five thirty pm on tuesday here in moscow you without t.v. had a summary of the headlines now ok daffy may be laid to rest but the controversy surrounding him lives on amid speculation he could have taken a troop of potentially damaging secrets to his unmarked there's a great. georgian billionaire and critic of the current president is stripped of citizenship and threatened with expulsion from the country but all of this off it simply announcing plans to run for the gun. by wall street movement are ready for yet another round of worldwide protests to mark the g twenty summit and calls for governments to crack down on the global casino of currency trading. now could be unscrupulous traders on wall street have initiated the european crisis to weaken the right currency now we ask the head of the think tank created specially to help overcome the global financial discussion on spotlight it's not.

hello again or welcome to squad like the unfinished on our state crime algernon enclave our guest in the studio is it was all sort of there long present. days europe is torn apart by a great financial turmoil this iteration is getting worse every day as greece is trying hard to firm its huge public that by cutting social spending leading to strike some demonstrations and attitudes spain's rating has been downgraded and the forecast for france is also custom missed the euro zone's healthier economies are pressed to prop up their weaker neighbors some people start saying the wall street

sharks initiated the crisis to weaken the rival european currency so will the most time billion bailout loan save european economies and do all strains relief to wall street we're asking the head of the europeans to choose our financial regulation which is the think tank created especially to help overcome the global crisis. economists say need rippin countries such as greece portugal and spain have been overspending for decades as a result governments have to borrow more to pay their existing debts and the new loans become more expensive the spiral is hard to stop and if one of the participants defaults it may trigger and domino effect during those strong european nations created an almost five hundred billion euro bailout on their help out their partners but experts say about two trillion euros needed to avoid the worst case

scenario. thank you very much for being with us first of all we'll be talking about european affairs and the european parliament and the e.u. . states have finally reached a compromise on a set of rules which as we read. restrict practices. exaggerating financial crisis but i hear the hedge funds industry they immediately came out against the new rules saying i quote they increased government borrowing costs and reduced real economy investment so which side are you in this new culture that. my organization the european institute of financial regulation is part of a bigger organization which is your place which is the financial center of parries and this financial center of power is try to be the link between the financial

industry and the users of finance and being investors cooperate in the issuers and in this capacity of usually we are following a very. strongly what's happening in this. craze is that started in the u.s. in two thousand and seven and it's clear that is the interests of all our members and all the french citizens and all the european citizen to find an answer to this critical situation it's clear that we are living in historical time. and this time it is not just a question of technical issues around finance. this time is more about responsibility rests upon civility in leadership of. the political authorities of the world so what the responsibility of the financial institutions but the responsibility of politicians in

a way. because two reasons first this. craze is triggered in two thousand and seven with a surprise and the subprime of she was obviously the result of some had uses of the banks but is also the result of a political will to develop. ownership in the us and try to finance that by three key processes that has been many ages but i did central bank and they had not been able to discover and balances created by this specific situation that didn't trigger a lack of trust in all the systems now we are second phase of the same creating this and because of this first phase government governance had to. put

a lot of capital in the industry and increase the deficit but those if is it or not you they were already there and now they are and sustainable then what the market are testing today is not just the fact that greek the greece is a problem because we all know that greece is a problem because of their internal economical governance but where they are more testing is there have been eighty of the political authorities to manage the end balances and that's the test today and specially in europe in europe it's clear that we created a fantastic tool which is the europe. and. the the logic would have been to create the conditions so of a. single currency before launching the single currency the conditions are how to manage collectively our economies how to manage our budget how to manage

the logic of fiscal construction and how to manage the gaps in the company between countries it's clear that result is management in the last ten years the gap increased between germany france and greece well you're talking about living in a historic time of increasing responsibility work the governments are different countries are the mark receives at least one ways there's supposed to to be responsible because they are elected but if we look at the occupy wall street movement in the united states the problem that people are facing now is that they understand that actually the decisions that matter are made by financial bodies this is army not in the why i was when i was three and they are irresponsible so people want responsibility for financial institutions is the time to talk about

this. some decision and make it right i did not get the market i'm guessing the market are making a rule the rule is how to manage risk when there is risk to get out and when there is profits potential profit they will get in. today what the market is telling us the market is telling us that the world has insisted and sustainable and balance we can assume specially in europe with sovereign debts but in also in the us where this mechanism is working yet the word is not getting along and is detecting denying that there is a problem. and then you have to solve the problem and today the problem is not just the prudential problem at the bank level that was the case at the first phase of the crisis after the subprime that has been more or less solved through the g

twenty zero initiative. by the way the g twenty initiative had been triggered by. our president sarkozy who today is the chairman of the g. twenty and i really think that if you twenty make a big job it's not visible but in fact there's a lot of discussion to convert but now the situation is clear is that the market is testing the capacity of political authorities to take the right decision and in europe we have a problem of governance i told you we created a currency but we don't have the right we can isn't to manage its currency all this and greece is is trying to greece possible it is implementing dress thing a ceratin. the filthy measures to to to. the big discontent of its own people do you believe in the efficiency of these measures that today are taken by the greek government to face this grazes you have gotten up initiatives and top

down you should see the bottom of the ship here is that each of the european countries has to take courage is decision starting by greece where the situation taxation situation is critical then you have to take a very critical decision and. they are in a process to do it and in a way they are forced to do it because we don't believe that greece can get out of europe that will be very general so you don't believe that greece can get out of your a bed when i read the papers of financial papers i get the impression that greece will overcome the crisis and also get an impression that greece is in the center of a crisis if not the result of a crisis and once greece becomes greater the problems will be solved is a true it's not just true because greece is. revealed it's an indicator it's an indicator of the reason is not the reason indicator that because

of the lack of the right governance we let's some countries like greece and even puerto gold for instance or even for different reasons to go in a wrong direction then the real issue of just me we have to solve the greek issue and we have the force to solve the adi sure that we have in all our countries where debts public debt is too high including france but the real issue is the proper governance of europe and that's why the discussion between me and sarkozy are last last week with probably. conclude to really a really important decision that will be probably announce in few days from now to reinforce the governance of federal a kind of federal economic and for the governance for europe which is the condition for you all to start we are today in a construction in europe and construction is a long process and complex process and we are in the middle of this construction

and obviously is not very comfortable and now we have to choose the camp we should today to be in the euro zone's that we keep the year old and we put the right governance meaning more sharing of experience and in control on budgetary budget policies and it can have good policies all we get out of you and we cannot get out of you says edward. long as all managing director of the european institute of financial regulation pathways will be back shortly after a break we'll continue this interview so stay with us don't go. please.

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welcome back to spotlight on margaret of in just a reminder that my guest in the studio is draft horse one of the long haul managing director of the european institute of financial regulation. that's grew about the effectiveness of the plan for the euro zone bailout fund to directly guaranteed bond to shares what's your opinion on the measures discussed in the us. those measures of use we have to find a way to help greece to get out of this. server in good issue and it's clear. that in florida. very from you have been constrained of the euro zone. europe is

a fantastic construction. it's a historical construction and you have to put that in perspective is what will happen in twenty five years when china will be there. india will be there there is no other choice for european nations to coalesce is to have a critical mass and be an actor of the global world and that is the objective that we have for our quest for our children tomorrow and to go in this direction we have to learn this so we dating process and it's difficult because even in a family you have some kids are doing the right thing and kids are in the wrong thing but you cannot just get rid of your kids. most of the measures discussed today in europe for how to tackle the financial problems are examples of in their own liberalism well the russian finance minister mr couldn't was awarded the

prize of a best friend in europe maybe because he wasn't he was one of you and you lost his job a couple of weeks ago do you think the russians made the right decision to to sack in their liberal. it's clear that. idealogies our way is wrong you have to find the right balance and today the question is not the only girl easy monetary but as it is just common sense and common sense today is again to find the right governance for europe and to go a step further in a federated organisation meaning when you manage this family you have to be clear to have the same rules inside a family and the same rule you have to implement in forster's world what happened with the year old before is that we were not able to enforce how greece behave and how to manage their deficits and now probably with

a decision that probably goes even mention the jew ing the g twenty summit in cannes and in november will be to take actions credit with action to convince the markets that the governance of you up will be able to face the situation not just for greek we have to save the we have to solve the greek situation but further and we have to save the situation of all european countries managing their public fina does that mean you're afraid of the domino effect which was there in the previous crises yeah it exactly you had a domino effect was lehman and the government government tried to make an example recently man and we could be tempted to do the same thing with greece simply we take an example of greece and we get bit of risk because i didn't follow the rules but then you create a system of risk and a system if we say of greece portugal spain italy then but now the confusion about

greece. and italy and portugal and the situation the ballistic situation of the nature of the crisis the greek crisis in the nature of this situation in italy are part of a radically different then probably there is no real micro economic reason to how does the crisis and and that's why it's very important a political decision will really. confirm a give trust to the market that we solve greece we solved the governance issue of. the federation of europe if we can say so and there would be no way to confuse greece situation with the there in irish or particles this is good news but. the good news are unlikely here for russia from a country is will the ripples of the european debt crisis reach emerging markets like including russia. that's. a very important issue i think again we are

also in historical times because now we are moving to a color global organization and a g twenty prefigure at this municipal organization and this committee pull organization will be driven by the force of financial markets because we need to finance the economy we need to finance the russian economy chaney's economy and if you have good finance financing to fuel for groups ok to do that it's clear that we have to rely on financial centers and that's why the devotion project creating moscow as an international interest center is very important because we need to have a network of financial centers in the word but those financial centers to be sustainable and to fulfill their mission immersed absolutely share common practices common principles common rules that's why we came here in moscow to try

to share this european experience and to see what are the best practices that could be conceivable to be implemented in russia what prime minister putin has recently spoken have investing in russia to an audience of global chief executive spotlight . has more. influence than nine months of two thousand and eleven have seen you one. direct foreign investment into russian economy some of it see also companies invest in russia have recently held a meeting with vladimir putin to praise some of the reforms by company nationally and all the members of the fianna are following we have great interest in the creation of the custom union of russia kazakhstan and belarus there is no thought that a custom union is a key factor influencing positively i don't know the business environment for the fast moving consumer goods and history and companies we've been pleased to see

evidence of the positive evolution in making regulations governing progress from a strategic minerals will not of course the c e o's used the chance to once again criticize europe or see and speak of imperfections in russian laws but nevertheless chilled their rage in the store loose their presence in the country didn't promise comes the good in the russian economy which no one has the experience of survive in a global downturn with minimal losses and this rigid to withstand turbulence in international markets they made it about you know if you were going to support investors both domestic and foreign it will improve the business climate is the growth of investments in there especially interested in that that's not in the norm manager sector social security and infrastructure. big players convinced simmons has recently announced it would invest one hundred billion dollars in russia over the next three years now to expand its presence in the country for an analyst

evaluating market risks welcome back announcement of it in the running for presidency markets reacted was that it would do the news with the main russian index raising two and a half percent two days after the announcement. we don't promise stability put in is stability while as many people think but is stability always good news for investors for for for for the people who play on the market. stability is a necessary condition is not sufficient. when we speak about finance finance mean trust. and also critical mass of capital. and to build up this trust you need to start by the foundations and you have two pillars which are essential which is the right figure lation and credible supervision process ok and it's absolutely necessary for local

investors or foreign investors to invest in a russian economy and how distressed this person is based on compatible rules rules that are understandable from abroad and understand all the russian people and i was speaking about critical mass and it is important to create liquidity too and you need to your financial market and this liquidity is big under fact that most investment from the local investors in russia will get done in russia that we create. a virtuous circle that will give crust trust to the foreign investor you don't have just a count on extra foreign investors for the russian economy and what is happening today a true devotion in. a group is. considering

the building blocks of this i think relation in line with the global principles and i think i was impressed in the last conference and most interesting that what voting group is delivering especially on the market and faster side the merger also i think changes the creation of central depots into reads and securities law is absolutely a precondition for trust and robust financial system less question provocative but do you believe in the there is a plot against the euro from the people who are advocates of the dollar diamonds i don't like the idea of plots. except the people in. somalia but but there is there is an issue behind the shoe is that the two biggest economy of the world europe and us are in

a bad shape and balances are significant in the u.s. and in europe and in the u.s. they have difficulties you have this debate in the. republican and democrat and today we don't have a clear roadmap from the u.s. how to solve it and balances and poor billy. just to. try to focus more on the european issues. yes ok. yes open issues should in fact find a way also to address the american issues thank you thank you very much for being with us and that said for now from all of us here just a reminder that my guest in the studio was. far the long managing director of the european institute of financial regulation spotlight we'll be back with more carbon talk about going on in and out of russia until then. seance i would see and taken.

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