the market. can find out what's really happening to the global economy for a no holds barred look at the global financial headlines. was a report on are. they watching r t the main stories we're covering for you out of south syria center stage of the russia e.u. summit with european leaders likely to push russia to exert more pressure on the muskets while moscow urges dialogue to resolve the conflict. thousands of quebec students protest against a dramatic hiking tuition fees which will double the cost of third level education saying their government should stop copying its southern neighbor. across the court verdict on egypt's ousted leader hosni mubarak and his aides ignites fierce continued protest as both candidates competing in the presidential election seek to

exploit the sentencing. of next hour to talk to american economist and nobel laureate eric mascon to find out what he thinks is on the horizon for the troubled world economy. mask in kabul our it in economics it's great to have you with us sir today it's a pleasure so let's start with greece and the latest news we know that chris his public finance is practically paralyzed pensions and salaries won't be paid in june and then you have people and companies transferring their assets out of the country how much worse can actually the cash crunch get will they even be able to. get to the seventeenth of june election we don't know the answer to that since since

the election is in the near future i suspect that they they can and hobble through to the election but things could deteriorate and get even worse and in the meantime i see be the greek situation as a tragedy because so much of what has happened could have been prevented if europe were truly an integrated unity if the same steps had been taken on the fiscal side that is the public spending and tax side as were taken ten years ago on the monetary side so that there were there were it would be true. fiscal integration true centralization of fiscal policy. the. public debt problems that we see in greece but we also see

spain and italy and number of other countries would have automatically have been solved by by virtue of having a centralized europe according to media reports three billion in cash was withdrawn from greek banks. since last election in may and that's nearly two percent of all the cash greek band backs banks hold how sustainable is that well it was clearly such transfers that can't can't go on indefinitely without there being. a banking collapse but that's that's again. a failure of. of europe look at what happened in the united states a few years ago during the financial crisis the federal government stepped in and bailed the banks out there partially nationalize them. europe could have taken

some other steps and greece and and did not do so spanish banks bankia has requested the biggest spill out in spanish banking history and have the spanish banks all soak up the already sure spain has had. some real problems too. and while they have whether or not nearly. as serious trouble. as greece it's. it's bad and the austerity program there has has only made things worse but just how much financial power. do national and the e.u. authorities have to support spain in countries that are in similar situation like italy for example if they wanted to. exercise more

power on the level of the of the union they could do it there are lots of things that could be done to either as the fiscal problem and spain and portugal one good idea which has been proposed and which i hope will be adopted at some point is the idea of euro bonds to translates private debts and. or national debts and so the european objects some fund managers are openly right now dumping the here assets and it's no surprise that it's running really logan's dollar. but is dollar a safe bet at this point i mean america itself has a huge gap and its government up six its g.d.p. the dollar has always been a safe haven at times of economic uncertainty and i think it will continue to be a safe haven for for many years to come yes there is

a. debt problem in the u.s. in the sense that the debt to g.d.p. ratio is higher than it normally is and that it's. if you extrapolate going for the current situation going forward. it looks as though the jet g.d.p. . debt to g.d.p. ratio will actually. continue to increase but in fact. the seriousness of this problem has been exaggerated so you don't look at it as a crisis i look at it as as a problem but as a fixable problem and not a problem that has to be solved immediately by any means i i think a much more important problem in the united states is to get the economy back

to normal form of the still running out of something like eight percent which is too high the first priority should be getting the economy back to normal and then to worry about. about solving the long term debt problem we talk about the ratings agencies i mean how much have they contributed to worsening the crisis because from what i understand and i may be wrong these are independent entities they have owners they trade stock markets why are they allowed to have so much power over the global economy i don't know that they do have so much power anymore i think that they did play a role several years ago this whole sequence of events started in the united states with what was called the subprime mortgage crisis and the rating agencies played a role and making the subprime mortgage problem worse by overstating

the the safety of investing in subprime mortgages by now. i think we've learned to take what these rating agencies say with with less seriousness than was true. which isn't to say that they have no effect but i but i don't think that they have nearly the. power that they had a few years ago but you think they have contributed to worsening the crisis a little sure a little bit for example last summer. you'll remember that there was a somewhat artificial debt ceiling crisis in the u.s. and this led to a downgrading of u.s. debts from purple

a two to double i. that didn't do the crisis any favor that there were there with there were some temporary turbulence as a result of that i don't think in the long run. if it did. serious damage but it would but it was not. it was certainly not a positive step to ask you something if let's say two three men four years ago someone would have sat that you were already facing at crisis of this scale probably people would laugh in your face like no of course not do you think do you think scholars missed something or is it just that the world economy the model of the world economy is running low and it's out of battery and just unable to deliver growth now i actually i don't think this crisis was missed i mean. the financial crisis of way nine was was something of

a surprise to many economists but the problem with europe were not at all miss that there were many economists very many prominent economists who pointed out at the founding of the monetary union the beginning of the last decade that there was a serious asymmetry between the way monetary policy and fiscal policy were being handled that monetary policy was centralized at the european central bank that fiscal policy was not centralized that in the long run this asymmetry was not sustainable so. it was not a big surprise wedding when the problems. of the problems that this asymmetry generated actually. came to reality a couple of years ago leaving the euro doesn't really come with a guidebook but you're really good at game theory how does that actually happen how

does a country leave a carrot currency. how does that happen they'll have to adopt have to either go back to the drachma or adopt the dollar or adopt some other occurred say these things have happened before countries have changed currency and it's usually a somewhat bumpy process it's very rarely a smooth transition and it's not expected to be smooth in this case especially with volatile people like in greece right but but it can happen how rough can you get really if that happens it could be very bad for for greece but like civil war revolution well. again you're asking me to make political prediction it could get very much worse economically. i mean.

greece could go on. into a long term depression unemployment could grow to astronomical heights it's already very high but it could it could certainly get higher. the. things are by no means currently as bad as they as they could get more do you think greece will be in one year's time from now this is a question which we don't know the answer to because it it depends so much. on politics i think at this point given what has happened it's more like. i'll be watching r t breaking at an interview there with eric mascot in taking you live now to the twenty ninth rusher e.u. summit the wrap up meeting there president vladimir putin is there also jose manuel

barroso and herman van rompuy this is their wrap up conference to assess and to what they've got to say we face the same challenges especially in economic and financial fields it requires rapid card in a showing of approaches to the solving very similar tasks i think my colleagues will agree that during the summit we managed to prove the priority of character. of russian and e.u. strategic partnership a common understanding if you assess its need to move forward. for. my view to achieve a situation where citizens of russia and e.u. would practically feel our advantages of our partnership we informed our colleagues on developing an integration process in the territory of c.i.s. . but from that point to a few of their. perspective russian e.u. relations were convinced that you know

a. single economic space in which the. future duration economic union is absolutely compatible with the tasks of strengthening of operation between russia and e.u. of course it was really important to discuss during the preparation of a new. preparation of a new basic agreement between russia and the e.u. from the two sides the interest was proved interests in developing a document where the strategic goals will be formulated and adequate that would be adequate to the needs of today and the main stumbling stone become is the. anomic we could do anything but i'm sure of this agreement we agreed to continue informal consultation is an order to. find you surely beneficial solutions so we consider the possibilities in trade and economic cooperation that's going to be

used in the context of for joining to w t o l we discussed how it. can be used for the development of our trade and to take anomic links in order to settle the problem of issues that steeled exist i would like to stress our gratitude to european union and the european commission for its great to its support of russia in the process of joining the w t o obviously we discussed you the problems you took going to achieve in visa free regime of acute for travelling between russia and e.u. exist and visa barriers is an obstacle to the development of humanitarian context and economy we also analyze how the joint initiative a partnership for modernization is being implemented we will go on working in order to achieve a number of large joint processes with the participation of russian and e.u.

businesses with the participation of followed by national institutions. given in mind the agreements that we have already achieved between our large financial success and it was a very big part of our plan recessional worse aimed at our energy partnership one of the key. base explore our bases for our relations in a kind of field steel in the us we have questions that require further discussion and settlement but in the context of importance. it's going to reach that with time proved corporation between russia and e.u. we are looking forward to achieve mutually acceptable solutions not. one more trouble problem was discussed unilateral decision or free you. from the first january of two thousand and twelve european system of trade for

emission quotes on civil aviation so the third countries discussed the humanitarian issues. of the dialogue russia view and the most talk because questions of international and regional agenda. so. this is the situation in syria iran middle east and in a number of other territories if you look which are sure that they have it would like to stress once again that the discussion we had to do was put forth productive that's what you call of this lee not all the positions are the same but i think that we proved you believe our determination to the to these course interests and sharp political signal to always strengthen in what copulation now we have to move with the same speed it's forward i want to thank our partners and the experts who did a lot in order to prepare our today's meeting thank you for your attention. mr president

thank you for your hospitality it has been a pleasure to have been invited here to these beautiful place percentage of the ocean predictable. this is my first summit with you mr president but this my understanding that we even. had a twenty nine days you were russia's southern half of our joint commitment for the . russian of strategic partnership. as you all know the results of the two last years are remarkable. russian w t o accession the partnership of modernization and the common steps toward if you just read travel the e.u. russia relationship is enjoying its best i never just four years however there is still much we need to do we all do and that what is potentially possible strong political will and heart work with will be needed even in the coming years.

i therefore welcome president putting his commitment to bringing this work for the together with the european you. we had talks on no brault by that's real agenda and all over issues such as the economy and some of the more pressing international issues i would like to highlight the following points. on the economy for your up these are testing times but driven by a clear commitment a clear the communication to work our way through the challenges we are aiming at strengthening grows in the european union that are many initiatives in the making and we will take photo this vision for growth and jobs and you at the european council in june we also addressing systemic challenges for the economic and monetary union as such we must strengthen the monetary union by more banking fiscal

economic integration and in homs governance and democratic accountability i working on building blocks for the deepening of the economic and monetary union in close cooperation with the president of the european commission every quarter due to a peon council in july let me be clear that is no way by for the euro that is only the way i had to do was more integration we want wide awake greece to stay in new york those old white expecting its commitments second on the e.u. russia might not prudish i'm sure we are he confirmed that the best basis for close of partnership should be an ambitious and comprehensive by not a new agreement that includes trade and invest in this context we look forward to that other peckish russians w t o accession. the idea of where you are asian economic union is based is based on the rules could lead to positive contribution

to jay prosperity and cooperation. thirty eight you want to be your spot in it it's more that he session and that's why i see the photo development of the bottom ship form of the new station as one of the priorities in our relations it should be a partnership that covers all aspects of modernization the economy society and the rule of law i made a point today that if i've been so civil society should in this respect be seen as an intact for evil the new stations do great that engagement of civil society opens up what unit these will do for these elements of political institutions and the release of new russia which should not be missed civil society was a force of progress in our own history and take them the one in your seat in russia . for three savvich afterimage our common goal each of contact between people of the backbone of close relations and benefits for all us i def

a welcome to active walk on the implementation of the so called common steps and the progress made in the negotiations on an upgrade e.u. russia the fish and the patient agreement. higher when human rights it is welcomed that russia shows readiness for public debate on human rights as exemplified by the recent hearing in the russian state duma this is a recognition that human rights come so out of metal died a concern all and that is why these issues together with the rule of law and use of missions of political rights new need to be addressed with invited russia's in the next round of the e.u. russia human rights conservationism to do wrestles to twenty national june next time you hope for russia to hope post the culture of nations and finally we had some good discussions on the range of foreign policy issues. on syria let me first say that the situation is appalling the syrian regime should immediately cease all

forms of violence and provides filter or to do un supervision mission european union and russia might have some divergent assessments but before you agree that i'm not as a whole provides the best opportunity to break this cycle of violence in syria avoiding a civil war and finding a peaceful lost and solution we need to combine our efforts in order for this to happen and to find common messages on which we agree we need to walk towards an immediate stop of all forms of violence in syria and what's process of political transition a new round we agree on the urgent need to prevent iran from acquiring nuclear weapons you and russia are working closely together and we all the partners on this issue and we look forward to the next round of talks in moscow where the e.u. will hire a present if cathy ashton will lead the negotiations all six countries will you run

. as regards our common neighborhood tied to the huge support for the sovereignty in that in that it totally integrity of georgia and we believe that the agreement of the commitments of two dozen they should be fully implemented lastly the e.u. welcomes russia's constructive approach in the five who were negotiations in the vanished your country music rather than it has been a pleasure to have attended this constructive meeting i look forward to see you in brussels next i like. to. thank you president putin. distinguished guests please and gentlemen of all i'd like to thank president putin for the warm welcome here it does sound good as bridge and. i always value the frank and open dialogue with president putin and indeed we had this kind of dial

during this summit. i believe it is particularly appropriate that we hold this european union russia summit so early in the beginning of the mandate of the president of russia and also in the beginning of a new. russia and europe are experiencing important political economic and social transformations a new cycle is opening and these officers do paternity to look ahead and things to tell you kelly on our cooperation what we want to achieve and where we want to be. five years time further ahead. in recent years we have made significant progress on a number of issues namely. agreement for russia's your accession and the objective that is you know that you appear in union and you can commission have always supported there was also some progress on vis mobility and on our

partnership for the night vision therefore the purpose of this summit was to contradict the progress in chief and to launch the basis for a closer cooperation last evening we have a very comprehensive exchange of views on the global economic situation the latest developments in russia and in europe let me and this regard just mention our full confidence in the future of the euro area and of the european union in fact the debate now in european union is not how we are going to do the integration of the old. our are you going to further deepen the integration to complement our monetary union we full economic union including in some areas like the banking sector supervision and also in some fiscal aspects so no one should be in any doubt there is absolute determination in the

opinion and in the euro area to. the euro and to solve the duty and further integration of all our efforts and i think this is important for a show because russia is our largest neighbor and a very close to it as you partner we should build upon i was strong ties and advanced negotiations of the new comprehensive view russia agreement be true to cover all relevant areas of partnership including trade investment and energy and lay the basis of a closer. i'm convinced that with a firm commitment of those sides we will achieve a balance in an agreement that will be. beneficial for greece for i'm sorry for russia and for the european union. european union is already russia's biggest commercial partner accounting for around fifty percent of all russian trade it's

also the biggest source of foreign direct investment european is the biggest client of the most important exports from russia i mean energy and russia's obsession opens additional produce for trade and for the development of our economic relations we believe this can be very important for the future. of the superman is that he's now in a phase of full implementation and i'm happy to say that president putin sees it as a priority russia is engaged in a very important process and we are very proud to be partners of russia in that regard. building a partnership between all societies. also and having a closer relationship between our peoples this is why visa issue and mobility issues are so important we are now engaged in the implementation of the common

steps towards visa free travel that we have launched last. we welcome the substantial progress made in the u.s. year a chanson upgraded you rush or visa waiver agreement which should be finalized soon positive developments in these fields have clear potential benefits for our citizens and for people to people contacts on energy we welcome the progress in the energy dialogue and the close you russia energy partnership i stressed that the reliable transparent rules both energy framework remains a key priority for european union so this summit has confirmed the portland common interest we share and our willingness to build stronger relations and work even closer together as most famous russian forwards alexander pushkin west said it lifts and that incentive once wrote that quote we can try and fail but we should not fail.