r t america you can also follow me on twitter at razzie thanks for watching i'm christine from. the issues that so much of me is going to be a lot of people carrying the burden of biro prices is a high new momentum for a euro zone looking for to stave off another recession called juggling indebted sovereign splined.

liberals. renewed the latest in science and technology from the rush of. the future coverage. download the official location the phone the ipod touch from the choose up still. life on the go. video on demand cheese minefield costs and r.s.s. feeds now in the palm of your. question on the calm. sea a story seems so sleek you think you understand it and then a glimpse something else you hear sees some other part of it and realize that everything is all you don't know i'm sorry welcome to the big picture.

the. good. luck. the. led mission is the secret intake should free the store charges free. range funds three. three still free. the old free blanquita cullum video for your media projects and free media. tom. slade. a. pledge. to cut. welcome to cross talk i'm peter all about the

euro crisis it is a high noon moment for a euro zone looking to stave off another recession while juggling indebted sovereigns flimsy banks and the specter of economic crisis in the mediterranean this is me seeing the worst this is currency can have a future. cross-talk year old 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 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 all right gentlemen this is crossfire then you can jump in anytime you want and i very much encourage it but first tell us about this ongoing almost endless crisis in 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 that this europe 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 that i think that is if not ever having to deal with very unusual circumstances to present a rescue plan that would pull the monetary union at of the 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 rig capital. i with

a lot are insisting on the use of the four hundred forty billion hero 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 you're what we need to make significant progress towards people unity within the executive branch and to call the moment with us leaders now saying they're here as i would risk as the biggest single impediment to an economic rebound the alarm bells will ring louder until the plan is on bail and the upcoming weeks after kicking the can down the road for nearly two years the next could go 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 and i to go to andrew first in london here we had sort of cozying merkel meeting not to meet not too long ago and they said they're going to come up with a solution by the end of this month here what solution can they possibly come up

with after i've been talking about it for two years watching this. currency crisis just continue to spiral out of control. one of the problems we have here is that almost every solution proposed over the past few months has been a variance 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 closed at variance 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 obama or all of those four kinds of ideas are variants of the same debt sharing theme so

they are 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 for people who lent money to the banks people in spain and in ireland and then dealing with the problems in portugal and italy by having a system of transfers over 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 in cyprus league so 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. and 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 in mail or 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 and it's time for greece to leave the euro zone it's time for greece to be able to take back the track and devalue itself will then 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 and dog and woman knows full well that greece is already finished greece has got to go but already before it could have been they in effect why are leaders because i have to just don't grow some and realize that in my case and let's just get on and move on right jeff in london you are juggling you want to

jump in there you know. i'm always stunned by the utter insensitivity of these kinds of comments just let them go as 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 me here are saying obvious and i'll shut off yourself and i will kill myself to hold on a second he wasn't agreed the british people who went into this it was certainly guilty men 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 and mature you know well i

know so i know i'm married eleonora is asian and you have always whether we wanted to show you how you relate to the idiots who decided to try greece's economy to the economy of germany there. the guilty man nor do i know citizens of all great country all right jeff you want to reply in the very 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 a light side like to have a somewhat more civilized discussion out of it countries as civilized i assume as britain i'm not a big fan of britain's current hysterically economic side there but the idea that you can talk with such. such insensitivity about a nation and its people just stuns me the idea that you're a jew would you do that pulling in more money. should not just as jeff policeman issue what is usually hazanavicius by i would like to hear my i'd love your

moderator to i'm trying to master 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 and no historical memory of the difficult periods especially after world war two and which 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 ok 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. out 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 as hard for nice to have them generally appreciative. oh you initiate your sense of diminishing kind but i do kind of anger and i did andrew on this i mean there's there's the moral hazard issue here i mean nobody wants to see the greek people suffer i mean i think we 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 that's able to do the same for us and i'm not trying to be insensitive fair to say you does the system work or not you're it and i guess you go ahead and jump in and let me just get it and do it you haven't said much in 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 borrow these 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 decrease would particularly benefit by default and i just think it's inevitable that they will do so or they will default and they will exit from the euro at this stage i think things have gone beyond the point in helping them if the if the euro zone or thora t. says make 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 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 forty'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 a 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 dropped out and the british and others eventually the

whole thing came to it 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 they fear that you would find that 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 center balance by another name and so once they start accepting that you get a default by the greeks and then you'll get a pass kate of losses or various banks around europe we've already had some banks have passed earlier this week for example quite a large banking in belgium called dexia which has actually a foreign currency a foreign currency obligation much larger even than the state of greece so. this is all you would write your message on here you know a short break and after that charles will continue our discussion on the euro stay with r.t. . if you. want

. the longest big game hunting history. he was trying to stall and. what sprung the traps they laid for him. on the radio we have the surge blogs around the. always from the always missing the book one shot turns to. the global drug industry's godfather became the most want to trophy the world's county hunters. and parties. you know sometimes you see a story and it seems so you think you understand it and then you glimpse something

else and you hear or see some other part of it and realize that everything is art you don't know i'm tom harpur welcome to the big picture. mission free cretaceous free in-store charges free. range humans free. three stooges free. the old free blog just plug in video for your media projects a free mediocre job to our teeth dot com. you can if. you want to. welcome back to cross talk on people of true mind you were

talking about the possible death of a currency. ok i 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 what is the logic of going into so much debt to pay off debts i mean at what point does it become viable because it also can ask the same can i can ask the same question about austerity i mean how can our stared 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 we're following it is not going to bring prosperity but debt following debt is a long standing idea i mean you've got guys like baji of the economist you've got our charles condoled berger who wrote probably the best history of bust you've got

a you can interpret keynes 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 debt overwhelming force to stop the bleeding now what's happened in europe and i think 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 when they've been trying to avoid that obviously in france and other places they have not gotten their private lenders to take it 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.b.i. see 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 will lot of people are saying the problem isn't solved at all. oh it is a very big case actually a hot political potato and on the patsy ok you look like you know sure if i can let me finish this one i'm sorry if i go to john in london i mean i guess i agree with jeff in principle i mean it's caves in economics ok but i mean who pays for this credit 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 you and point out are american friend in dublin who is talking about the united states of america hand how they try to solve their country's problem now i agree the peter they haven't really solved have that 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 i mean 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 bailing out greece you know grew in greece first joined you know did they tell the whole truth about their balance sheets and i just get it i like the statement in here and here you where you could ask that same question and he has what was your earliest fantasy world are literally like a forest to these nations ok germans are caught in a union offended enormously by x. 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 quite patrician were you you have. this is still he listen imagine a tryst they tried to ask a story in europe in one hour photo studio union almost three hundred euros i do know my history is moderately 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 that they didn't proceed well enough along that they didn't adopt adequate keynesian stimulus that. the issue but they did succeed in starting their crisis at that moment give them credit for that ok all right now you know anderson i wonder if anyone understands the problem if you're an. engineer. 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 the reality is that greece going to greece is already agreed to default great greece is going to have a full scale at fault within within weeks certainly by march so 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 do the greek thing needs to be off the table so that the real issue here is how do you get enough growth in italy for italy itself to save its own 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 euros of debts that arose before the euro zone even existed and that's now going through a keynesian economics that's like some other country taking on somebody else entirely take on responsibility for their beds and the way of getting back growth within italy 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 aggregate it has a bit of government debt obviously but in fact even by the middle of the twenty ten's even italian government debt is projected to be lower than that in the united states so the united states' situation is in many ways actually worse than that it's because the united states not only has quite high government debt but it has enormous levels of household interactiveness and the americans have been in any way address that problem through to top it all that they did was that they were tardy in the moments of having to make a decision about these things. what you do when you when the governments intervene in these ways is at best they put 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 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 but places like belgium aren't immune from this case as well so we know what we need to have is a situation of yours with the banking sector crisis on the one side deals with the gross growth and competitiveness i think it's really enjoys anyway you're getting here we're getting here is actually finding a solution 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 and you know i miss my irresponsibility going on entirely due. i don't entirely disagree with alexander i am a little taken aback however by this idea that it's not so man 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 crime 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 me about 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 in the world if we get the economy back on track we can begin to raise taxes and cover that and 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 not revenue increases down the road but it will get that down to the level around the level is stabilized and 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 pretty of doctors going to let it fall for a major haircut one way or the other people are going to take a loss john if i can go to you if we want to talk about having a greater fiscal side to the you but the euro well 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 frank for because the germans are going to be paying for it's a bit like when island were bailed out normally when one goes into an election and you go into the booth it's the old story it's the economy stupid well if you're in 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 now 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 eurozone nations of 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 betterness let's look at the fact that they could well default themselves will certainly look at them i've been just a few weeks ago so we can retake lessons from them but they obviously. state so the models are late here we are not there you know actually like you're on your own when you're usual for st louis and we went in for halloween i want to show you here i want to return to the last word in this program go ahead under. i think there's any old distinction in the world between an arrangement in which either the germans accept that they have responsibility for what italian that's and then the italians got to spend as they like or the tally the germans lend money to the talents and

then tally italians what they have to sell and 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 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 europe coming into existence ok. general you have what you want to carry 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 minor and we've all of the time you're very very much gentlemen a lot more is going to hear 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 room. and. started. to think you want to.

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