the best into the show spotlight and host are going off talks to the head of the european institute of financial regulation about the future of the e use economy and will tell us a bit. sure is that so much pride on a drug that you go home for months there's been taliban bad guys vicious beginning libya's national transitional council has announced the country's liberation from the could darfur dictatorship what kind of country. hello again a welcome to squad light. on r.t. hi i'm algerian olive and today my guest in the studio is a delightful saw there lol present. today's europe is torn apart by

a great financial turmoil the situation is getting worse every day as greece is trying hard to trim its huge public debt by cutting social spending leading just try some demonstrations and athletics spain's rating has been downgraded and the forecast for france is also a pessimist the euro zone's healthier economies power pressed to prop up that we could 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 to save european economy and do all strains relief to wall street we're asking the head of the european institute financial regulation which is the think tank created especially to help overcome the global crisis. economists say many 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 to. may trigger a domino that. strong european nations created an almost five hundred billion euro bailout fund to help their partners but experts say about two trillion euros may be needed to avoid the worst case scenario. because all 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. exaggerating financial crisis but here the hedge funds industry they immediately came out against the new rules saying i 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 financial regulation is part of a bigger organization which is paris your place which is the financial center of paris and this financial center for always tried to be the link between the financial industry and the uses of finance meeting investors corporate. issuers and in this capacity of usually we are following 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 it is not just a question of technical issues around finance. and that is is that this time is more about responsibility rests on civility 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 a surprise and a supreme up years of just leaves a result of some abuses of the banks but is also the result of political will to develop. ownership in the us and try to finance that by tricky

processes that has been managed by decentralizing and they have not been able to discover that and balances created by dis specific situation that then trigger a lack of trust in our the system now we are second phase of this same crazes 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're and sustainable then what the market that 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 what they are more testing is the head beauty of the political authorities to manage

the and 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 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 our fashion fiscal construction and how to manage the gaps the competition gaps between countries it's clear that with 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 the governments of 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 not in 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. some decision and make it by the market to market guessing the market and making a role the role 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 unsustainable and balance mccain isn't especially in europe with sovereign debts but

in also in the us this mechanism is working yet the world 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 a production problem of 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 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 i 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 shitty it is that each of the european countries house to take courage is decision starting by greece where the situation taxation situation he's critical then you 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 also you don't believe that greece can get out of

your a bed when i read the papers of 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 reason 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 it's not the reason decatur that because of the lack of the right governance we let's some countries like greece and even portugal for instance or even run for different reasons to go in a wrong direction then the real issue of just lee we have to solve the greek issue and we have deferred to solve all the issues 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 that's why the discussion between america and sarkozy

last last week with probably. conclude to really a really important decision that would be pulled would be announce in few days from now to reinforce the governance fedorov the kind of federal economy can 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 a 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 choose today to be in a euro zone's that we keep do you role and we put the right governance meaning more sharing of experience in in control on budget the budget but he sees and it can a good person sees all we get out of you and we cannot get out of you says edward. managing 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. wealthy british style. is not on the. market why not. find out what's really happening to the global economy with my next concert the no holds barred look at the global financial headlines tune in to kaiser report on.

a very warm welcome to you this is your news today protesters on hold. i think they are. ladies and gentlemen your chance to choose is to get the status of the human experiment. to see if we put this in this rap music or do you know obviously trying to make sense of the economy and its arcane things as financial templates the research clambering to maintain our confidence in markets and. wants to be seen trade imbalances recession look e.p. missions close to collapsing and stuff like loan foreclosed homes. to fail aaa banks again feel like think if the us crash. i think you just like to an explosion in st the i.m.f. sportspeople just programs increase the total economy.

welcome back to a spotlight on auguring of in just a reminder that my guest in the studio is one of the managing director on the european financial regulation. 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 at this. measures just we have to find a way to head greece to get out of this. sovereign debt issue and it's clear. that in flannery sciri diary team

from there you have been country of the eurozone. you. 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 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 because 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 is wrong you have to find the right balance and today the question is not 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 will what happened with the year old before is that we were not able to enforce how. greece

behave and how to 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 none edging their public fine it doesn't mean you're afraid of the domino 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 recently man and we could be tempted to do the same thing with greece 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 it risk and this is to make 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 in 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 or give trust to the market that we saw of greece we saw the government issue of. the federation of europe if we can say so and there would be no way to confuse the greek situation with the there it is 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. here that's an important issue i think again

we are also in historical times because now we are moving to a military polar global organization and a g twenty prefigure at this mill to poor organisation and this beautiful 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 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 all prime minister putin has recently spoken of investing in russia to an audience of global chief executive spotlight. has bore. the first nine months of two thousand and eleven have seen the new one. direct foreign investment into russian economy some of it see also companies investing in russia have recently held a meeting with vladimir putin to praise some of the reforms the company nestlé and all the members of the fianna are following with great interest the creation of the custom union of russia kazakhstan and belarus there is no doubt that the custom union is a key factor influencing positively the general business environment for the fast moving consumer goods and history and companies and we've been pleased to see

evidence of the positive evolution in make the regulations governing quarterbacks going to strategic minerals so of course the c e o's used the chance to once again criticize bureaucracy and speak of imperfections in russian laws but nevertheless showed their rage in the store boost their presence in the country who didn't promise them stability in the russian economy which now has the experience of surviving the global downturn with minimal says and is ready to withstand turbulence in international markets and i made it about usually in radio to support investors both domestic and foreign direct that will improve the business climate to boost in their oath of investment in a very specially interested in the last months in the north manage a sector socially and infrastructure. big players seem convinced simmons has recently announced it would invest one half billion u.s. dollars in russia over the next three years and then efforts to expand its presence

in the country for an analyst evaluating market risks welcomed the announcement of putin running for presidency markets reacted to that it would do the news with the main russian index raising two and a half percent two days after the announcement. wouldn't promise stability put in is the ability as many people think but is stability always good news for investment for 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 also 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 regulation and credible supervision

process ok and it's absolutely necessary for local investors or foreign investors to invest in a russian economy to have distressed distress is based on compatible rules rules that are understandable from abroad and understand the 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 big 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 account on external foreign investors for the russian economy and what is happening today a true devotion. group is.

conceiving the building blocks of this nation in line with the global principles and i think i was impressed in the last conference in most of them 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 rub a 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 who want to 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 are in

a bad shape and balances are significant in the us and in europe and in the us 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. joe has 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. far their long managing director of the your feet is 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 you and. the. good. luck to. you.

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