welcome back you're watching our t.v. here's a look at the top stories the top u.s. officials call in the security council to the pressure of the syrian government while saying the armed opposition is stepping up its attacks which must end of this as another massacre pulls the country closer to civil war with u.n. observers still unable to verify the details of the atrocity. presidents in a small irish town go back to their old currency to save businesses from collapse as more people fear the euro is only heading down the drain that's amid reports spain will need at least forty billion euros in bailout money to boost its crisis hit banks. the euro twenty twelve football tournament kicks off laden was a scandal as several european governments boycott the championships they say they

are concerned about poor human rights records and racist rumination at club level imposed poland and ukraine and will not attend the games in protest. while next in r.t. if you know what alan he is gas discuss the future for european monetary union as greece and spain saying deeper into the debt crisis. if you. still. owe him a welcome to crossfire computor all about crunch time for the euro with the greek economy in tatters and spain on the financial brain the future of the monetary

union looks anything but bright world leaders are calling for quick and decisive action to avoid a doomsday scenario while the european central bank has come out and said the fate of the currency is not in its hands. and if you. start. to cross out what seems to be the never ending euro calamity i'm joined by rodney shakespeare in london he is one of the founders of the global justice movement in brussels we have used than usual he is president of the e.s.c. europe two thousand and twenty steering committee and in new york we cross to stephen foley he is an associate business editor of the independent all right gentlemen crosstalk rose in effect that means you can jump in anytime you want to write me if i go to you first in london we have cameron and obama saying there must be decisive action on the euro and then we just come out and just hours ago we have the european central bank saying well it's up to the the polities and individual countries of the euro zone is this a political vacuum is this where are we going here or is it just finger pointing.

it's a complete bankruptcy bankruptcy of new thinking cameron probably means more austerity which will make the thing worse. lending creating money interest of it to the banks will be putting money into and never ending black hole and of course there is the third thing in their minds which is basically to print money as was done in nine hundred twenty three in germany none of this will work the thing that is required is an economic democracy in which you use national banks and that can include the european central bank for interest free loans to spread the real economy to every individual in society in other words you go for the ordinary people and through them is the solution they are productive in their consuming power but we must have a revolt against the banks and we must have a revolt against the elites of europe who are part of a structure who are selling out the rest of the world that only thinking themselves

used to regularly you in brussels what do you think about that because you know we keep hearing about this calamity but where are the real solutions because the people that say that it's not their responsibility it's somebody else's ok and we're just having these everyone is it crossed purposes right now the house is on fire now what is going to be done to put it out. i think you exaggerate. there are tensions that's undeniable but they're working hard to to come with the solutions and i'll tell you one thing that the bank president the president of the commission the president of the council and are working now on a plan that will be adopted probably on june twenty six. in order to get at least a part of the problem in order ok. if you say that's the date that's after the

greek election stephen what's going on here are people working at cross purposes is there any idea how to solve this problem. well i mean every time every time it looks like we've overcome one particular problem the next one erupts certainly. no agreement on what. an ultimate solution to the problem will look like but there are there are solutions that can be found to each emerging crisis as it comes out i would i would reject the suggestion that the house is on fire but it's certainly a very dangerous time and the biggest and most dangerous crisis facing the world all right gentlemen before we continue our discussion with have a look at some of the elements that brought us to this point in time. g. seven finance ministers and central bank governors met on tuesday to discuss the eurozone precarious banking system ahead of the g. twenty summit in mexico the meeting of officials from france germany italy japan

britain the us and canada came amid speculations that spain is now in a situation of extreme difficulty and my need a bailout german finance minister shall be a was at pains to l.a. fears pressroom worried about the looming meltdown the spaniards are doing everything right and nonetheless they are coming under market pressure we need to manage this through close and trusting coordination the press conference had an air of visible hawkishness and there were no clear signals of him in stimuli despite the fact that some governing council members were clearly in favor of the june rate cut marian druggy once again called for a response from a political leader is the e.c.b. president stressed each of the crisis hit states should monitor their domestic issues more closely before anyone decides on the eurozone wide solution all countries have all countries all areas have to work together. and they have pretty

much first and foremost they have to address their own problems. then they should worry about this. lot of their policies or lack of policies to the rest of the world in the meantime the us treasury issued a weak statement on the feasibility of european fiscal union but the lack of a powerful voice in proactive political leadership suggests the eurozone will continue its attempts to fudge its way out of the crisis any you didn't across talk r.t. . ok ready if i go back to you i mean it's no wonder the president of the european central bank speaks that way he's already injected a billion euros into the system here and we still have our borrowing costs that are sky high i mean he hasn't really done much in is stephen pointed out maybe getting one crowd going from one crisis to the next but no ultimate solutions here on the table there is no to much solution in the present thinking and nothing i'm sorry to

say this use nothing will happen on june twenty fourth the reason is that the system is the term into up hold the interests of our financial elite when it's understood that banks should be the means by which the ministration is made of interest free loans for the real economy to every individual so that they increase their own productive capacity and their ownership in other words economic democracy but what we've got is something which is much worse than nine hundred twenty nine nine hundred twenty nine they didn't have consumer debt they didn't have all this housing debt but the debt today's many times higher we're seeing the fourth operation of the kondracke t.f. cycle and the present elites in europe all they can do is to sort of basically sit on their hands and anything they do with their present mindset will make it worse you see is simply one of this elite and he has that the faintest idea of what is

happening and he and his colleagues have no solution to it you see you want to reply. yes. all this criticism of the leader is totally wrong and the elite is very much interested in vestment stability and job creation they are interested in grace and what is happening today and that makes the markets as well as politicians very nervous that is a renationalization of the banking system and this creates dysfunctional cross border banking operations we cannot without the banks so something has to be created to go all that to get the fabric again streamlined and that is a banking union and i am sure that within three months we will have a banking union ok well can you explain what that you are this what does that actually mean because i mean the nationalization of the banking system that sounds

like a better idea to me than what we have now. that's absolutely not true is the banking business we really have now is the banking system in the european union for the people how's it work for the people we have a crisis yes of course we have a crisis but we cannot without banks what we have it is have national have you ever seen have nationalizing over the system working without banks i don't see the system working now in writing do you want to jump in there. yes i do use his assumption is that the free market quote is basically a little bit out of balance and with a little bit of a twisting of the adjustment here it will come back into a balance he does not understand that the present system is fundamentally flawed and is going down hill and he has nothing to offer he cannot come forward with a substantial practical proposal which will solve the problem for the mass of people in spain it's fifty three or fifty four percent of unemployed among the

people between eighteen and twenty five uses got no sure lucia and so that the same with any of the other countries stephen you want to think i don't really think the run is suggest. we're right and it's really not suggesting a practical solution either than the notion that in an era of globalized capital markets you can just sweep away the banks or have a banking revolution across europe as is is neither realistic or more practical and it's certainly not the right solution to the incremental problems of the of the euro what we need right now is to is to prop up the banking system and to make sure that the banking system is not a mechanism for contagion across the and that is to their credit that is what the european leaders are talking about right now we're talking about using the banking system and using the recapitalization of the spanish banking system which will come after the i.m.s. report next week using that as the mechanism to introduce transfers from the richer nations to the poorer nations of the periphery now that's going to be good for the

people of the periphery only sweeping away the banking system having a revolution and causing causing chaos in global financial markets isn't going to do anything for the man on the street in madrid or in athens even if i get through with you i mean what point do you stop recapitalizing banks that i mean in the you have slippery slope you have moral hazard here how do you stop that. well you start recapitalizing them when they're fully recapitalized we're going to learn next week what the i.m.f. estimates of the needs of the spanish banking system are you know it's a very it's very clear what the solution is here we fill in the black holes that have grown up inside the banking system at the moment we organize a transfer of political power to the center of fiscal responsibility to the center and we restore growth of the euro zone through an end to the crazy policies of austerity now that's the solution the question is what steps do we need to take between now and getting to that solution. before we go to the break go ahead.

steven is essentially proposing a form of keynesianism and he will in fact increase the debt borrowing from the banking system at the interest putting in the wrong areas he did not listen to what i said is there has to be opened up a new interest free supply either from the national banks all from the european central bank which supply must always be for the real economy and for the spreading . i'm ignoring the fact that all the reports on not got the jobs and the income jump in here we're going to go to a short break and after that short break we'll continue our discussion on the euro crisis today. if you see.

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can you see. the future. slow. down peter lavelle to remind you we're talking about the turmoil in the eurozone. slump. and if you say oh. ok you said let's go back to you in brussels here i mean there's been a talk over the last few months of mutual izing the european debt and within the euro zone i mean that was one way out in theory of a probably makes sense but politically it's very dangerous isn't it. yes what is dangerous is that you take one step without taking the other steps and what has to be done is that steps has to be taken simple take the asli now few things are clear everybody including the spanish government including in the

greek government is agreeing on financial dissipate and everybody is now agree also of a growth pact that is more mourning for. growth but within the framework of the measures that have been agreed upon so on the principle of coordination one is agreeing what is lacking is trust between countries trust between banks the trust between banks has to be brought in by the banking union that will be proposed by june twenty sixth and at the same date the germans and the spaniards and everybody will agree a road map back to normality and the best argument for this is that david cameron went to berlin today he is out of the euro zone he is here

a skeptical the first hour they still is and he pleads pledges very much to mrs. merkel to to follow that road map so all europeans are know. very. intense discussion the eurozone members and among your members and all together is in order and i feel that. it is a blessing in disguise that. so strongly because there is no alternative ok stephen if i can go to your me a lot of criticism of the european the way this crisis been managed is that it's been to the advantage of the banks saving financial institutions and not thinking about sovereign debt since in the end actually jobs for people how much of it is today do you think it's been looking after the financial institutions and i would say the very rich. i don't i don't see that characterization being a fair one to be to be honest the the point about the point about about maintaining

a stable banking system in globalized markets is is we've seen what not having a stable banking system in globalized markets means we had it here in this country in the u.s. in two thousand and eight when lehman brothers went down in the money markets collapsed and was teetering there was no alternative to propping up the banks this is how this is how the man in the street gets his get his money out of the cash machine this is how we get paid this is how bad has it and he's has to bail out and really this is eleven needed jobs for average americans we saved the banks that it saved the economy. will it save the economy yes because without the banks there would have been no economy and there would have been no jobs there's no well there's no reason for this interview it was. theirs and it was in the car you're doing it plenty of caviar private capital could have done the bail out easily easily well i mean you want to jump in. here and i mean it's simply not the case ok there's i will tell you this i was here reporting on i was here reporting i was

here reporting on the on the crisis in two thousand and eight there was no private capital there was no private capital for the banks there was no private capital for the auto industry there was nothing except the u.s. government standing in the way and frankly the alternative of letting the financial infrastructure collapse would have been so much worse now lessened the what's happening in the eurozone is incremental political solutions to the emerging problems but what you haven't had over two years of this unfolding crisis is you haven't had a banking collapse now i think i think we should actually pause and give some degree of credit to the to the political elite spinning so traduced on this program that we so far over two years there hasn't been a moment there hasn't been a lehman brothers moment that has tipped the banking system the financial infrastructure and for humanity that it was incorrectly and receive and if that is the case then why don't. they just let the resellers grease is so important no the entire banking system will collapse i mean really go ahead jump in. i can't here

believe that i'm hearing what stephen is saying he was talking about a stable finance banking system the system which built up debt and absolutely broke the world banking system a system which has no concern for spread in the real economy a system which is in fact a toll of our financial elite and it is absolutely lucian's that he say and at the moment stephen has no proposal he's not even interested in the greatly increasing unemployment going on in country after country throughout the world in the usa it's twenty to twenty two percent stephen and there's fifty fifty million people on food stamps stephen and i think you want to take account of these things the usa is responsible for this and it's the ins and its practice is really really doing this and you're suggesting you know the solution you're suggesting which is to collapse the banking system of the eurozone is no i do not see unemployment in the eurozone

i tell you that much now listen the last this and see what i see is a cross europe is there a harness is the austerity the austerity policies the austerity policies across the eurozone are not working they are making matters worse they must be stopped and they will be stopped because of the election in france because of the pressure of the g seven because of the pressure from the g. twenty we're going to reflate the global economy we're going to take on and we're going to take on extra debt frankly in order to make sure that people can get jobs and we can bring unemployment down it's absolutely vital that we do that there has to be an into austerity that doesn't have to be a banking revolution there has to be an end to austerity and that's what we're going to get in the euro zone use you want to jump in in brussels go ahead. yes please first of all i would like to say that you have all sort of the three agree that's coming into force now you have a number of financial directives which will be adopted within now two months and

that will bring. the way the banks are moving and are operating so i absolutely adamantly against any suggestion that the elite of the banks and the leader of the politicians is together in. the. on the ground. there is an analogy there was no you're right and there were that great stephen jump in well i was going to say you're absolutely right we have proposals coming out of the european union just in the last forty eight hours which which sets out exactly how we will resolve banks to get into trouble in the future and how we'll make sure that we know more taxpayer bailouts for the for the banking system resolving all the problems that we learned about in the banks and bringing the banks under control and my goodness we know that's a serious problem it's being done it's being resolved here in the in the u.s. through the dodd frank legislation and there's more than needs to be done it's

being it's being discussed in every country in the year in europe and centrally in europe and we will do that there will be there will be a resolution to all these all these revelations about bad banking that we that we've learnt are going to last even if i could separate even if i could stay with you if i could see what you see even if what if the greeks to get out of the collapse your house of cards. it's only going to be you know it was even you go ahead stephen go ahead. well i was going to say it's a very it's a very dangerous moment. i would use the analogy of two thousand and eight again when when the u.s. government decided not to bail out lehman brothers there was this sense that because everyone had been talking about it because people would come on t.v. programs like this and talked about the the idea of letting lehman brothers go bankrupt for several weeks and months are up to it happening that somehow we were prepared for it the idea of greece leaving the eurozone although we've talked about

it for many many months and although it's started to become something that politicians are allowed to say out loud i'm not sure we've really worked through all the financial consequences all the knock on consequences for the rest of the eurozone debt for what the global financial markets are likely to do and frankly what what will happen on the streets of athens when they realize that their savings are suddenly worth a fraction of what they have well it's probably not much more than they have right now right me if i can go to you there's talk about a new economic union within the eurozone did people vote for that or is it just going to be a lead to get deciding what the new economic union will be about if there was a vote taken in almost every country in europe at this moment they would vote against immediately in ireland that they've got scared and there is this moment in greece they're being terrified out of their lives when the re fundamental way the people of europe know that europe is

a failure very quickly i understood to be saying more austerity and i understood stephen to be saying that there should be more keynesian burring now i don't obviously want to come between these two who obviously think differently from what we. know austerity or more putting into debt. but you still want to find out in brussels go ahead sir yes i am living in brussels and i'm living in europe and the impression that all populations want to get rid of the euro is completely wrong and the french are afraid really germans are referred to as a scandinavian. tell us and even the greeks eighty percent of the greeks want to be in the euro zone because they realize that if they fall out of it they they are completely broke ok if you think you know me very well i'd like to stay with this show here stephen will give you the last word on the program what is

a political dimensions of all this you said that they will have some solutions maybe they will but is that democratic is that fair to the average person in the eurozone because the decisions are being made for them. they're being made by their elective representatives i mean one of the things i would say actually is that the politicians in germany the politicians in spain the politicians in greece. when when it comes to the negotiating table they push very hard i mean what's what you've seen with from spain over the last the last few days has been very good negotiating by their politicians they will need they will need help to bail out their banking system but what they're determined to do is to make it help specifically for their banking system they're going to ask they're asking germany they're asking the i.m.f. for money to prop up their banking system rather than to prop up the spanish government itself and that will be much better for spanish interest rates it'll be much better therefore for the spanish government's finances therefore they will

need to cut less therefore they're right gentlemen as a journalist absolutely fascinating discussion but we have run out of time here many thanks to my guest today in new york london and in brussels and thanks to our viewers for watching us here are to see you next time and remember. if you want. wealthy british style listen. to. market weiner scandal. find out what's really happening to the global economy is a report on our. you

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