tom. welcome back this is i see the headlines. of a dozen people have been killed in egypt by security forces since the terms of functions began protesting at rock over four hundred demonstrators which began on friday crowds are still remaining in tahrir square overnight just a week before parliamentary elections the stuff of the overthrow of hosni mubarak in february. another stories clouds dotted over the syrian government as the deadline set by the arab league to end violence expires but president assad is defined in the face of growing international pressure. to months of corporate

projects in america with thousand strong marches all over the u.s. and hundreds of arrests have a hundred response. was greek standard time in this case an unfriendly welcome to new unelected leaders and made fears the troubled states and losing sovereignty because of harsh economic measures dictated by the process and those headlines join my colleague marina junction of the top of the hour next that is cross talk with me in just about.

and you can see. the full. glowing welcome to crossfire computor logo uncertain future as the eurozone grapples with the single currency what is the future of political union to save the euro is it necessary to accelerate political unification is greater political union by definition more or less democratic what about the rise of the extreme right. in the south. to cross not the political future of the e.u. i'm joined by charles could chime in washington he's a senior fellow at the council on foreign relations and professor of international

affairs at georgetown university in london we crossed averred in back in our he is a research professor at the institute of contemporary history king's college london and in brussels we crossed the us of yang he is the director of studies at the european policy center all right gentlemen this is crosstalk that means you can jump in anytime you want and i very much encourage it but first tell us more about the euro in the state of the european union there's been a lot of talk about. that last week chairman. answer angle a miracle and now that europe has reached its most difficult hour since world war two she delivered an address to her christian democratic union party calling for not less europe but more as a solution to the sovereign debt crisis or of course overarching message the deeper cooperation within the union is the chief news story it's economic and political unity resulted in a growing skepticism over the entire european project as well as talk of permanent defaults and departures. in my view the best the best option for the greeks used to be falls of course but there is much bigger financial consequences for for the rest

of europe and for the rest of the world if that happens the e.u. leadership is well aware of these perils and has staked its hopes on deeper political cooperation especially from its biggest economy in germany. europe cannot be successful document i also believe that germany could not be successful in the old europe the penchant for political integration and the understanding that the hero and europe have become intricately connected is more than shared at the moment merkel has time and again driven that point home saying if the hero fails europe will fail and that argument could hardly be more cogent at a time when the crisis not only threatens to wreak havoc on the european economy but also in danger its political stability or while all the parties concerned seem to acknowledge the need for a concerted approach and practice the will to make this happen is still lacking and with a series of departures and governments across the e.u. the current structure of europeans attention seems to be slowly losing relevance

but ultimately this comes at the expense of domestic politics where does the extreme right wing has been gaining momentum as a backlash against the euro zone's failure so really not just the economy but also domestic politics that is at stake here well take a look about the future of the political union if i go to vernon first in london merkel says we need more europe not last year of how we should politically tenable these days because so many people will say in the european union is failing because the euro is failing and i'm sorry gentlemen we don't see the light at the end of the tunnel when it comes to the fate of the euro so britain in london what do you think about that. patrol to answer is a political europe isn't in fact tenable probably euro zone is simply stated you have a federal currency in a nonfederal political system so you may say as angular merkel does to put it right you need to federalize the political system but i don't think that there's full understanding of what a federal political system means it means there's more loyalty to the whole than

the parts for example more loyalty to the united states as a whole than california or loyalty to germany than to bavaria now there are very few people in any of the member states who have more loyalty to europe than their own member state and this is particularly important in germany because if you federalize the system it means the germans will have to contribute more to the property get countries to greece italy in the other mediterranean states so i don't think a federal europe is on the way it would be create at the moment would be nondemocratic it would be created by elites so it's a nonstarter ok charles if i can go to you i mean i think everyone would say that the economic union has gone pretty well quote unquote because everyone's cart in this euro mess here i mean the it was the thinking you think when they were putting this together big political union would slowly but surely put layer after layer that people would get used to it because the euro would be so successful well in fact it hasn't been and is really just a really and. a nail in the castle of the european union because people do not want

to participate in an organization where it's actually economically everyone is a risk. well i think that when the euro was launched over ten years ago the idea was that ideally you would have a federal type structure you would have convergence on tax policy you would have the kinds of institutions that vernon was talking about to go with the single currency that wasn't on because the politics wasn't there so therefore launch the euro anyway and started to pray but the prayers didn't work and then comes along globalization and the downturn in the financial system and right now you have the politicization of europe people are now talking about europe in the streets but it's almost a dirty word they're not supporting it i would disagree with what vernon said in the sense that one should give up on any federalist aspirations it's important to keep in mind that the and i in the united states it took decades over

a century before people said i'm an american before i'm a virginia and i'm an american before i'm a texan so these things take time and i think this is a lake or break moment for europe but it's very good going to burn in civil war when you want to. point the real quick. well it also took a civil war in america before america was united there was also civil war in switzerland because switzerland became a federal state the differences between the peoples of europe are much greater than they were between americans obviously there is not a single language for a start and there's no real federal feeding in new york except among various if we get people to go yourself in brussels which i mean maybe the civil war comment is really germane here because as angle merkel is pointed out and the other european leaders of the second world war isn't that long ago in the unification is so very important here the real crunch mom between france and germany is world historic when you look at your country's history to my point is that either you keep you

have to keep pushing ahead or you just drop the whole idea altogether because the status quo simply is not tenable yoseph what do you think about that in brussels. well that's what it is we have to remember that monetary unions never come about by finding the optimal currency zone you know this is the most monetary unions in history have been achieved by power either by power of the law by treaty or by a power of the sword and they have been sustained that way it is very rarely that you can actually convince an entity to voluntarily do so it comes over time when that instruments provides actually stability and prosperity for the time being the euro has done that and we should not forget we're not really having a euro crisis we're having a debt crisis in european countries and we're not having the instruments that other major currency areas are using in order to deal with that and the fact that we're

not having that has to do with the consolations that vernon has related to that wasn't the idea that monetary union would go hand in hand with political union and then as charles i said it was the idea that political union in the end would come alongside monetary union ones. actors and publics would understand and that situation is forced upon us now where we actually see that a member states are using actual sovereignty and they find it very hard to somehow rebuild that sovereignty on the european level that's that's a contradiction here but i was going to ask charles real quick this the contradiction right here because at a time when you need more political union to save the euro to save the union itself it is a time when it's least popular because of austerity mean you have you know you have the germans and the dutch and also you know why do we have to pay for the austerity

of somebody else we didn't lie digging into this it's monetary union i mean this is the worst possible time for a quote unquote more europe at least politically. probably would agree with that and i think that there is a growing gap between the institutions of europe and the need for governance and the politics of europe which are becoming increasingly skeptical of the e.u. and this is something it's also affecting things here on this side of the atlantic where you have electorate saying help me i have low on losing my house i'm losing my income and governments are not able to act and so this is really up shared problem a crisis of governance and it leaves the e.u. in a very awkward position because no one is really getting out there and trying to provide the courage the leadership that europe needs america is just now coming to use the kind of broad vision and encouragement that's been lacking but it may be too little too late because politics is running away from leadership in capitals and in

brussels it seems a version if i go to you looks like anyone that wants to take a lead on this is going to find their political career shortened and very quickly i mean over the past year we've seen six governments fail or change in europe and anyone that gets out there in front is going to be marked forever like herbert hoover at this point out in the united states or the during the great depression i mean if anyone that shows leadership now is really going to have to think twice about their political career moving forward. yes indeed the euro has become an instrument for inducing deflation and recession in the member states and of course that makes governments unpopular with the voters so you've got governments along chosen by the voters as now in greece and italy but i rather disagree with joseph that it's a debt crisis i think it's not wholly a debt crisis to crisis of competitiveness the truth is that greece and italy are much less competitive than germany and therefore the natural market response would

be for their currency to devalued to make them more competitive now america of course is a currency union but there if shall we say mississippi is less competitive than california no doubt people will move from mississippi to california and the market will work but of course there isn't that move realty between countries in europe where people speak different languages so the euro which it was hoped would bring competitiveness would bring some sort of convergence between countries at different levels of competitiveness it hasn't done that and if anything the disparity of competitiveness is actually widened since the european union was set up and that's what proving so dangerous to governments particularly in the mediterranean states you use if you want to respond to them go ahead yes sure sure but let's not forget that depreciation of one's currency is not the only way to get competitive. after all this is a

a short term easing of the situation but hardly has led in the past to a significant longer term increase in competitiveness in fact if you look at the center of the eurozone today germany the benelux countries and france they have long had a stable exchange rate relationship and during that time when you're saying that we have to be sure we're going to go to a short break and after that short break we'll continue our discussion on the e.u. stayed pretty. kitchen. sisters.

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come back across the road go remind you we're talking about the destiny of the e.u. . they can. go to charleston washington i think and an observation i have been looking at this year the euro crisis is a centrist governments are being punished all across europe and who knows beyond me to even i happen in the united states and what we see is the rise of the left wing in some cases but mostly the rise of the right wing and and the rise of the right wing makes any kind of political union greater political union in europe impossible right now. that's exactly right and i think that centrist governments are being punished in part because they're asking electorates to do things that they don't like and the case of greece tighten their belts in the case of germany bailout the laggards and that is adding to a situation where the influx of immigrants particularly muslim immigrants is

fueling right wing parties anti immigrant parties many of those parties are also anti you they disagree with the threats to sovereignty that come with with union and in that sense that the political landscape is becoming more hostile to the e.u. it's tying the hands of leaders behind their backs and it's one of the reasons that e.u. governments have been so slow to react to a very very fast unfolding debt crisis yourself what do you think about that i mean the rise of the right wing is it again is this another nail in the coffin for any kind of further political union in europe. well i beg to differ slightly i don't see the right wing as so much being on the rise there is of course a conservative or right wing surge of sorts but i think the strongest movement we see is the rise of populist policies and that goes across the political spectrum

and its main impact is that it makes the centrist leads more euro skeptic because they they react to this percy varieties and they seek to neutralize it. by taking off and taking on some of the key concerns dear you know look at the true finns they are they are not necessarily nationalists but they are kind of centrist euro skeptic populists and that's what's happening and that's what makes it very difficult particularly for those governments would now have to shoulder the kind of reforms that they have shied away from over the past decade ok granted if i can just continue with what you're supposed to say but then the results are still the same there's not going to be the pursuit of greater political union when greater political union is absolutely necessary if you want to save the euro the euro isn't an end in itself the euro as a means to securing greater prosperity and cooperation among the member states of the european union if it isn't achieving that then it's not achieving what people

hoped for it and perhaps it ought to be looked at again rather than trying to force european politics into a mold doesn't suit it and it was absurd to say that if anything happened to the euro the european union would come to an end the single market would still remain that still be foreign policy cooperation cooperation on matters like energy climate change security dealing with terrorism and so on and the uro's of cots of the european union and the part that frankly is now working very badly indeed when you think about that charles i mean i would i would beg to differ any of the european union and the the euro have to go hand in hand to have the union but you just go back to the what is it. the european economic cooperation the e.c. i mean am i going to betray my age ok i mean you go there now to be going i don't know the right ninety one reactor that i had. yes look the german constitutional court has said that the european union is not a federation it's an association of sovereign states but the european union and the

federalist green remains that for the moment but it doesn't mean that the european union itself comes to an end it's the union of cooperating sovereign states ok charles what is the how do you see the fate of the time the euro and the european union together i mean can they go their separate ways at this point. i would i would i would disagree rather strongly with that view in the sense that if the euro does collapse and countries start jettisoning the single currency i think you will see a very very serious threat to the global economy it will wash across the atlantic we may be heading to a very dark period and secondly just to see the e.u. go backwards to little more than a trade block seems to me to head to the world in which europe and desperately underperforms we're moving into a global transition we're seeing the rise of china and other emerging powers the united states is turning inward because of its own deficits the wars in iraq and

afghanistan the world desperately needs european will and european power and if europe is nothing more than a collection of its member states nothing more ambitious than that but i'm afraid better europe and the rest of us will be much worse off use of will and power does europe have it will and the power. well it has both of it probably not enough of it but let me say there seems to be a greater convergence between brussels and washington at least in this talk then between brussels and london i support were charlie has on occasion saying here it is you know the euro is actually delivering it's delivering to the people and the economies of europe we have low inflation we have high stability our currencies as such and in the old as in the old days cannot really be really attacked by speculators what they can attack they're attacking now which is government bonds

but you know the the euro as an instrument is actually delivering to a degree that unfortunately is not noticeable remember that italy before the euro was going through various economic crises was managed by the i.m.f. at times had to pay interest rates of well over twelve percent had inflation go and nowadays people have got used to the fact that this doesn't happen any longer and now we need to solve well developed players now we need to get back on that track in order to deliver on the kind of goods that charles has mentioned vernon guy had in in mind. well the euro. came in forty years after the european union was formed the european union existed perfectly happily without the euro for forty years it's a mistake to say i do because chiles does that europe will become just a free trade area if the euro disappear it would still be a customs union with

a commentary if they'd still be a single market which is the most important achievement and of course in foreign policy the europeans can perfectly happily cooperate without the euro britain and france work perfectly to gether well together in libya without the euro being involved if the countries want to cooperate in foreign policy they can happily do so so although there's a consensus growing between washington and brussels i think it's a false consensus which is leading europe into deflation and i think although there may be difficulties if anything happened for the euro in the long run i think it would allow european countries to grow again because the euro is proving a terrible constraint on the growth in particular of the mediterranean car and i want to talk about the growth removed i want to talk about the growth of something else in all through this crisis here there's been commentary did the european union with the euro is simply not democratic enough the decisions are being made for too

many other people in distant capitals charles you want to feel that there because there's a did and i'm thinking about occupy wall street sentiments here right now if there isn't it amazing disconnect from political elites in many cases in brussels are never elected by anybody and people would look at the fed i suppose and in the us this is a deficit of democracy right now. well you know i think that the european union has actually done extremely well by being an elite led organization most europeans went along for the ride and they didn't pay a whole lot of attention to what was going on in brussels and what's happening now is a political awakening that is not so much a reaction against the e.u. as it is a reaction against the global economy a reaction against bringing down the welfare state the lack of competitiveness in our mature industrialized economies as jobs are moving overseas to developing countries so there's a cruel irony here europe has become politicized europe is not war democratic but

it is actually working to the detriment of the crisis and it may well be that we need more policy and less of the charges that are europe should go jazz what is that model let me ask you maybe i misunderstood is too much democracy that's what people are you know that they have the right to express their so much of their displeasure of what's going on here because a lot of people say i mean i always ask people come on this program who represents you living in the european union who represents you in the european parliament and no one has ever been able to answer that question and you're an american so i don't have to ask you. they do have representatives in the parliament america was talking not too long ago about having a head of the commission that is directly elected so you can do things to give these institutions more legitimacy but as we've seeing with the constitutional referendum some of the lisbon treaty votes for a more democratic europe and europe becomes the more difficult it may be to advance the fortunes of the union ok vernon it seems to me the european union just keeps asking the same question over and over again and then only until they get the right

answer is the european union more democratic now. i think it's not necessarily more democratic but your having a popular revolt against the citizens being made by elites that mattered less fifty years ago when europe like other areas was much more deferential and people did what the leaders said now these days the leaders can only lead as long as the followers are prepared to follow and when as now the followers are no longer prepared to follow the leaders will find it very difficult to lead and i wonder what democracy can really mean in the seven twenty seven member states a union of twenty seven member states of such great diversity i mean do people in britain really feel they have anything common with those in portugal or greece do people in denmark or sweden think they have anything in common with people in spain are i very much doubt it i think the span is too large to create

a sensible well which is why of course of a lot of talk of a two tier europe why we're almost out of time here well you know really knowing the answer you question if you have one thing in common it's called an array gentlemen we've run out of time i want to thank my guests in london washington and in brussels and thanks to our viewers for watching if you're lucky see you next time and remember us time. if you still. want.

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