how would prince or to discipline the entire truth tell me what your group the fictional guru guild would international. every green her till in terms of. welcome back this is live from moscow with me for the top stories now a deadly situation develops in northern cause of oh as nato implements shoot to kill orders to break a roadblock by local serbs near a disputed checkpoint the border crossing was seized about two weeks ago by cause of a police aided by the alliance and since then clashes have left several serbs injured . people in tripoli take to the streets they're angry at the former rebels who are still carrying around guns in the city. one of the few remaining

strongholds of the city of sort of that's now facing a serious humanitarian crisis. and operation occupy wall street aimed at inequality and corporate influence is growing in the us the protests are heading of f. third week now and fury has turned towards the police following a series of arrests and allegations of brutal behavior. those are the main headlines for this saturday here in our stay with us here in half an hour's time but for now it's spotlight. twenty years ago the largest country in the world to search with a sense of. what had been

each man to teach began a journey. where did it take. hello again and welcome to the life lived in the shadow on part think i'm going on wednesday my guest is superheat woody. the european economic turmoil has sent the global markets spiraling down wars and threats would say another recession may be just about just talked his face with financial turbulence food itself sliding in the ruble losing ground against the dollar and the view yet officials insist it's all quite natural and there's no need to. sell is the second recession jeff a scary story or should we really worry about i'll say we're asking one of the most

prominent russian economists structural problem you come at school so he could. 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 are having a badge on the russian indices yet another challenge is the resignation of the highly respected finance minister aleksey couldn't 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. disagree of a welcome to the show thank you very much evan thank you for being with us well first of all the latest political news is there is that the main russian political intrigue in 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 pretty well this news this 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 the economic financial games or medvedev makes no big difference i think i think there is a little of this question has not really uncommon mark and there's not really a strong message rewarding you can to make policy will be because i think not where you really have any. will continue around in the economy here in the country like he used to be in the prime minister and event so the main question for the market is what kind of economic policy he will be carrying out and for there to be neutral nor the key government officials in his new government. and that is something that we have not had any answer to yet so i thought we should wait for the government

reshuffle that we may be facing when medvedev instead of being president becomes the new young friend and i would like to remind you that occasional in government a shuffle actually happens before the elections soon and before the problem many election so maybe going to shuffle actually happened before in december which is what happened in two thousand and seven government was for. the government downs of god was appointed and if you keep government ministers came in and they actually continued through the election season starting we will we know there one of the key figures and put it was the government ministers who did 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 the has already started i think we know that called in will not be in the government but we don't know all of well we don't know yet but it looks like he's not going to be the government he said he doesn't want

to be in government however we don't know who is replacing him because the current replacement the acton finance minister and consul apparently is a temporary replacement so they'll be looking for a more politically connected. board figure who will be actually around in this very key ministry. is it true you should know that rumor they're called in the door to stay in the government because he expected to become prime minister i think in general motors there. was a will to punish and i think judging by the public statements both called in an invidious and then being mean before doing was actually quite unhappy barred the military spending program which was nearly washed and lauded by a president can be president medvedev was correct saying the north prime minister put in. finance i would see call that it actually signed up. this program and the actual are signed on to this program but here it is called in the in play this program and indeed it was the key person to push for reform and for those who were

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 colonies fall into recession and quote how probable is this negative recession so no i think i think when we say slow economic growth it's actually a positive scenario. sorry that it was a slogan or the recession was well the politicians of such a scale says slow. on the growth he means doubtful yeah well maybe i think i think i think if politicians in europe and the us do their job very well still be afraid of slow economic growth simply because the death of a large they will have to cut expenses raise taxes and at least in the

short to medium run growth will be a slippery slope but i think it is right in. the current thirty schools and this is a very painful bodies for thirty session something like we carried in two thousand and eight or a major financial institution collapses and there is a financial panic which results in what's called liquidity squeeze and it's very dark and war on land and therefore there is an implication for the real economy and the recession and there people of course mean a lot for sure because when people start thinking about the disks they invest less in the assets in russia risky company stock will be a withdrawal of capital from russia so in russia financial crisis will be felt even in even that 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. me that. it has become

natural for the u.s. to live beyond its means the country's need has been accumulating for reason of the debt ceiling by congress it's been done almost every year since nineteen sixty the procedure has none from now until this year how. are you this been given up for the sequel to politico through which the u.s. debt holders in suspense could one point this seemed a little possibility that the republicans and democrats would come to an agreement and the danger of. real. good style last minute they absolutely do you didn't exactly to. now to be a happy ending to the story. after it standard. greeted the country's credit rating for the first time in its history. which three days. markets reacted with panic and the sharpest fall since the three races three years ago. the

crisis in the due west sent out strong shock waves throughout the international markets including russia even though the situation for the stabilized there's still the fear of the debt ceiling crisis beating and the west go back into recession and that feels real and to really call the long term solution. is found in washington. well actually i don't share your. worries a bad bad bad about the dollar because because i spent 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 here do you agree i fully agree here i think i think you're right we shouldn't really worry. she mentioned. us was facing default actually that somebody else was facing the risk of technical default and of course it was and she really sort of again sort of again i think it was it

was a big big negative surprise for everybody but u.s. politicians i reckon saw irresponsibly but yet i think we shouldn't be rewarding i think the new president clearly he is she is in two thousand and twelve two thousand and thirteen starts now probably two thousand and thirteen starts cracked in the expenditures and raising taxes and bringing in the cars and all of their probably before the election cycle not really how can you present you mean the governor has no chance know it could be in your new democratic president obama but usually in a presidential democracy. in the beginning of a new presidential term the new president comes in and says i have some time let's do the employer. and you think the second to the first couple of years of the second term is that it is the time to. think in europe you're absolutely right that politicians have lost credibility you mentioned could have been seen things which are probably more diplomatic i think in europe this game when the far and i think politicians have been slow in undoing fully till too late and i think there was

a lot of credibility i think there are very high and i think we shouldn't only would involve getting a second greece greece destruction in a defaults of any given think we should worry about bigger countries such as spain in poland and eve. they can tag and from greece is not is not is not prevent them from spreading for spain and italy and then i think we'll will be facing a 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 previous acts of politicians we should be worried are you mentioned 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 they quote will have to take unpopular steps to deal with the global financial torm and so quote in the store it is i will not all no longer be private it's

a big you think you're going to take out a popular stance what does he mean by this i think i think you mean something that . has mentioned many times. you just called it americans living beyond their means to nationals on paper or to 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 low price comes down russia suddenly will face the allahabad crash has been living beyond its means and for example pension system is not balanced sort over the next but a next. in years or so russian you completely redesign inspection system and somehow bring its house in order but because what we are doing now is sustainable at one hundred twenty or one hundred forty dollars hope i'll buy that will long be sustainable if oil prices a eighty or so even sixty dollars

a bottle so. through all of the new economic school the spotlight surely will continue about the possible to the problems that all our plans to say would. move. just so.

that's.

walking back to the spotlight on a mild novel just a reminder that my guest in the studio today is siggy good evening actor of the new economy school mr good review 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 a barrel and we said well we had 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 cord in the finance minister the government put in video of what is

a just to get to reasons i think i think i think could be personally responsible eventually is of course the new report him bassists his government his policy and i think even if you don't purpose absolutely i think i think first it was a reaction to the crisis but ben. clearly understands that his political support is beast on the ability of people to raise material standards and even standards of russian population and if you look he spends more and more and you mentioned seven hundred people that said well if we compare it to disappear into your two thousand and eight and one brother scallops and their prices i would remind you that before that year of say year two thousand and seven the russian budget would be a balance of fifty five dollars i don't know the times when the oil price was. ten was awful but i remember times when we said thirty thirty's we're thirty one we're also right exactly and this is growth in just five four years for. fifty five to one twenty five shows the level of spend in fashion the army has to throw into the

economy of government companies to releasing spendings pressures and reasons why in spending when we were looking creating the mood for budget we are increasing we are in what is in military budget already. said we shouldn't. we shouldn't even will it increase in that we will increase even more we will and this is why mr putin is not is not happy about this policy we will spend on infrastructural pensions. by almost a factor of one and a half we. spending on the police and there there are all all avenues of spain is actually spending more and more and more and part of their days because i think the call on the call more the russian government is to sustain the popularity for all more spending while. the finance minister the former finance minister he was labeled to be

a liberal he characterized the liberal the liberal wing of the russian policymakers russian government. was is financial policy really liberal and are we facing the end of the liberal finance prophesying bush policy would be rather as conservative sponsible 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 price that's fine to keep your seat or the rain in the wind and price goes up and in that sense he did his job give his job especially will say five years ago all through the crisis spending manpower after the crisis spending did not go down well when the then why does everybody call it a liberal because he was very vocal about this he was very critical of his stance and he eventually. which actually showed that he didn't like what was happening i

think believe it or call this issue done by somebody else and president reagan gave the speech in st petersburg in june which would be called a liberal speech where president said state capitalism is not my approach my approach a spirit is asian if you deletion in proven investment climate decentralization of economic and political decisions there will be a liberal in a liberal more senior military budget of which president may do this poll the other day backed up some would have solved oh not only are we increasing how we increasing the exhibit we're 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 and we include could be used by big government and he seemed pleased that a good wish and so on and that sense unfortunately we have not seen the new economic policy board will be different we can have been talking about someone with a good team that did the money for more of their it's a good question it's

a good question russia can borrow a lot but i think if oil price goes down and therefore happened because of a global recession and that's the situation of the oil for capped n.l. cloth that will exactly there will be to see russia will or will not be able to borrow a lot simply because the investors will not like the indian pull 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 call the guns versus butter you do have is it true is it what brushes facing to the guns or voter that's a good question i think i think we've gone through the normal rushing us a lot of guns because i think norway the. and there are sober mind would see their . space in the threat from nader but that's another issue i think one issue

here is we need to leave within our means and your correspondent even the worst work in the world to us and even beyond their means being financed by standard and poor's the red and green and also the markets think russia so they also understand that there is a difference though between the us and russia yes it has a more than two hundred scientists of service in government they're flexible market economy developed financial system sort of the live beyond their means it's not a disaster russia doesn't have a currency like gold there and saw if russia runs out of cash we've seen that happen in the end of the eight years russian think they've been done and. we've seen the benefits of the soviet union twenty years ago we've seen them get called in russian and in many there me it actually happened in russia if if if russia rounds out of cash there may actually have a serious economic and political implications will russia have to go and he said

russia can grow russia a lot so i know a lot of specialists are watching the channel today need to do right now would be should they expect this country would be boring as long as it's not even it is a global recession or even if it just oil prices goes down substantial and russia will have to borrow and in principle that our ship has a bit a lot of debt burden compared to european or a new european country sort of the united states or japan a year. it's going to be released here so i think russia will be able to borrow just a little bit and that means that the lot of this guns spent a lot of military spending will have to be cut and i think this is exactly minister that it's warning. to president very different prime minister 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 in military spending when done with factor of ten or so on

simply because soviet union i'm going to run out of cash to pay for these guns or rockets are about and that me will happen in russian. president medvedev said that he will continue to work on his more than a vicious modernization project even if when he when he is no longer becomes prime minister i'll be i'll continue the modernization project the modernization projects are aimed as they say into the future but they cost a lot today. are very significant spending in the in the russian budget how they could comparable to the military budget to put the pension and so on of course not the. president of any of slavery projects like scald government other related projects there are not of the smaller actually order of magnitude smaller than the military problem and it sounds horrid french and pension spending the syrup and polluted different things this is where they will be saving money you know and they

will not be able to save a lot of money. in this project so i think i think most of the having a source will be privy to zeeshan and i think russian government will have to sell its crown jewels and it is very unfortunate there are russian government has not done and before been stock prices and oil prices were high unfortunately as it is very unlikely that russian government will sell the government seeks in ross near treaty because better bond. just from when the oil prices law and therefore the market will not be there for this essence but the russian government will capital. june the last twelve months since the autumn of going to russia has been experiencing a capital flight announcing to about five percent of the g.d.p. what are the fundamental reasons for for the health care for work well i know you're probably mentioned there people would not like to invest in this country but

why why do russian capitalists move their room money away and that's a very good question and i think it is especially striking given that the outside world is not doing very well and given the huge are preparing just for investment in russia they found that investment is actually there are an investor themselves going to invest in russia big or mining i'll design other guys who know how to do business in because they were only in the land will truly know how how everything moves here compared to europe you know the reason we just mentioned europe and travel years and travel and year production investors big money out why big probably because investment climate is not a great corruption is high but legal and he says hi and he's got his critics high and we don't know all what the economic policy of the new government will be the screws on this for the understand the best the russian careful this can do whatever action is moving so you guys are going to march when they move their money away to the west they only have this serving them and they're not making a lot of money that they're making their money here in their own country they're

just sitting so so these as your as you are becoming like a savings bank for the russian oligarchs not not not necessarily and there is some problems actually surprised us in europe a lot you can buy you can buy stock in europe for a fraction of what what used to be an investor. is there even before the market economics affiliation is so bad i think when we're talking about investment all floyd 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 appropriation are issues not in the subset of most worried about thank you thank you very much just to remind that my guest on the show today was so good we read through all the new economic school spotlights what life would be back with more friends than common sound was going on in and outside russia until then stay on our sea to take it.

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