video on demand keys of mine costs and r.s.s. feeds with the palm of your. question. is how past eleven pm here in moscow you're watching r.t. and these are our top stories tonight says it will keep to its nuclear program denying claims in the u.n. nuclear watchdog sleep report that suggests it's building weapons experts are worried the study is just a pretext for a preemptive attack on iraq. by price of education thousands of students back to the streets of london at least twenty activists have been arrested though police abstain from using rubber bullets despite earlier warnings. nato peacekeepers have used tear gas to take control of a serbian barricade erected in all the kosovo as the long lasting standoff in the

region between playful forces and local serbs continues. and the leaning tower of debts collapses on the city's pm berlusconi is probably sparked fresh market panic today. people available to me now with the latest cross talk show where the uncertain future of the eurozone is the only certainty these days. q. hello and welcome to crossfire gang peter lavelle the euro a crisis without end eurozone leaders and national governments continue to be at loggerheads on how to rescue a currency that has an unpredictable future which clearly started out as a financial fiasco of the highest order is now a political disaster with few if any positive outcomes. can.

still. get cross-talk the prospects for the eurozone i'm joined by robert oulds in london he is the director of the bruges group also in london we have caro new he is chief executive officer at the center for european policy studies and in minneapolis we cross the clare hill she's professor at the university of minnesota law school all right folks this is cross talk that means you can jump in anytime you want all right robert if i could go to you first and you know we can talk about the financial nuances about this i think everybody that's been following the story knows basically that the big numbers involved but you know as we i thought last week everything had been decided i thought everything was going to be done you know it was out of close a mark or they had decided everything decided to fate of three hundred million people and now we find out well not really and even the national governments

they're not particularly sure what they want to do the french are just worried about their aaa rating and what's going on in greece now well maybe by the time this program airs we'll have a different scenario playing out there i hope point is it's a political fiasco more than anything else right now. well yes it is it's a political fiasco it's an economic disaster it's becoming a political disaster as well certainly the case of greece and it's spreading to other european union countries such as italy a disaster that has been predicted a long time ago before the single currency was actually born what is just being talked about many people knew the end of this way and so it's been long predicted and we're seeing it play out as we speak this disaster so really it was predicted and really the answer to problems is to wind up the single currency which just doesn't work that might not be very easy to do clarify can go to you i think one of the tragedies and looking at what's being played out with the there is the euro

crisis here and it's going into its second year here is that you know there seems to be so little political will in national governments because nobody wants to make the hard decisions ok because if you really push too hard for us terry you will be punished by the voters so it's this kind of kicking the can down the road as this crisis continues to snowball i mean amazingly so i mean ok the transfer for greece has been accepted but that's still very tentative because if you don't play by the rules you don't do the right thing you're not going to get any more and then everybody is a loser i mean it why is this political crisis so paralyzing because it's like everyone sitting on the titanic arguing over the seating arrangement as we go right into this this the end of the iceberg of this crisis. well thanks first i want to. rub with you so everyone could predict it went this way i'm not quite sure what he means by this but i see

a lot of kicking in to the lottery if not the long term i don't think we're anywhere near it and i think to so many people are potentially so unhappy by any kind of major change because you have a bunch of beneficiaries of the system that just doesn't earn its keep and no surprise they're not willing to give it up but they have strong expectations that the stuff they've led to be likable leave is the case that is to say in the case of greece maybe not paying taxes or retiring early and characterizing hairdressing as a hazardous profession so they can retire even earlier then things like that are a sense of entitlement and you get into that we're sometimes trying to take away something that's yours and there's so many entrenched in title you know there you very very interesting point people you've written here in d.c. for a crown if i can go to you in london one of the things i find very interesting and what following this crisis is that you do see how corrupt a lot of these national governments are because they have all these clientele is we

have cronyism you have certain different differential attitudes towards the banking sector when everything's all on going fine you know everyone can cover this all up but when you look at the italy for example in greece then you find out who really doesn't pay taxes and who doesn't have an interest in ever came taxes and who's taking responsibility in greece and italy at least as we speaking right now nobody really wants to be responsible. there it's almost you will have to overcome the problem i don't think you generalize it so easily litter there's so much corruption there maybe certain countries where there is a huge problem but already you could compare spain and italy and say that spain for example is has a huge economic problem but this government's why it why it's probably a bunch better minister than italy years italy for example certainly has huge problems which are being reviewed with a day greece we all know them by now but there are many other countries i would say the core of europe which are certainly well run of course there is still some

denial of the problem some hiding of the problems for example in the banking systems but this is a thing which we have known in europe since a long time let's say it is the national champions and sometimes no sufficient willingness let's say to recognize certain problems however i think that if you read for example the conclusion from the last two weeks ago or so from the european council you see that as a clear change and we are moving rapidly to a more federal model look for example there is a clear statement of finger pointing to italy in the minutes of the council saying italy should happen to increase its retirement age to sixty seven years which is unprecedented this would never happen in the past when you think about that rather because it seems to me that you know kind of reiterate is that when things are going fine when you when you can lie to get into the euro and everyone carries your weight but when a crisis starts hitting then people start looking after themselves more often and we see that why why would the northern countries of europe want to be having to

have to deal with because the kind of political corruption that we see in italy and in greece maybe to some extent in spain also is that you know they're the ones paying for this continuation of a system that really needs to reform itself and there's no political will to do that because if you do that and you could out there some sense of entitlement i think claire was getting through. well there where do to the idea of political union within the e.u. and we've just heard it it's moving towards a federal structure but that will be creating another disaster the european union is creating problems but in a sense some procedures have beneficial crisis where they can use the problems of the euro has created in the in the eurozone crisis to create fiscal union in a sense an economic government for the whole of the you or the eurozone states that will be a disaster will have new people in northern countries which will be fed up with subsidising the southern countries and people in the south will be just totally fed up with the austerity measures being forced upon them by countries from in the

north it will create serious divisions within the european union the the attempt to have great decentralization will store up trouble for the future is to be greatly alarming it's greatly alarming what's happening weekly how do you how do we deal with the convergence of a unit because i think that's exactly what robert's going out to mean and it's been said over and over again is the german workers a lot different than a greek worker who are going to the beginning of time clare are now great great going to require i agree with larger with chris i agree with robert with respect to the probable i suspect but i don't agree with what respect the solution credit for say. i think. there is there are intractable probably ultimately irreconcilable differences among both the financial aspects the economic aspects of the countries that question you just well yes there are different

practices i don't different and a very strongly kind of level. robert we think well this is so serious and so bad that we have to try to blow it out i i'm not sure what we can do but i don't think that realistically people all the way other care for the moderate term and tell themselves they're not doing that ok if i go to you in london how long can the eurozone kick the can down the road and who's going to pay for it because as we're speaking right now you're getting so many different points of view i mean everyone agrees it has to be solved ok wow well that's a that's a great consensus but i mean there's still different ways of having to have two approaches considering last week apart everyone was told it was being wrapped up well that's not the case nor would we know what is the reason this crisis for the last two years and if you compare it to two years ago we definitely made sure a lot of things which are today to go through there we know what is still what is structurally changed what is structurally changed no money's been thrown at the

problem but what structurally is changed we've always been proud of the problem we have made we have made adjustments we have made decisions and imaginable i mean until two years ago for example if we change the lisbon treaty for example it was a few it is a new front let's say on the bailout clause also now there is a barrier so that we need to have a for just a return to the lisbon treaty to have a more fertile structure but it can also look at the conclusions from two weeks ago where they said look we need to have a separate euro zone council we need to have be much stronger government of course it should have been decided much earlier do you agree with this but you really are somewhere i mean in the same situation as the united states was in a civil war in the mid nineteenth century i mean we are in a form of an economic growth not a good healthy economy turning out and the good. senselessly that we will start to have a more civil structure the key thing has delegated out sepals most common the sovereignty gradually moved to the european level and is no longer national there i want to do

the second part of the program rather than i had to we've elected go ahead robert jump in so often seen as not move to a center which is unaccountable which has been a root cause of the disaster which is in unfolding power should be returned to the nation states with people that we've actually elected can actually dismiss and let elections and that will respond to the people's needs and respond to the different conditions of each individual country centralization in amassing power to brussels in the european union level will just create further difficulties for the future we see it's unfolded with the euro does not suit all member states and neither would a centralized economic government for the european union that will not be in our interest is just too different and too diverse and let's try some democracy and returning powers back to the nation state ok where you want to jump in there. can i ask robert well i'd like to ask robert a question which is to say i understand that he sees this is where we ought to be and i can certainly see the merits in that position i guess the two questions i

have is first robert do you in fact expect this to happen and if so what is the route by which it would happen one of the reasons i asked this question is because you know when i say kicking the can i'm fully mindful open accounts as well different things have happened different things are being contemplated creditor's the chance of them taking a fifty percent haircut all of this again or you know. we've been we've been holding the only. one out of time here in this part of the program after a short break we'll continue our spirit to be on the euro stage with our chief. to discover its beauty and.

communicate with the want to. test yourself and become free. see what nature can give you. in canada and the us so that it is legal for you to give a bubble bath on your baby that contains a known carcinogen something that causes cancer most of us trying to write another book in the present they are sponsored and i think the spirit and most of the guys that creates a conflict of interest today an average cancer drug prescription costs nearly one thousand six hundred dollars a month oh my god i'm nobody with cancer in my family and therefore i protect so because ninety to ninety five percent of cancers hurts people with health family

history of cancer and pharmaceutical industry spends about fourteen percent of their budget on research and development and about thirty one percent for marketing and administration. in fact there are more pharmaceutical industry lobbyists in washington d.c. and members of congress. welcome back to cross talk computer about dr drew we're having a very spiritual debate about the crisis of the euro zone. well robert doesn't you off. if you're on trial do you want to clear his questions . to be returned to the nation states and countries can you even accept the

european union if they so wish in fact most people in britain would actually favor that option and the euro can be dismantled just like the ruble zone was dismantled when the soviet union collapsed and countries can restore their own common sense and that will actually be to their benefit it will free up their markets from being dominated by german german exports which benefit from the euro because it favors their unit labor costs it will help their help them gain competitiveness just like when britain exits the precursor to the euro the exchange rate mechanism which pegged the u.k.'s can't see pound pound sterling to the deutsche mark when the u.k. left the e. of m. its economy grew after the common see was devalued the same would happen for germany and for italy it would be an important part not the whole picture an important part of those countries regaining competitiveness and beginning to grow again because that is the ultimate answer to the problems of the southern european

countries is a distinct lack of growth. italy has had next to no growth through a decade. serious recession if they were to leave the euro it would help that i could feel your fish you want to answer clara where you are you satisfied with those out of us. yes ok you know i understand that robert finds this a desirable state of affairs. and i understand that logistically of course we know a variety of routes to get to the place where rather wants to go but the question i have is the feasibility given the political climate i mean just as we were talking before about how people don't have political will how is a whole country that has expectations of paying very few taxes and getting a lot of government benefits how is that going to be changed around i also want to know the answer the question so many people having transient interests there how would the endeavor work to say that have the people who believe or understand that

this is the right way to go to in fact persuade people who are going to be massively hurt and dislocated by it to proceed in that direction yeah i mean you're damned if you do damned if you do that are a question of what i'm going to find out first go back to london first let me go back i think it's very interesting i mean what is the choice is really before the population of the euro zone is it is it to save the currency or to save the union can you do both simultaneously or do you choose one if i'm saying you choose the union you go political union because only a political union can support a euro ultimately because if you have a fiscal side in the eagle leave it all the way the other direction you can't have this little ground that we've had for the last decade. and this particular said that's what i just mentioned a moment ago notice a choice between national sovereignty and federalism and we need to accept that for certain decisions we have done it for monetary union but not for economic union

that things have to be decided at the center say for the seventeen not necessarily for the twenty seven and no longer at the member state level for example if greece last week were to have voted in order for the end of the world or to have passed out of it and left the choice to degree two persons it would have meant that the greece greek citizens would have got a veto on focus on economic governance within the euro zone which is almost unheard of and said there should be there couldn't be a people against that of course all member states can have all the solutions but if there is a majority deciding in a certain sense you have to go in a certain sense and that's what needs to go on but that is the good thing of this crisis and you see we are clearly moving this direction also the president although these are allies you see the actual state only seeable is losing their jobs is a good side to this crisis. we know i said there's only because it's on the streets people. and you say there's a good thing to these crises and that some political project some political found fantasy held by a small political class small people a classic class it was

a greater interests to serve their own interests rather than protecting their own interests and the people that work in their countries that astounds me and the standing thing to say here is you want to reply to that go ahead and i just have to say on that on the issue it's very simple to say we have to look back to the period nineteen ninety two ninety ninety four when you had a similar situation as we have not now let's say not such a deep recession but also recession we had competitive the of liberation for example in italy almost in spain and we have to look at the results and imagine yourself let's say if this were to happen today let's say well it is work to be better yes or no if the euro breaks down let's say this will be a disaster for money conference primarily for germany the motor of economic growth in europe at the moment you know clear franco do you really and other element of all germany would. want to i want to go to choir here but the thing is that i'm a lot of the great skeptics of the way to your own has been dealing with this is that really at the center of it all is the banks i mean it's not saving countries

it's not saving populations it's saving a banking class and where you have political elites that are so deferential to the financial system of the eurozone that's what's being bailed out that's what people are saving because you know there are stereotypes the way it's being practiced in greece they're going to be in the gutter for a generation and it is going to get worse i mean the government in really just survived a vote as we're sitting here talking and then you look at what's going on in france they're going to go down the path of austerity and i can no one can convince me how that creates growth. well i mean the austerity problem is another kind of intractable thing on the one to have and you know you'd kind of like to have governments throwing money at people so people could spend it on the other hand of people or not let's say returning it in taxes then say spending enough working hard enough and so the government is getting the amount of money that it needs to pay off its debts and then becomes less credit worthy and

there. the borrowing costs go up so we thought you would clear the clear can i ask you i mean you're absolutely on this i think. robert is saying is here is it you could do that or the new should street level can't shoot but you can't do it the way the euro is set up now because just what you just said makes perfect sense but you can't do it to do it you have to have brussels decide the screening system in italy in the in the in the plumbing system in st and that is this is not something that's going to happen anytime soon nor would it be popular the idea of the eurozone from my perspective on the one hand i can see many arguments for it and on the other hand i can see many arguments against it i think at its inception there were many reasons to be skeptical but also be optimistic right now we're seeing a lot of the downside can we capture the good side of it very very difficult very complicated car. and i mean robert feels very strongly that the euro is just i

gather the whole zone bad idea we need to bring back national sovereignty and so on i can totally see the arguments but i guess my main thrust here is that. as a practical matter i'm more thinking about how to proceed just because it strikes me that nobody's dismantling the zone tomorrow maybe they should but i want to sort of focus my energies and try to cobble together the best mechanisms that are in fact we are a world. unfortunately peter as you say the banks they have way more power than they show you are way more solicitous to creditors than they should be and i completely agree with this certainly in the states that's been the feature of what's going. on so it's a very social this is the rare state socialism for the rich and capitalism for the poor car i'm going to let the banks off the hook here in the euro the euro zone everything i've seen and maybe i'm just too much of

a cynic here and i used to be in investment banking ok it seems to me the banks are calling all the shots every step of the way and merkel is just saying what's there to sort of cozy saying what's the tune we're dancing to now because it's saving those banks that's what's most important isn't it. i'm not so sure about a savior look at the conclusion of last week's g twenty cults all business. capital charge for globally since their mc banks i mean is an extremely important step forward and would have been. difficult to imagine two years ago i mean the governments that are against me against the lobby of the banking sector let it which was certainly not. wonderful people are very call the rituals as they have lost their knowledge they will have only for this time of the important banks a much stronger couple than art which is in fact obviously. one of the big remit that was supposed to have come to fruition last week i mean i read it very carefully it was voluntary this voluntary that voluntary you know yes it is it's

very clear and we use this money come from not very clear it comes from taxpayers apparently what do you think about that robert the end of day it is dropping kicking down the can to make somebody else pay for it they didn't make these problems in the first place exactly in a large part of things i say arrange banks is actually to save president sarkozy's career he's got the french elections coming up and he doesn't want fonts to lose its aaa credit rating because i could well cost him the election so that's a key driver in his decision making that the haircut which will be faced by private lenders to greece that doesn't apply to the european central bank which is bought up greek debt it doesn't apply to the the european union or money it's given over so really it will still be paying nonny to the politicians and to to the institutions of the european union but it's the private sector that would be taking taking the haircut as it's become known ok clarify i'm going to kind of maybe fuse this all together as we come to the end of the program here i mean it seems to me

that democracy is so very much challenged right now in the eurozone because as we started out the program here nobody really wants to take the lead on bringing back because it was mentioned on this program that sarkozy has elections coming up here governments are teetering it's very of this is where the you know the meat meets the metal here because you want to stay in power it's natural that anyone want to but you don't want to be the person that has you know it has to preside over a budget of pain. well i mean i mean how do you get around how do you how do you around that for how do you get around that because there's no leadership to say you know you have to do this no one wants to do that we started this is where we started the program and it just kicks the can down the road when it maybe we want to and. yet maybe we want to and i really believe you know ok one of the people have some good ideas but they don't actually know. the right thing even if they did get it passed and furthermore

even if they didn't get a pass there be no way to know for sure that it was being carried out. how greece managed to fall everybody with respect or if not for everyone at least be able to take the position in a matter of they didn't get in trouble but it had a lot of let's less net but it actually did what's in the law to stop people from being able to take the position that they are complying with various things away from afraid we've run out of here have an american it's clear you have ended the program on the plecos note ever ok bonnie thank so much is today in london in minneapolis and thanks to our viewers for watching if you are to see you next time remember rostock.

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has its uses. theatrics.