three. three. three. three zero videos for your media drug free media. just after seven thirty pm on monday moscow you with your headlines now protesters demanding that egypt's military leadership step down immediately agreed. official say at least twenty four being killed since friday the largest demonstrations since february is uprising that ousted president. must go on the west accusing it of provoking violence in syria as some states call for the opposition to avoid dialogue with the government. between protesters and government

forces continues. on the new sensor right leaders take the helm inheriting unemployment of over twenty percent growing debt levels but the spanish people have expressed little faith that the fresh faces will bring a much needed change. because of the headlines on this early monday evening here in moscow bill dawdle has more for you in about thirty minutes time for now it's cross talk today focusing on the uncertain future of the eurozone thank you for. if you can. follow it welcome to crossfire calculable 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 make solar

a political unification is greater political union by definition more or less democratic but what about the rise of the extreme right. he came. across not the political future of the e.u. i'm joined by charles koch on 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 involved in our he is a research professor at the institute of contemporary history king's college london and in brussels we cross to you also 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 and i think that it's no coincidence that last week german chancellor angela merkel an ounce that europe has reached its most difficult hour since world war two she delivered an interest in her christian democratic party

calling for not less europe but more as a solution to the sovereign debt crisis merkel's overarching message the deeper cooperation within the union is the. economic and political unity resulted in a growing skepticism over the entire here opinion project as well as talk of the end to false and departures. in my view the best the best option for the greeks is to default of course but there is much bigger financial consequences for for the rest of europe than for the rest of the world if that happens he'll leadership as well aware of these perils and has still puts hopes on super political cooperation especially from its biggest economy germany present. europe cannot be successful i also believe that you cannot be successful without europe penchant for political integration and the understanding that the euro 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 the hero both 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 it's the it of course ability but 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 european institutions seems to be slowly losing relevance ultimately this comes at the expense of domestic politics where it is the extreme right that has been gaining momentum as a backlash against the eurozone so really not just the economy but also domestic politics that is a 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 less year of how was i 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 vernon in london when you think

about that. short answer is a political europe isn't in fact tenable probably euro zone is simply stating that you have a federal currency in a nonfederal political system so you may say as angela merkel does to put it right you need to federalize the political system but i don't think that there's a 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 more loyal 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 and 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 fine go to you but 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 that 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 it's really just a really and so being a nail in the coffin of the european union because people do not want to participate in an organization where it's actually economically everyone is at risk . well i think 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 we launched

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 going to american before i'm a virginian i'm an american before i'm a texan so these things take time and i think this is a make or break moment for europe very good point vernon civil war burning you want to collaborate on that 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 there's not a single language for

a start and there's no real federal in your except among the various we pay if we go to yourself in brussels which i mean maybe this civil war comment is really germane here because as anglo-american has 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 reproach moment between france and germany is world historic when you look at the two countries history that my point is 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 you also for 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 ultimo currency zone you know this is the most monetary unions in history have been achieved by power either by the power of the law of a treaty or by 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 there was indeed 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 the member states are

you losing actual sovereignty and they find it very hard to somehow rebuild that sovereignty on the european level that's a contradiction here but i was going to ask charles real quick it's a contradiction right here because at a time when you need more political union to save the euro to save the union itself if there is a time when it's least popular because of austerity i mean you have you know you have the germans and the dutch and they'll say you know why do we have to pay for the austerity of somebody else we didn't lied to get into this it's monetary union i mean this is the worst possible time for quote unquote more europe at least politically. well i 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 law i'm losing my house i'm losing my night income and governments are not able to act and so this is really

a 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 averted if i go to you looks like anyone that wants to take a lead on this was going to find their political career shortened and very quickly i mean i would have passed you 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 who does point out in the united states of 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 a large 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 they're if shall we say in mississippi is less competitive in california no doubt people will move from mississippi to california and the market will work but of course there isn't that mobility 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 but

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 know you said you were responding go ahead yeah sure. let's not forget the. currency is not the only way to get competitiveness. after all this is 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 in during their time and i would have to be sure to go to a short break and after that short break we'll continue our discussion on the e.u. state.

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a very warm welcome to you this is your news today protesters on wall street since they have to. leave the sentence a good chance that she says it's a good move for example the status of the human experiments gets. thirty weeks you dismiss rap music awards it goes obviously trying to make sense of the local economy and its arcane things as financial temple the release of the family to maintain a confidence in markets and taking on wants to be easing trade imbalances recession look even the nations close to collapsing a sub prime loans will close people. to fail circlet banks again feel a little like think is the us crash and they've been smashed. just like all the classes in athens three the i.m.f. and the fox we'll just programs increase the total economy.

they can. still. come back and rostock years ago we're talking about the destiny of the e.u. . taken to. st. charles in washington i think it's 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 but

beyond me to even i i have been 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 the 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 in the case of greece tighten their belts in the case of germany bailout the laggards and that is adding to essentially way should read the influx of immigrants particularly muslim immigrants is fueling right wing parties anti immigrant parties but many of those parties are also anti e.u. they disagree with the threats to sovereignty to come with that 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 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 greatly 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 ok and that goes across the political spectrum and its main impact is that it makes the centrist elites more euro skeptic because they they react to this perceived rise 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 there they are not necessarily nationalists but they are kind a centrist euro skeptic populists and that's what's happening and that's what makes

it very difficult particularly for those governments who would now have to shoulder the kind of reforms that they have shied away from over the past decade for a very if i can just continue with what you're supposed to say but then the result is still the same there's not going to be the pursuit of greater political union with 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 it 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 the euros are part 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 be a bit of a different being 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 i would betray my age ok i mean you go there now did you get a no no the right not only 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 dream 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 if 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 go backwards to little more than a trade block seems to me to head to a world in which europe 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 that europe and the rest of us will be much worse off you say well in power does europe have it well 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 word charlie has on occasion seen here it is you know the euro is actually delivering it's delivering to the people and the economies of europe we have a 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 their 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 went 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 go hand in mine did. 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 don't use child stars that europe would become just a free trade area if the euro disappeared 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 think 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 to 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 current i want to talk about the growth i want to talk about the growth of something else going on through this crisis here there's been commentary that the european union with the euro is simply not democratic and that the decisions are being made for too many other people in distant capitals charles you want to feel that there because there's a good and i'm thinking about occupy wall street sentiments here right now if there is an in amazing disconnect from political elites in many cases across are never elected by anybody and people would look at the fed i suppose in the u.s. 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 and 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 now more 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 as what he said model let me ask you maybe i misunderstood is too much democracy that's why people are you know they have the right to express there's so much of their displeasure of what's going on here and 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 americal 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 seen with the constitutional referendum some of the lisbon treaty votes for a more democratic europe and europe becomes the more difficult it may be tended 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 system is 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 seven twenty seven member states a union of twenty seven member states have such great diversity i mean do people in britain really feel they have anything common with those in portugal or greece i do people in denmark or sweden think i have anything in common with people in spain i very much doubt it i think the span is too large to create a sense of order 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 anything else you question if you have one thing in common it's called an alien euro or a gentleman we have run out of time i want to thank my guests in london washington and in brussels and thanks to our viewers for watching us here r.t. see you next time and remember us to. take you. to.