and so on and of course not when

you're talking about the present event of space very projects like scoll cover and other related projects there are not a bit of mine you could smaller than actually adored the magnitude smaller than the military program and in that sounds are french and pension spending these are completely different things this is not whether they will be saving money you know they will not be able to save a lot of money by cutting this project so i think i think most of the revenue sources will be privy to zeeshan and i think russian government will have to sell its crown jewels and it is very unfortunate that russian government has not done and before been stock prices and oil prices were high unfortunately as it is very likely that the russian government will sell the government seeks in ross near treaty because better bond. from when the oil prices law and therefore the market will not be that much for this essence but the russian government will have to look at well experts say that june the last twelve months since the autumn of last year russia has been experiencing

a capital flight amounting to about five percent of the g.d.p. what are the fundamental reasons for for the outflow of capital work well i know you have already mentioned that people would not like to invest in this country but why why do russian capitalists move their own money away that's a very good question and i think it is especially striking given that the outside world is not doing that well and given the huge opportunities for investment in russia the fact that investment is actually the russian investor themselves don't invest in russia but they've been mining our design of the guys who know how to do business in because i'm sure they were born the i think though the language actually know how how everything moves here compared to europe you know even we just mentioned europe and travel years of travel and yet the russian investors take money out why big probably because investment climate is more than great corruption is high but ridiculous risk is high in the scope of expropriation is high and we don't know or what the economic policy of the new government will be as far as i

know this far as i understand the best the russian carefulness can do whatever russian is losing so you guys are going to march when they move their money away to the west they only do this saving their money they're not making a lot of money there they're making their money here in their own country there they just say these are so this has europe is you are becoming like a savings bank for the russian oligarchs not not not necessarily and there is some troubles actually reduced prices in europe a lot you can buy you can buy stock in europe for a fraction of what what used to be and that's million per unit is there even though the market economic situation is so bad i think when we're talking about investment outflow i think this is the indication that something is really wrong in russia. in economy right now or in russian politics i would say that political idiots can of course corruption and it's preparation are issues that in the subset of most what about thank you thank you very much just to remind that my guest on the show today

was so gay green director of the new economic school spotlight spotlight back with more friends than common thought was going on in and outside russia to stay on our sea to take a. wealthy british style sun. spot on the. market. to. find out what's really happening to the global economy with mike stronger for a no holds barred look at the global financial headlines tune into a report. on

the war path and nato troops in kosovo impose a shoot to kill policy after bulldozing barricades erected by angry ethnic serbs over the seizure of a disputed checkpoint trouble reignited in the region after pacino sent in troops to take control of the border post leading to serbia two weeks ago the move infuriated the mostly serb north of the breakaway republic who say kosovar albanians are trampling on their rights. especially the choices made by the people and the music was a top solution true in any politician with any political force may do this in the next what do you mean interesting has been due to leave the people decide who they should listen to those whose popularity is great show this is what democracy is a very. present in the g.l.m. says putin's popularity was that the factor and backing him for the president in two thousand and twelve particularly.