thirty minutes time next though our t.v. brings you an interview show spotlight with al gore now. twenty years ago the largest country in the world disintegrates into the first. fleet which had been trying. to teach began a journey. where did it take them. hello again and welcome to. the show on part. and today my guest is. the european economic turmoil the global markets

spiraling down that's when say another recession may be just about to start. facing financial turbulence filled with stuff sliding in the ruble losing ground against the dollar and you officials insist it's all natural and there's no need to . sell is the second recession jeff a scary story or should we really want. to ask one of the most prominent freshman. of the new comic school. russian officials say the national economy has almost recovered after the recent recession well 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 prize 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 allusion of this question has not really calmed the market has not really a strong message here what then you're going to make policy will be because i think nobody really have any bells that what you are putting will continue around you 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 there we need to know big government officials in his new government and there are 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 when medvedev instead of being president becomes the new young premise i would like to remind you that occasionally the government or shuffle actually happens before the elections even before the parliamentary election so maybe a bit of shuffle actually happened before in december because what happened in two thousand and seven runs the government was for. the governments the downs of course was appointed and if you keep government ministers came in and they actually continued through their actions you're going to be it's already starting we will we know that one of the key figures and put it is 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 over i think i think we know that cauldron will not be in the government well we don't know all 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 is replacing him because the current replacement the acton finance minister and johnson apparently is a 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. is it true you should know that rumor that they're 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 the leagues in minister of finance alex equal that it actually signed up in the us 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 a. form of father who has to get 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. whether perhaps sorry that it was

a slogan or the recession was well a politician of such a scale says slow. army growth he means doubtful but you know maybe i think i think i think if the politicians in europe and the us do their job very well still get a face in the decay of slow economic growth simply because they're better over it so large that they will have to cut expenses raise taxes and at least in the short to medium run the growth will be slow but i think a cauldron is right in. your interest cove and this is a very tangible risk of a recession something like we had in two thousand and eight where a major financial institution collapses and there is a financial panic which results in what's called a liquidity squeeze and it's very hard to morrow in 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 a six 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 part of 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 you know that to me that. it has become natural for the u.s. to live beyond its means the countries that 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 a from now until this year how soon are 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

just a little hole that would style last minute debt ceiling do you didn't exactly true . now to be a happy ending to this story. 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 which three days the markets reacted with panic and the sharpest 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 this there belies 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 lenders worries a bad bad bad about the dollar because because i suspect that what happens in the

states is more a game 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 i think i think you're right the show really warty by the u.s. she mentioned. the u.s. was facing default actually that somebody else was facing the risk of technical default and of course it was as you say any sort of a game a 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 for ever he is or she is in two thousand and twelve two thousand and thirteen starts 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 said well not really when you present you mean about it has no chance no it could be in your new democratic president obama but usually in a presidential democracy like the yeah in the beginning of

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 of 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 worry about greece i think greece greece destruction or defaults already 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 into spain and italy and then i think will will be facing real trouble i don't think it's too late now i think there are still a number of things there 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 a new government in russia. putin i have a quote here also mentioned that the new government in 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 let the big hear you the new president will have to take the popular stance what does he mean by this and i think i think you mean something that mr quadrant has mentioned many times. you just called it americans living beyond their means to russians on paper live within their means we do have a budget deficit but it's limited to also have very little of that and we have an easier fund 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 over the next over the next ten. you're sort of so rushing you completely that he designed inspection system. somehow bring its house in order that because what we are doing now is sustainable at one hundred twenty or one hundred forty dollars per barrel by those will be sustainable if oil prices are eighty or so even sixty dollars per barrel so. the new economic school spotlight surely will continue to talk about the possible to the problems with all the things you say would be.

the way. to. that's.

welcome back to spotlight on american novel and just to remind you that my guest in the studio today is city good evening actor of the new canonic school mr good 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 does that mean we mean we've increased the spending let it happen it happened because the policy of mr couldn't the finance minister the government to put in medvedev or is it just objective reasons i think i think i think of the person responsible eventually is of course the new report i'm bassists his government his policy and i think even he little 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 knew that 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 of say year two thousand and seven the russian budget would be balanced at fifty five dollars for i don't know the times where no price was one percent certain was awful but i remember times when we said thirty thirty's yeah exactly thirty one were also one exactly and this is growth in just five four years . from fifty five to one twenty five shows the level of spain the impression government has to throw into the economy of government companies to be leasing spendings matters inclusions what are you spending what we're looking creasing the military budget we are increasing we are in the 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 if we will and this is why mr calderon is not is not happy about this policy we will spend on infrastructural pensions. by

almost a factor of one and a half we raced. spending on the police there they're all all avenues of spending very rushed is actually spending more and more and more and part of their bodies because i think the whole on the call more the russian government has to sustain the popularity through more spending well. the finance minister the former finance minister 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 will be rather characterized as conservative and responsible rather than liberal because it is not the job of finance minister to be liberal or not his job is to keep budget balanced or in surplus or no prices high to pay for say for the

range of the women 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 minimum and power up 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 this transcend he eventually. 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 medvedev gave the speech in st peter's american june which could be called a liberal speech where president you've said state capitalism is not my approach my approaches but it is ation to figure lation improving investment climate decentralization of economic and political decisions that will be a liberal in a liberal leaning the military budget of which president may dispose of the other day the other goods act could actually have sold no not really how we increasing how we increasingly want to 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 against state capitalism but we only see the increase of the presence of the state in the economy we include it in receiving could be used by the government we seem to need to wriggle asians and in that sense unfortunately we have not seemed the new economic policy board from a very different we can have been talking about some way to go to the moon get the money from bora where 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 you mentioned also kept an outflow of cattle exactly there would be the situation where russia will and will not be able to borrow a lot simply because the investors will not like the indian to countries like russia well. we've been talking here now for about fifteen minutes and i get the impression that we are. walking around the classic

question which some called guns vs better you do have is it true is it would rush is facing today guns or butter 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 the. russian space in 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 there and 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 their disaster russia doesn't have a currency like the 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 we're going to see as we've seen the ventless of the soviet union twenty years ago we've seen the default in russia in one thousand nine hundred they have me actually happen in the russia if if if russia runs out of cash that may actually have a serious economic and political implications but would russia have to borrow who 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 how would they should they expect that this country would be borrowing money so as long as it's not if there is a global recession or even if they just oil prices goes down substantially the national have to borrow and in principle that a ship has a very little debt burden compared to european or and the european countries sort of the united states or japan a year. going to be a risk yes at the end i think that russia will be able to borrow just

a little bit and that means that it lot of this grants spend 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 in soviet union collapsed in military spending went down by a factor of ten or so simply because soviet union and then russia didn't have 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 modern ambitious modernization project even if when he when he is no longer protocols prime minister i'll be i'll continue the modernization project but modernization projects are aimed as they say into the future but they cost a lot today. obviously

a significant spending in there in the russian budget how they could compare comparable to the military budget to put the pension budget and so on and of course not when we're talking about a president of a of space very projects like scald govern other related projects there are not a bit of money you could smaller than actual the doors that are magnitude smaller than the military program and that sounds our pension pension spending these are completely different things this is not where they are 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 reading of sources will be privy to zation and i think russian government will have to sell its crown jewels and it is very unfortunate that the 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 real 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 the russia the fact that investment is actually the russian investor themselves don't invest in russia but they are 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 political risk is high in scope as critics expropriation is high and we don't know what the economic policy of the new government will be as far as i know this far as i understand the best the russian capital is 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 surprise us in europe a lot you can buy you can buy stock in europe for a fraction of what or what used to be and that. 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 risk and of course

corruption and it's for appreciation are issues that in the subset of most what about thank you thank you very much and just to remind that my guest on the show today was still a gay green director of the new economic school spotlights wildlife would be back with more friends and common song was going on and then outside russia until then stay on our sea and take it.

more violence erupts in northern ca suppose nato troops adopt a shoot to kill policy toward serbian protesters demonstrating against the seizure of power disputed checkpoint. newspapers are already getting their teeth into the governor coming political challenges facing russia as president of bennett says bush's popularity makes him the best candidate for the job. and human rights watch raises the alarm over a growing number of repainted views just by a revolutionary fighters in the via plains tunnels that obviously last stronghold sank into medicare human rights. this is r t coming to live from moscow i'm marina joshie welcome to the program violence has flared to ghana new.