back here with us are broadcasting live from moscow let's take a look at times. square to celebrate the muslim brotherhood mohamed morsi is named the country's new leader but is the first post mubarak presidential old story . he calls an emergency nato meeting to discuss how to respond after syria shot down one of its fighter jets says the plane could have strayed into syrian airspace on a training flight. and the world's blower is waiting for his fate to be decided by ecuador after he asked for asylum in the country's london embassy at the end of may

the u.k. supreme court rejected an appeal against julian assange his extradition to sweden where he is wanted for questioning over claims of sexual assault. and my colleague will be here in about thirty minutes time with a full look at your news but up next peter lavelle and his guests discuss the future of the european union. leo for. the to. educate. students. at least say. hello and welcome across town i'm people of all what is the future of the european union will be a federal union or will continue to kick the hero down the road. led.

to. students just so. to discuss this i'm joined by theodorus he's consul general of the helmick republic in st petersburg also we have philip can't he is chairman and i'll tear investment in luxembourg and you're welcome permits he is co-founder c i o and managing partner at asset management. ha right theodore if i can start with you your country has a new government ok so you're right presumably your job is assured for a while until yes yes yes it's today's government today's government i'd do the greeks want more europe or less europe as a result of the crisis and we we all know increases the country that's been hit the hardest since the euro crisis started yes indeed greece has been the heart of this this was the first to be hit and to be very hard i have to say. now we had two

elections in a role in maine to june and that people vote at good will vote and. i think for the you will stay in you will and i think that this is a distinct unit if they vote for a stereotype as well are those two different things the no more or less it goes with it goes together it goes together they know that's thinking you know he's a difficult boss but it's a path for them for perspective in the future and that's why i think personally that. the decision that was taken several years ago to enter the you and the decision late and to the yunus on it was a very serious decision national decision is thirty six for us and that's why we think that they also the people who want to stay will it's very interesting you know. a lot of people have criticized the greeks because of the of their monetary and fiscal policies ok in the european monetary union but maybe the greats now can

lead the way we just heard from theodore that the greeks understand the austerity that they're going to have to deal with for greater union for a stronger european union with one currency do you think more people in the european union will say hey we're going to have to take a ten year ten year hit on growth is this something that's going to be widely accepted or is that still impossible right. well it will be quite difficult to make it understandable. to the people in the euro that they have to take the hit. but i believe that the prices that we're flipped through agree it's a significant. significant hint of what has to be done in the other countries to say you're saying the perception changes for the better while i think not for the better but but for the necessary steps to be taken. perhaps also in the direction of

a fiscal union ok oh but see that's what this program is about you have fiscal union you know if i were an academic if i were professor of international relations and finances it well it's off his they have to have a fiscal union i mean they have a monetary union in a fiscal union it's simple there's no monetary union in the history of the world that i'm aware of never they didn't have a fiscal union but the e.u. budget for a long time but you can't sell fiscal union by saying it's because we need it. i think that there's many europeans who like to be european some of the germans like to be more to be european than to be german you know history and i think very committed and keen to have a fiscal union and i think it's so humid you willing to pay for it absolutely i think so. really i would think the germans are having to pay for it i think the you know we officially complain about the greeks the spanish the italians having a big party but actually you have to admit the germans like to work hard you know german you know we germans like having their products spotfire you say well exactly we can only be working with the exports half if the greeks and spanish and italians

buy a product so the euro is a big program to help us export so it's not the case that the greeks have a party and we work is that we sell go to people say the germans go to greece they have a party a family you know but i think the way i see the crisis is that it will be the european union's never move forward without crisis as well and they will usually have to me this is one of the interesting fill in one of the interesting things about the integration process of europe leading to the monetary union has always been through a crisis but each crisis is a lot more severe ok in one nine hundred fifty eight to war everybody you know no one could export their goods with european countries so they think establish the common we become in trading area ok that was a big political decision and it was very very good decision but each crisis gets a little bit more worst than this once fundamentally the worst one. is this something that is people can be aware i mean do you want to employ if you lose your job you lose your prospects can you intellectually say yes this is the crisis that

we have to you know really square this or. fortunate thing is that the crisis became bigger the impacts of the crisis are more severe from from one crisis to the other and if we have an unemployment of fifty percent than in spain then under the u.s. that's already much beyond everything what we have seen so the question is how long can the people in europe endure see this crisis before i should greek state which we you know there's a lot there's a perception that a generation has been lost in europe and in spain and in greece unemployment for young people is extremely high how long can they wait it out or they just leave and come back during better times i thought those days for europe were over. i think that a place for great good people can wait for the better future i don't know how many years this will take i don't know if you as you said it's about a generation but you know people do come out of the austerity program certain very

strong sacrifices and just let me tell you just two numbers not to take up your time from the public sector one hundred one hundred thirty thousand people out of the public sector and two thousand and fifteen would be one hundred fifty more now had three but thirty percent reduction of the wages in the public sector and we have also ten to fifty percent reduction in the pensions and we had also almost one hundred ten professionals let's say close to officials opened with a little ok you're a spokesperson you know i just need to tell you is that this is how you sizes in greece is this is the real thing is taxation this is another issue which is very very strong the efforts well made not sufficient should be made ever more but tax is also one of the main main pillars of this effort where thing because. when you see people stuck if eyes into the numbers that i mentioned before this means that they want to get somewhere and this is what we need to hold about these nobody

really knows. how much time this will. have to say there isn't a lot of time a lot of people think you are right that there's a need for a vision i think it's very painful to wait and wait and wait and i the way i see the vision is actually the vision of a human to the team of germany which says you could actually if you move the european economy to a new model of the circular economy up to take consumers throw away and pile to me where you really have to circular you can actually save some six and a billion euros already today. you could have solar power produced in italy greece saying there's a record now a new solar power plant at six cents per kilowatt hour that's even less than in russia gas gas fired electricity costs so there are ways of getting out of this and i think just austerity won't do this we all these are political will to do that i mean somebody thought that we you know if we look around the world look at major countries everybody knows who's president of russia everyone knows who's president of the united states people know who runs the u.k.

who runs you're it. well i think there's a finance minister a very. big leagues going to get all right all right fine you know we just thought you know what i'm talking ok i mean we're is the very who leaves here because what over the last two years we've seen eleven twelve governments in europe fail these people don't have the answer apparently ok and we have flip flops we have going to the left going to the right the way i think that's the difference between in the germany for example this change foreign minister it's a stuff that could tear the sides of these in place for twenty years and read the same policy does not i was and how up front i think only matters that mattered merkel said so to. the chancellor merkel. that's who counts. in machall and and so i can see we're together now that i can no longer agree to increase the capital of the european vestment bank and that increasing capital can go to major infrastructure projects if you look at for example. you know high speed

rail connections in europe they don't exist in moscow peter book is better than say frankfurt so there's a lot to be done and lots easier if we do this again i think everybody would agree all these things have been but who can do it ok ok there's the european parliament which most people in the they are represented in the european parliament you do not know who represents them there ok i'm sorry it's not a real parliament yet it's got a long way to go we don't have a real we don't have a real president of the european union we have figureheads ok we did how do we get that how do we square the circle is there because a lot of people say there is a democratic deficit in the. yeah let's not forget that the european union is a political union apart from that this kind of the monday union the main thing that is a political union has its efficiency and its run. if i may say it's run by twenty seven governments which gather and. decide all together that's not the old that is not

the united states of here visit here last night you know it when the several governments have signed the treaty for sort of diety and cohesion both are very important not just a little bit but have also tried to be coherent with the rest of you'll try the whole show that i want out of a crisis when you're trying trying to talk oh here. well i think you will come back where we started i mean it's past crisis you know to come to a higher conviction of institutions to be a selfless. how do you do that while you try you know no no no i'm not trying to be facetious here ok because when you look at the united states had to fight a terrible awful civil war after being established for almost a century what ninety years ok we don't have a lot of time here now and the problems of people are very well aware of the law

here but i think we have missed the battle so of course as in germany when we looked at the king we didn't always elect the kaiser didn't always elect the strongest stuff so but it is the battles that's clearly understood for example that ninety percent of growth the next decade will come from outside the e.u. we have a clear policy in the european union for example to work with russia on what's called the modernization treaty and that will give new companies access to a growing market you can also have a new economic model which the commission is no looking at this is the circular calling me which was what was going to jump in here we're going to go to a short break and turn on the break we'll continue discussion of a new european federal state. and you can. still be. there hasn't been anything yet on t.v.

. it is to get the maximum political impact. the full source material is what helps keep journalism honest. we want to present. something you know. just give me going to speak with you soon let me then use plain my son died in iraq i don't agree you don't agree we don't have to look for other names. my son isn't isn't in the arena i don't know what his craft we are going to try before you share . surely a country. with a country which. can help you claim it. in so many ohmss war. and meet some slows down.

the east. to. it's just simply. just so. if. it's. come up. with the books to keep the system six and six.

weeks. hello and welcome back to cross talk i'm about to remind you we're talking about european federalism six and kicking six. you'll find if i can go back to you. you were giving us a historical example of how this might work ok but at that time democracy as we understand it didn't really exist we still have a really powerful elite how do how do europeans address this deficit of democracy because there is the perception the perception that it so then czar cozy and merkel chums came together and made some decisions ok maybe they were good ones maybe they were battling to do to people. ok and a lot of people who are there others would say it was a partnership of one and

a half and you know there was that what people said about how do we expand that but you know i think one firstly would have direct elections of the president of the european union have direct competition i think that's a possibility you could also i think the parliament is actually working more or less we have a more less mobile parliament there is still stuff travelling all the time and the travelling circus not very helpful. i think the commission gets stronger but the finance minister almost there i think a very old they're not almost there there's no fiscal union fiscal union the most important thing a fiscal union has the right to collect tax not from individual sovereign states but direct ok who's going to organize that where is it going to be going to be in berlin it's going to be in vienna it could be in brussels it's going to be an anchor who decides. it's already in next well i think i think germany will have a major say in. that that's to be expected but on the on the other side. you

think how do europeans feel about that about germany germany leaving the powerhouse of europe right now in for work for germany we'd be in a recession cross here to certain extent it's also expect the from germany to take the lead to show more presence on the european continent. and that's a very difficult thing for germany to step out of its historical role. because up to now you're in the confined itself to zone territory and that's also perfect for a while but it's expected if you look for example as you call this initiative asking for a journey to the yes yes you have the spin and it will not be not long before that fast reference reparations which was kind of a ridiculous thing to do you know this is i was a professor of modern european history and i mean germany has a very important unique role in europe right now but at times it's damned if it does damned if it doesn't ok because of history. germans have done very well the

german economies and very well off the euro lot of people forget that there's always this you know the greeks did the wrong thing the spaniard to the wrong the italians had the wrong things but you tend to forget who has benefited very much from the euro where just too many stand on that health far will go because we have a lot came to power we want growth goes out affecting merkel in her perception of the entire european i mean as i said my my view would be that. it's time for some new new new ideas one idea was because germany had for one war second war so it was the only way to deal with the somewhat unstable governments to create. the european union. that was sort of to the west that we did something similar like that to the east where the moment really poland slip away quite nervous about germany and russia for example one project in the east would be to have hypo high power voltage lines connecting russia to western europe and have common institutions of poland then you have a growth area and if you have

a new approach to the economy then you have a growth area as far as germans are concerned how far they're willing to go i believe germans very much want to see. the benefit they have to we need we benefit for free trade we benefit from human rights and benefit from the american democracy was all imposed on us we didn't become democracies we were made democrats we only example in history maybe japan i can think of where it actually works. that's a different program but this is so so we're very happy to have it i think we'll pay for it that's fine. but i'm a nobody really doubts about the leading role of germany as a super economy i like knowledge but there's a belief or utopian you know you still don't know what will happen if you two in the near future still i've been in the governmental you know level and you see at the political level every think martyrs you see seven of using you up and you saw after the elections in france and june of elections in company in greece how much discussion political discussion took place in the cool of you will so i think that

even the smaller nations like least media small nation we did debate you know that has during elections off the elections all without any kind of elections can mock to the whole debate in europe so that's why what i believe before that it's this all together i mean is a just society philip it's because of an assessment because when mass trip was passed when other treaties and house it was the political project was an affront it was about the me the monetary union and how it would work ok have as europeans been tricked into a federal union pension will federal union because nobody signed up for that in the beginning and everyone was very skittish about how political would be we would still have berlijn we'd still have paris we'd still have london etc etc now you're telling me they were going to europe will have to build a separate new city somewhere to show some kind of neutrality i don't know but the thing is that when european integration started after the second world war maybe in

the in the genetic code of the founders political union was the ultimate goal but it was the people were told that the how do you feel about it being forced upon you because of necessity and that's not necessarily democratic it's really difficult to understand the european integration process as a. steady pro. so you know that we really need to process it to come to different level of conscience works or hope needs to be done and i don't think that when you look back that there was a constant planning process not because it was and. perhaps a big mistake you know to introduce to europe before there was. a better form of a political system within the year. but i'm not so sure i mean. by nationality you know you're a skeptic the angles next few of you will be the skeptic you found we are ok. it's

just always always that there's a problem in europe of that when you have any problems i mean we're suffering out of a high level in germany you know the list asking about is working and everything is working when it was you have a less growth i mean i see this painting greece but also suffering greece at a very high level when thirty percent is our own you coming from a level twenty years ago it's unbelievable how wealthy with this we come after the big games i mean so i don't think there's a i think the solution is very simple once you have the fiscal pact the e.c.b. because then let no teams hope for that or you wouldn't have just governments and leaders meet in maastricht again and say this is what we do sign the papers and we have a fiscal union is that what the europeans want is not fair is that process fair because they think they're safe that perception that you have a very small need is very well connected to the banking elite excuse me gentlemen ok banks are being taken in all this i mean the perception is very important i

think like a point on the program i think we all know what the solution is how do we get through this except if. but i think this is what people would vote for fiscal union because they want to see a stronger europe they say they understand that greece or even germany and germany is the village right the eighty million people speaking german that's that's nothing it's a joke it's a little village like aslaksen open access like nobody out of eight million people soon as just a mere percent of the population german is an x. and forget about it we can you know you know less and less so we have to be a powerful nation play a role we have to go multi-polar world to avoid people playing sheriff in places either side of the atlantic yes and so i think people move out of this community and we have the finance minister and if we get fiscal union what will be a general staff of the european army are you guys going to go out fight wars. well that's so. there's a maybe that's only on your realm there but i mean fiscal union has a little tough economy becomes with a lot of time i agree with you i'm right here because it does create

a lot of responsibility consequently yes in the end in the end you will have all the attributes of the state which for us i know the source of money every day we are spending i think five times more than we should because each of us has only lobbies just got rid of all of the i mean think we got here just found out for example heroic army stopped the tell you this in world war two yes and made and allowed the victory of the allies because the division of the of the nazis into ansel's to do was to use italians would move forward so a small army could be very effective but there's no need to to replicate everything yes that's what i mean we haven't came between is there an appetite to be a global power and i think everybody wants to be a white house for what it wants and you want to be prosperous you want to be safe but you want to be like the united states of a more powerful than versus already united states is a bankrupt became us economy missteps along with the united states has more of you another program the. economy is looks today like russia looked at ninety eight it

has huge debt unsustainable pension deficit health of the visit everything of a citizen of european union going to let us know yes but actually people say you know they are you know that's the u.s. propaganda machine how do you think that's turning the focus onto greece don't you know greece is committed to europe we don't even if we sort of live is not going to be big deal to european union the problem is in america the focus of the global attention is europe probably that we don't have any problems to have a fiscal union is the very thing as the finance minister sits in luxembourg the e.c.b. is then the last resort we'll get rid of all the military expenditures we have with move to infrastructure that makes sense we finally work with russia life we could take it all in this is my passport to the united states of america would you like one that says united states of europe. we don't have any way you know same no i so it's not a fiscal union it's not a federal union we have a long different and totally different let's not forget that you'll always be as a form of whole issue of defense right and the way to has external service european

external actions said it's a diplomatic service or you look this is steps all close to thoughts closer you and i can of beans i can close here gentlemen thank you very much for a very interesting conversation and thanks to our viewers for watching a few darkie and remember crosstalk. stewart. well. science technology innovation all the least of melanin from around russia we've got the future covered.

why russia would be so much brighter.