hello yellow welcome to squad light. on our tate algerian aravind play my guest in the studio is. today's europe is torn apart by a great financial turmoil the situation is getting worse every day as green is trying hard to firm its huge public debt by cutting social spending leading just tried some demonstrations and athletics spain's rating has been downgraded and the forecast for france is also a pessimist the euro zone stealthier economies power pressed to prop up that we could neighbors some people start saying the wall street sharks initiated the prices to weaken the rival european currency so will the most time billion bailout loan save european economy and then do all three relief to wall street we're asking the head of the european institute of financial regulation which is the think tank

created especially to help overcome the global crisis. economists say nine european 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 a domino effect that the euro zone strong european nations created an almost five hundred billion euro bailout fund to help out their partners but experts say about two trillion euros may be needed to avoid the worst case scenario. thank you very much for being with us first of all will be talking about european affairs and you can parliament and the e.u. member states have finally reached. a compromise on

a set of rules which as we read. restrict practices exile braiding financial crisis but i hear the hedge funds industry they immediately came out against the new rules saying a quote they increase government borrowing costs and reduce real economy investment so which side are you in this in this new culture that. my organization though you have been used to to financial regulation is part of a bigger organization which is perry's your place which is the financial center of fairies and this financial center of power is tried to be the link between the financial industry and the uses of finance meaning investors corporate. issuers and in this capacity of yours lee 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 cities and to find an answer to this critical situation it's clear that we are living in a historical time and this time is not just a question of technical issues around finance. is is that this time is more about responsibility responsibility and leadership of. the political authorities of the world so not the responsibility of the financial institutions but the responsibility of politicians in a way. because two reasons first this. crisis has been triggered in two thousand and seven with the surprise and the surprise. obviously as

a result of some abuses of the banks it is also the result of political will to develop. ownership in the us and try to finance that by three key processes that has been managed by decentralizing and they have not been able to discover that and balances created by this specific situation that then trigger a lack of trust in all the system now we are second phase of this same creases and because of this first phase government governance has 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 that testing today is not just the fact that greek greece is

a problem because we all know that greece is a problem because of their internal economical governance but what they are more testing is the head beauty 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 euro. and. the logic would have been to create the conditions too of a. single currency before 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 the competence gaps between countries it's clear that without this 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 both governments are different countries are democracies at least there were always they've 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 the decisions are made more than the white house but are wall street and they are irresponsible so people want responsibility for financial institutions is the time to talk about this or. some decision and make it by the market to market guessing the market and making a rule the rule is how to manage risk when there's 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 to and sustainable and balance mechanism especially in europe with sovereign debts but in also in the u.s. this mechanism is market the world is not going on and is detecting denying that there is a problem. and then you have to solve the problem and today the problem is not just a production. 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 initiatives. by the way the g twenty initiative had been triggered by. our president sarkozy who today is the chairman of the g. twenty and they really think that the g. 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 and i told you we created a currency but we don't have the right macon ism to manage its currency all this and greece is is trying to be responsible it is implementing dress thing austerity . 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 bottom up initiatives and top down initiative the bottom of the is that each of the european countries house to take courage is decision starting by greece where their situation taxation situation is critical then they have to take very critical

decision and. they are in the 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 densher well you don't believe that greece can get out of euro bet when i read the papers and financial papers i get an impression that greece will overcome the crisis and i also get an impression that greece is in the center of a crisis if not the result of a crisis and once greece becomes better the problem 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 to cater that because of the lack of the right governance we let some countries like greece and even portugal for instance or even run for different reasons to go in the wrong direction then the real issue of just leave we have to solve the greek issue and we

have deferred to solve all the issues that we have in our countries where debts public debt is too high including france but the real issue is the proper governance of europe that's why the discussion between america and sarkozy 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 fedorov the 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 which shows today to be in a euro zone's that we keep do your role and we put the right governance meaning more sharing of experience and in control on budget budget but he sees and it kind

of good policy sees all we get out of you and we cannot get out of you says. director of the european institute of financial regulation will be back shortly after a break we'll continue this interview so stay with us don't go. i

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just. to be so much brighter if you mean the moon about the sun from steve kruschen is so . please stop top teeth dot com. welcome back to spotlight on all that often just a reminder that my guest in the studio is draft horse one of their long cars on

managing director on the europeans to shoot our financial regulation mr long doubts grew about the effectiveness of the plan for the euro zone bailout fund to directly guarantee bond issues what's your opinion on the measures discussed in the heat of this. those measures just we have to find a way to help greece to get out of this. sovereign debt issue and it's clear that. the implant sorry diary from europe incomes three 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's

no other choice for european nations to colonize to have the critical mass and be an actor of the global world and that is the objective that we have for our quest for our children to model and to go in this direction we have to learn this sedating 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 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 finance minister in europe maybe because he wasn't a liberal when he was one of you and he 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 with wrong you have to find the right balance and today the question is not the only burley's in 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 figurative 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 enforced as all what happened with the year old before is that we were not able to enforce how. greece behave and how they manage their defeats and now probably will the decision that probably sarkozy will mention during the g twenty summit in cannes in november will be to take actions credible and to convince the markets that the

governance of europe 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 on we have to save the situation of all european countries may manage ing their public fine it doesn't mean you're afraid of they don't know effect which was there in the previous crises yeah it's actually you had a domino effect was lehman and the government the american government tried to make an example we see a man and we could be tempted to do the same thing with the greasy and it would take an example of greece and we get rid of risk because they don't follow the rules but then you create a system make risk and a system a chris greece portugal spain italy then but now the confusion about. greece. and italy and portugal the situation the domestic situation of the nature of the crises the greek crisis and the nature of this situation in italy are part of a radically different then probably there is no real macro economic reason to have

this done in a crisis and and that's why it's very important that the political decision will really. confirm i 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 the greece situation with the. irish of portugal so this is good news but. the good news i would like to hear for russia from my country is will the ripples of the european debt crisis reach emerging markets like including russia. yeah that's an important issue i think again we are also in historical times because now we are moving to a. global organisation and a g. twenty prefigure at this mill to poor organisation and this mythical organization

will be driven by the force of financial markets because we need to finance the economy we need to finance the russian economy chinese economy and if you have good finance finance if you will for gross ok to do that it's clear that we have to rely on financial centers and that's why devotion projects 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 emersed 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 been investing in russia to an audience of global chief executive

spotlight limited me that has bore. the first nine months of two thousand and eleven have seen the new one doing direct foreign investment into russian economy some see some companies invest in russia have recently held a meeting with my dinner routine to praise some of the reforms my company nestle and all the members of the future are following with great interest the creation of the cotton union of russia kazakhstan and belarus there is no doubt that the cotton union is a key factor influencing positively the general business environment for the past moving consumer goods industry and companies and we. and pleased to see evidence of the positive evolution in making regulations governing quarterbacks going to strategic minerals of course the c e o's used the chance to once again criticize iraq or see and speak of imperfections in russian laws but nevertheless showed their rage in the store boost their presence in the country but didn't promise them

stability in the russian economy which now as the experience of surviving the global downturn with minimal says and his ready to withstand turbulence in international markets and i made it about usually we're going to support investors both domestic and foreign effectively will improve the business climate to boost in their oath of investment in a very specially interested in the best minds in the north manage a sector socially and infrastructure. big players seem convinced simmons has recently announced it would invest one hundred billion u.s. dollars in russia over the next three years now an effort to expand its presence in the country for an analyst evaluating market risks welcomed the announcement of putin running for presidency markets reacted positively to the news with the main russian index raising two and a half percent two days after the announcement. couldn't promise stability

put in is stability while as many people think but is stability always good news for investment for for for for people who play on the market. this time it is a necessary condition business sufficient. when we speak about finance finance mean trust. it means trust and critical mass of capital and to build distrust you need to start by the foundations and you have to appear as which f. is 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 to how distressed distress is based on compatible rules rules that are understandable from abroad and russian people and i was speaking about

critical mass and it is important to create liquidity too and you made to your financial market and this liquidity is buried under fact that most investment from the local investors in russia will be done in russia that will create. a virtual circle that will give cross trust to a foreign investor you don't have just to a count on external foreign investors for the russian economy and what is happening today true devotion in. group is. conceiving the building blocks of this relation in line with the global principles and i think i was impressed in the last conference in most interest so that what voting group is delivering especially on the market infrastructure side the merger

of stock exchanges the creation of a central depositories and a securities law is absolutely a precondition for trust and rubbished financial system last question that may sound 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. miami but but there is there is there is an issue behind the issue is that the two biggest economy of the world europe and us 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 summer between the republic republican and democrat and today we don't have a clear roadmap from the u.s.

how to solve it and balance and poor billy. just to. try to focus more on the european issues. yes ok. yes they 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. farther along managing director of the european issued our financial regulation spotlight will be back with more on the carbon thought of what's going on in and out of russia until then. stay on. and take it thanks to. the players. play.

in the czech republic he's available in. central.

full stop. in. the beach. but the controversy surrounding him. speculation. the occupy wall street. protests.

critics of the current president. just after six pm on tuesday here in moscow. with me. after five days of being on public display inside a meat market the slain former libyan leader moammar gadhafi has been buried his body was taken to a secret location in the desert to prevent his grave becoming a shrine for sympathizers or for being vandalized. with all the.