if you just joined us for a while come this is r.t. live here in moscow top stories now at half past the hour syrian activists report more crackdowns as the total death toll in the conflict now stands at more than three thousand the opposition says it's been joined by defectors but the government dismisses the claim saying the fight isn't just the gangs. and she called for protesters clashed with police in new york as they march to wall street at least fourteen people have been arrested as the occupy movement looks set to go global. and the european central bank says it's now well enough and it's time for

governments to take the lead in saving the region's economies spain's credit score is slashed. or news more developments in less than half an hour from now in the meantime piece of event and discuss the predicted death of the eurozone. crosstalk . wealthy british style. markets by now scandal. find out what's really happening to the global economy because the reports on our t.v. . can. still.

welcome the cross-talk i'm peter lavelle the euro crisis it is a high noon moment for a eurozone looking to stave off another recession while juggling indebted sovereigns flimsy banks and the specter of economic crisis in the mediterranean this has many seeing the worst does this currency have a future. you can. still. get cross-talk hero jitters i'm joined by john gaunt in london he is chief executive of vote u.k. out of e.u. also in london we have andrew louis co he is director in principle of europe economics and in dublin we go to jeff madrick he is senior fellow at the roosevelt institute and author of age of greed the triumph of finance in the decline of america one nine hundred seventy s. to the present hi gentlemen this is crossfire going you can jump in anytime you want and i very much encourage it but first tell us about this ongoing almost endless crisis quite a few meetings but not much progress the global economy is emerging from one of the roughest squares yet with intense market volatility fueled by the fear that

policymakers cannot contain the spreading crisis and make this more of remains mired in the songs at best due to the absence of political will power to avert euro zone's and disintegration this is the most serious financial crisis we've seen at least since the one nine hundred thirty. if not ever having to deal with very unusual circumstances devising a rescue plan that would pull the monetary union out of a meltdown has so far been met with gridlock and resulted in political stalemate among the governments of europe venue for unanimity has significantly slowed the process with countries that odds over the need to recapitalize the banks and the source of the funds to make it happen germany is ready to recapitalize the banks and we need unitary criteria we are under the pressure of time and we need to take a decision quickly but so far germany and france have been unable to find common ground over how to recapitalize with a letter insisting on the use of the four hundred forty billion here

a european financial stability facility and recently opposition from arguably less prominent players like finland and slovakia has threatened to throw any progress made on the issue into reverse all this has time and again highlighted the key issue behind the squabbles in my personal view we need to make significant progress towards political unity within the executive branch and of parliament where the u.s. leader is now saying that here is our own risk as the biggest single impediment to an economic rebound the alarm bells will ring louder until the plan is unveiled and the upcoming weeks after kicking the can down the road for nearly two years the next could blow up in the face of the global financial system perhaps we'll see more in the upcoming days thank you very much for that russia i think you are andrew first in london here we had sort of causey and merkel meeting not too many not too long ago and they said they're going to come up with a solution by the end of this month there was a solution can they possibly come up with after been talking about it for two years

watching this. currency crisis just continue to spiral out of control. well one of the problems we have here is that almost every solution proposed over the past few months has been a variant of the same basic theme which is that somehow germany should become responsible for all of the debts of the eurozone and in particular they should become responsible for the debts of its early and portugal and greece and other countries within the euro zone now that just seems to me to be a silly idea a nonstarter i don't see any reason why the german should feel that they should have responsibility particularly for italian debts that were accumulated from long before the euro even existed all of the schemes are opposed to variants on this theme so the idea of having a huge stability fund of two trillion euros or leveraging the existing much smaller funds up to two trillion or maybe printing loads and loads of new money your robot saw all of those four kinds of ideas are variants of the same that sharing themes

so they're a nonstarter the way that you should be going here is first of all to be seeking to address some of the fundamental problems in the euro zone banking sector by imposing losses on the lenders for the banks the people who lent money to the nightstick and in spain and in ireland and then dealing with the problems in portugal and italy by having a system of transfers every time an extension of an existing system called the e.u. structural funds which would allow you to send money off each year just to raise the growth rates of those countries a little bit and finally accepting that greece really doesn't have a future in the euro zone so greece needs to be out i mean cyprus leaves you bring up a very good point here and if i go to john here i mean the whole world except for a few leaders in the e.u. in some greek politicians have a long ago agreed the greece will default on its debts and we still can kicking the can down the road here i mean why isn't it why is it we just they just take a huge haircut and just move on ok because after two years of watching this

continue down the road everyone just has to pay more and more in more go ahead. well it's like the emperor's new clothes new clothes isn't it someone's going to shout out the emperor is naked somebody is going to shout out greece is already in default it is absolute nonsense as you say that they continue to kick the can down the road greece is bust it's time for greece to leave the euro zone's time for greece to be able to take back the track and devalue itself will they you know can use a cliche go on holiday there again and help them rebuild their economy but i mean as you say every man cat dog and woman knows full well that greece is already finished greece has got to go but we're ready to fork and haven't they in effect why our leaders return resistors i have to just don't grow some and realize that in my case and let's just get on and move on sorry jeff in london dublin you want to jump in there you know. i'm always stunned by the utter insensitivity of these

kinds of comments just let them goes if we're not talking about real people as if we didn't set up a situation in which it was a very easy for greece to borrow it in which we did not set up a situation in which germany indeed benefited from that the anger on the part of your two guests that's quite is quite sharp and stunning to me and the lack of a sense of obligation to greece which indeed i was absolutely made and these me here are saying obviously and i set off that i would kill myself to hold on a second he wasn't agreed by the british people who went into this it was certain guilty man who took us into this folly we stand outside the euro zone anyway because we're not got the euro but let's let's understand this this pain here in the u.k. as well we're not responsible for creation's problems that mature well i don't know so. i'm never really like you serious human and you have oh it's whether we want to

show you here i you know you'll hear you're barely any it soon decided to try greece's economy to the economy of germany there. man not the ordinary citizens of all great country all right jeff you want to retire nobody i hate is just the fact is sir yeah and i'm not going to use that kind of the kind of language this man uses i mean he's entitled to say whatever he likes on whatever channel they life's i'd like to have a somewhat more civilized discussion out of a country such as civilized i assume as britain i'm not a big fan of britain's current austerity economic side either but the idea that you can talk with such. such insensitivity about a nation and its people just stuns me the idea that your if you were would you do that pulling in more money. and i just as jeff he's been issued what. i would like to hear ma i'd love your moderator to i'm trying to mr go ahead jeff

the idea that you can talk yeah yeah i hear the idea that you can talk in these terms and with no sense of moral obligation and with no memory no historical memory of the difficult periods especially after world war two and rich you're of found itself and so little historical memory about the value of the common market and the idea of throwing nations out when trying when things get rough is it difficult to save greece yeah you bet it's difficult to save greece and maintain it in the eurozone can greece take a substantial haircut yeah i can do do we need a substantial maybe even fifty percent haircut yeah can greece develop have a primary surplus next year the numbers suggest they can of course the debt load is very big and has to be cut. radically but the idea of saying that they're going to cut their currency by fifty percent were two thirds and somehow they'll just bounce

back because you guys are going to go visit them and spend money there is just. it's hard for a nice guy and i'm generally very soon. i go usually a very sensitive i miss kind but i do kind of anger and i do it and you on this i mean there's these there's the moral hazard issue here i mean nobody wants to see the greek people suffer i mean i think we'd all agree on that there but there is the moral hazard issue of you continue to throw money into greece to try to save an economy that most people leave is already bankrupt then you have the other pigs lining up and say will do the same for us i'm not trying to be insensitive fair to say does the system work or not you are so naive as you go ahead and jump in let me just add and i do if you haven't said much of the program go ahead. yes it's not it's not the germans the germans didn't force the greeks to borrow money so the greeks chose to produce these monies themselves and it's turned out they were unable to pay and of course there were french and german and other banks have lent money to greece and they'd be the participants that would actually lose out when

the greeks defaulted i'm not suggesting that actually the greeks were particularly benefit by default and i just think it's inevitable that they will do so that they will default and they will accept from the euro at this stage i think things have gone beyond the point of helping them if the if the euro zone or thora ts has made more sensible decisions a couple of years ago i think it would have been possible to have a haircut for the greeks and then for the rest of the eurozone to have lent the money to keep them in the euro i just think that that's not really a possibility anymore and i think it's also important to understand what the difficulty is on coming up with some alternative solutions at this stage because you have to appreciate two things first is that the euro zone or thirty's are terrified of the possibility of an unraveling of the whole euro zone project because if you go back to one nine hundred ninety two and then there were you have found that there was an thing called the exchange rate mechanism a kind of fixed exchange rates regime in europe and as countries gradually started to drop out so the italians dropouts and the british and others eventually the whole thing came to bits so that even countries like france in the end which had

been thought to be absolutely core and inviolable members in the end came under pressure and they fear that you'd find the whole euro zone unraveled if you started to let people leave the other thing about this is that the reason why they didn't have a greek default back in twenty nine was because really most of the sovereign debt bailouts were just banking sector perhaps by another name and so once they start accepting that you get a default by the greeks and then you'll get a cascade of losses of various banks around europe we've already had some banks go bust earlier this week for example quite a large banking in belgium called dexia which has actually foreign currency foreign currency obligations much larger even than the state of greece so. this is all you will highlight your speech on here we are going to a short break and after that charlie's will continue our discussion on the heroes stay with arctic. mum. mum. mum.

mum. more news today violence is once again flared up. these are the images the world has been seeing from the streets of canada. trying to corporations are relieved a. mum. a very warm welcome to you this is your news today protesters on the. street they have. been since

a good chance to begin with the status of the human experiment gives. weeks you'll see this rap music would expose the trial local economy and its arcane flames as finance attempts. to maintain confidence in markets and. wants to be seems way to balance its risks to be nice and close to collapsing it's like a loan for close. to fail so we played the game feel like there's a us crash. team is like ultimate cause in athens greece the i. mean i'm just programs increase the total economy. keep the story. the same.

welcome back to crossfire people about to remind you we're talking about the possible death of a currency. can. start. ok about to go back to jeff in dublin there's a lot of talk about the european financial stability facility and possibly pumping it up to two to three trillion euros now what is the logic of going into so much debt to pay off debt i mean at what point does it become vile because and also can i ask the same can i can ask the same question about austerity i mean how can our stary bring prosperity go ahead. yeah well i agree that austerity in the in the cases of the countries for the most part with one or two exceptions who are following that are is not going to bring prosperity but debt following debt has a long standing idea i mean you've got guys like padgett of the economist you've got our charles can goldberger who are probably the best history of busts you've

got a you can interpret cannes in minsky this way always they say when things begin to unravel there comes a point where you have to say you have to throw get overwhelming force to stop the bleeding now what's happened in europe and i think your two of the two other gentlemen agree with this is they just drag this on and on for structural reasons for. you to use structural reasons but also because they just didn't want to face the facts and also i think it was alexander who said the private lenders have to take a hit well they've been trying to avoid that obviously in france and other places they have not gotten their private lenders to take a hit now we face this in the u.s. as you all know under the bush administration with paulson and geithner and so forth and we had our tarp we had our f.d.i.c guaranteeing all kinds of debt we had our federal reserve dramatically expanding its balance sheet now that stopped the

crisis i don't think it was implemented and all that well because it did not get the banks lending again it did not change management it did not and serious conflicts of interest we have in america but there you have a pretty darn good example of some people who i don't always admire coming together and i think people forget it's so easy to forget history what a risky step they took and how many people like you just now ask how are we going to solve this problem by throwing debt after debt and in fact they did they did solve the problem well i mean i why he would say the problem isn't solved at all. always a very courageous case actually a hot political potato and on the debt ceiling k. jennifer thank you if i like let me finish as well no i'm sorry if i go to john in london i mean i agree i agree with jeff in principle i mean it's keynesian economics ok but i mean who pays for u.s. debt if it goes back to what we were saying earlier in the program i mean why

should germans have to pay for the mistakes of the greeks i think that's what a lot of people are asking that have joined our our american friend in dublin was talking about the united states of america hand how they try to solve their country's problem now i agree the paycheck they haven't really solved outside because of that the present problems that the states are suffering but that was one country we never asked to be in the united states of europe or here in britain or the united kingdom what's the euro zone crisis got to do with this but we're still bailing out these paid countries and then when you look at germany for example why should germany be playing god grace you know grew in greece first joint you know did they tell the whole truth about their balance sheet twenty percent and i just get it to either stay here you where you could ask that same question and he has what was really a spanish lawyer honestly like a force to these nations ok germany's economy has been affected enormously by its exports to these nations can i just finish this point apparently you gentlemen

don't understand american has for history very well we have had time and again conflicts in trying to unite this country going way back maybe the history precedes you both the fact is that there are quiet because you are you you have to you know this is still here listen i'm in a trust they tried to ask the store unions and their forests and you know union three hundred euros i do know my history is not as easy to stop to stop to stop the crisis at that moment but they didn't proceed as i said if you would listen to me but they didn't proceed well enough along that they didn't adopt adequate keynesian stimulus that. the issue but they did succeed in stanching their crisis at that moment give them credit for that ok now we're going to now i'm beginning to understand the problem that you're in greens you know we're going to hear injury and. if you're going and you have the floor go ahead it's not it's not keynesian economics for the germans it's not keynesian economics for the germans to take on

italian debts i think i think we need to get this discussion beyond greece because reality is that greece is going to i mean greece is already agreed it felt great greece is going to have a full scale assault within within weeks certainly by march so that that's not even the issue anymore the issue that markets are interested in is how this is how and whether they're going to keep italy in the euro whether they're going to keep the whole euro together and so big the greek thing needs to be off the table so the real issue here is how do you get enough growth in italy for italy itself to service you sound debts or if you can't do that do you have to have the germans take on the italian debts or have the italians default i think it's just a ridiculous idea that germany should accept trillions of years of debts that arose before the euro zone even existed and that's nothing to do with keynesian economics that's like some other country taking on somebody else entirely taking on responsibility for their bets the way of getting back growth within its early is of course partly to do with structural reforms and so on it's also though i think

there have to be some transfers some monies will have to be sent from germany to the european union and the european union will then spend those monies in italy italy's fundamental situation isn't that bad it's not that heavily indebted country in the aggregate it has a bit of government debt obviously but in fact even by the middle of the trying to ten's even italian government that is projected to be lower than that in the united states so the united states situation is in many ways actually worse than that of italy because the united states not only has quite high government debt but it has enormous levels of household interactiveness and the americans haven't in any way address their problem through to top it all that they did was that they retarded the moments of having to make a decision about these things. what you do when you when the government seems to mean in these ways is at best they puts off the problem until later out worse they go the way of ireland and they find that the government then takes on so much that itself that the government goes broke and the reality for a number of countries within the within the european union is that they face that danger with in your opinion perhaps the most egregious examples are spain and

ireland i mean i think kingdom places like belgium and some immune from the u.k. as well so we what we need to have is a solution to the banking sector crisis on the one side and deals with the gross growth and competitiveness saying it's early and you i think what you're getting at here we're getting at here is actually finding a solution and not something to start here jeff if i go to you what are some of the structural issues they need to address if they really want to fix this currency because if you don't have a fiscal side in the monetary side you know we've seen what's happened ok you know i'm missing my here isn't really going down entirely due. i don't entirely disagree with alexander i am a little taken aback however by this idea that it's not so now it's not fair to germany to take over we're not talking about fairness and we're trying to stop a major crisis where's try and we're talking about practicality we're talking about what has to be done even at a cost but let me let me say something about the american economy because because

i'm a little disturbed by that this idea that somehow you'll get america has to cut its debt and therefore it will solve its problems the obama administration did expect to grow faster and debt did not was not going to rise at this level according to their forecasts they got it wrong what are they trying to do now well keep in mind we have a lot of taxing ability in america as you guys well know we're almost the lowest tax country and the world if we get the economy back on track we can begin to raise taxes and cover that in fact you may not know this but the obama plan which i don't like because it was mostly tax saving cut government cuts and not revenue increases down the road but it will get that down to the level around the level is stabilized at around the level of seventy to seventy five percent two thousand and thirty two thousand and twenty five that's when we have begin to have big health care problems and believe me a lot of us are talking about that so this is casting americans in the same light

as these other problems is pretty wacky on the other hand i do agree with alexander's analysis of italy he is talking about a united fiscal policy in the u.a.e. e.u. which i do believe is necessary the idea of throwing greece to the dogs i find i frankly find it pretty of not just going to let it flow for major haircut one way or the other people are going to take a loss john if i go to you if we want to talk about having a greater fiscal cycle to you the euro the euro then you're going to have a lot more political control centralized with someone in brussels in frankfurt in some place because that control spending and spending has a political price tag attached to it go ahead. well well of course but that control isn't actually going to be in brussels it's going to be front for because the germans are going to be paying for it it's a bit like when island were bailed out normally when one goes into the election and you go into the booth it's the old story it's the economy stupid well if you and

your country and your own politicians are actually controlling your economy what is the point in voting it actually did huge people their democratic rights and actually that's the way we're heading isn't it because the germans will dominate this because they are the ones who are going to bail out because they're the ones who haven't had this rapid expansion and reliance on credit the rest of the euro zone nations and tribes and that's where it comes to play and it's all right for our friend in dublin to talk about the united states but look at the level of debt mess let's look at the fact that they could well default themselves will say look there might have been just a few weeks ago so we can retake lessons from them but they are saying nicely states over models here we are not there you know we're actually like you're on your own we're in your usual fuzzy lady and we went in corralling i wanted to hear i want to hear it for the last word on this program go ahead ender. i think there's any all the distinction in the world between an arrangement in which either the germans accept that they have responsibility for italian debts and then the

italians get to spend as they like or the tally the germans lend money to the town and then tally italians what they have to lend to either of those arrangements is a nonstarter the only way that this can work is if the germans send money to europe and europe then collectively on the parts of the eurozone which is going to have to be its own country will then spend money in italy and other places so it's not a matter of germany dominating anything it's a matter of a new country called euro coming into existence ok. general you want to worry with that but the responsibility will be yeah i generally agree with that but let's remember that the responsibility will be germany's as the strongman of the morrow and we've all the time years if you very much gentlemen a lot more is going to share it many thanks to my guest today in london and in dublin thanks to our viewers for watching us here r.t. see you next time and remember rostock proves. you. still. want.