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laura smith interviews economist roger bootle he won the prize for developing a practical plan to dissolve the euro zone that's our in-depth interview coming up in just a few moments. today i'm at capital economics talking to roger bootle he's the head of the winning team and the wolfson price which is the competition to find the least disruptive way for a country to exit the euro logical thanks very much for talking to us now this wealth in prize the competition why was it important to you to put together such a strong and treaty i was fascinated by the question that lord will some posed and as i thought about it i quickly became aware that no one of really satisfactorily even i think attempted to survive and i thought we could learn of also what was contributing quite a lot in trying to answer it and that's what we did and talk me through your

winning entry very briefly country wanting to leave the euro must prepare a plan in secret among a very small group of senior ministers and officials pretty much as soon as the plan is agreed it must be enacted in order to prevent news leaking out the banks will have to be closed over the relevant period which is probably a week and during that period capital controls will be in place almost say the friday night it will be announced of the people of the departing country let's call it greece that from then all all the amounts that were in their bank accounts their pensions or whatever their wages prices which were formally expressed in euro's were now to be expressed in drachma as and we suggest that the conversion rate between euro's and direct must be one for one now a lot of people get this mixed up they think well in that case what about the exchange rate on the exchanges there's no connection between the official

conversion rate and what the drachma trades as and we're pretty sure it would trade at a much lower rate probably around one of the perhaps even two to one against the euro and then the banks open again on monday. well tuesday people putting their cards into a.t.m. so they can get euro's out of their bank accounts which are now expressed in drachma thing only get those out at the exchange rate rules now between euro zone the drachma because now they are trying to treat it as a foreign currency and this way they're not going to have notes and coins available i think a lot of people got fixated on that we argue it doesn't really matter for the overwhelming majority of transactions particularly business transactions they're done electronically anyway and people use cards debit cards and credit cards they continue to do all that only when they use them it's that they're actually transacting for small transactions that require cash then gesture as greece carries

on using euro's until new track when those are available but you raise the exchange rate at the new one on one parity with the with the drachma well what will tend to happen is that a price system will develop because people will know that. the same as euros although they've been converted one to one right they'll tend to be a different price for euro cash as compared to. credit or direct debit cards and that will be to some extent messy but it will be perfectly practical there are a lot of countries in the world operate to do currency into pricing system and this all sounds very simple and in times of in terms of will people using real money are there other complications the kind of macroeconomic level well there are huge complications and problems on one of the biggest is going to concern the legal position because what would happen at the point of

a greece leaves the euro is it would read to nominate its debt its national debt into the drachma. now as far as domestic greek residents and. not going to have any come back home but change is going to stand in on the great lauren green calls that are going to be all sorts of contracts involving non-green this is where there's going to be a lot of legal argy bargy because let's say a german creditor for the sake of argument is not going to want his asset converted into drachma and he's going to argue that the contract was framed in euro's it should still be in euro's and in greece they're going to say oh no it's now in drachma and so they're going to be arguments the courts could be heavily involved but the scope for that could also be reduced if you were his own government's reach an agreement on all this which i think they probably would then have to lay down guidelines under which. a contract would be interpreted and dragged in which

would be in your rose and that would minimize the scope for legal argument the other major issue is not just complication it's a reality is that initially this is going to be very far from a magic wand when the drachma falls on the exchanges the price of goods and services in greece is going to go up possibly by quite a lot so initially living standards are going to be squeezed far from bringing relief to the order great person it's actually going to make matters worse initially however going forward things are then completely transformed because in a flash greece is more competitive not the grinding deflation they were ten or fifteen years but instant pain is li greece is forty or fifty or sixty percent more competitive than the demand for greek output is going to take off that doesn't happen overnight but in a matter of months that will happen greek exports will start to rise greek imports will fall and that will generate employment and more income in greece so there's

a trade off a difficult period to go through first of all in order to secure later greater prosperity so if you compare that situation to the austerity that the greeks are now facing which. would you say it's a better plan i think there's no doubt that greece in my view needs to get out of the euro i cannot see any way in which this current policy of austerity is going to bring any relief or slow the rising process of trying to. take a decade or so to our credit freeze very much more raises the real value of day to greece and the weaken members of the euro face not one problem but to their own competitive costs and prices are out of line with other countries in the euro and they're also saddled with very high levels of debt the problem with domestic deflation is in principle but the very badly but in principle it deals with one of

these problems namely the lack of competitiveness but at the cost of making the other problem debt even worse and what we're talking about is countries not only greece but possibly other countries that leaving the euro off to that your file seem to fear the breakup of the year is there not some kind of ahmed getting do you think that's where listed as well i think they're right to fear the breakup of the euro zone because. if greece for instance were to leave obviously we don't know how it would all work out suppose it's possible that the rest of the euro would then together but i doubt it i think if greece leaves before very long of us conses countries will leave as well and where they end up probably with the peripheral countries possibly all five of them say portugal italy ireland greece and spain or outside the euro possibly even joined by problems with some northern coal remaining so in terms of thinking what might happen i think these people are absolutely right with regard to the consequence is that i think they're completely wrong in the

sense that you have to ask yourself when the leaders of europe have to all stem cells how can you imagine prosperity and stability for europe under the current setup was. is the mechanism through which countries are of the moment malard in not just a recession but frankly a depression through which those countries can regain prosperity economic growth and stability i wish they could tell us something along because all i hear whenever they have a summit is they keep banging on about various forms of debt support and never about economic growth now i do think it's possible to imagine return to economic growth in the current setup by contrast if the euro breaks i can imagine economic growth so far from being a disaster i think it could be the major step that leads to the restoration of growth in europe and what about these attempts to shore up the very same that we've seen recently another bailout for greece cheap money flooding international banks from the e.c.b.

they going to have any effect well i suppose it's possible to keep the whole show on the road that way if the northern countries are prepared to carry on shoveling this money into the southern countries although i frankly i think that there will come a limit because eventually the sums involved are going to be absolutely enormous and voters in the northern countries will say we don't want all this but even if the continued shoveling of money does take place which keeps the show on the road again that doesn't actually bring economic growth in the self all it's doing is preventing a financial collapse whereas these are countries that have undergone a very big drop in output and they've got huge levels of unemployment and is what we're seeing just purely a kind of fight between politics and economics is the reason that i'm going to michael for example is so desperate to keep the year is a together because it's the major political project that germany has implemented over the last thirty years or say i think the politics of the economics are really

very closely intertwined and it's often difficult to work out where one stops and the other begins. i think you have to appreciate the european elites didn't have a pretty firm grasp. of the economics from the start now i think they're getting the economics completely wrong that's to say their opposition to the idea of their fear of the idea of euro break up isn't just about the politics they think that the economics point very strongly that way as well because they fear the financial chaos that would stem from the euro breakup and they don't see the benefits to economic growth so i think they are opposed on both economic and political grounds and we talk a lot about about that the collapse of the year essentially but all through this the currency has been oddly resilient hasn't it only really winding down now from quite a decent race against the dollar what do you put that down to i think this is a really big puzzle quite why the euro has been so strong there are reasons that

one can put forward or are not completely convinced by any of them but one thing the thing to bear in mind is foreign exchange markets on the tourist the short side of the argument against the euro has always been that essentially it will collapse through the voice of its own contradictions as to when people trade on able to world exchange markets tend not to like to bet on things like that you know something maybe next year maybe next month maybe in five years time it's not a really very solid thing to go on then there's also the question of what form the euro might take if it survives because it will we could countries leave the eurozone arguably the euro's going to be a strong currency so very far from selling if you thought that sort of breakup was going to happen you ought to be buying it if the euro does become a current seed that applies to many fewer countries will it still retain its attractiveness for investing or are we looking at a return to tell the gentleman nation for example oh i think that the euro could

continue to be a very attractive currency indeed for many people it might be even more attractive if you could imagine what's going to happen is the departure of the weaker peripheral countries portugal italy and and greece. by. perhaps even problems that the euro is as it were great to dodge markets germany and its close satellites and it's going to be rob that car currency area very much as he will be the way that germany used to be right under the doj law and accordingly i think investors will like the currency really very much thank you very much. wealthy british style sun.

market why not come to. find out what's really happening to the global economy with mike's concert for a no holds barred look at the global financial headlines tune in to kaiser report on our. goals started here. for going global and. it's cooling my role. law again. choose your please take your stand. to. make your statement. spread the word.

through the long. top stories this hour on r.t. turkish and saudi fighters are said to have been captured in syria helping the rebels fight against president assad meanwhile a new twist in the conflict civil servants of finding themselves a target for simply working for the government. three years behind bars that's the demand of the prosecution as the trial of the headline grabbing pussy riot has draws to a close in moscow. to communication satellites and lost in space after a russian rocket failed to place them into orbit on monday now pose a threat to other satellites as well as the international space station. but with more news stories of the news team in fifty minutes from now in the meantime we have the latest up to the minute olympic sports news with paul.

thank you very much bill welcome to the sports headlines here is what we've got another to the tally on day eleven seventeen year old stuff or not as a bronze medal to ever increasing titles at the london twenty twelve olympics. gearing up on the greens tiger woods on the world's best prepare for this weekend's the p.g.a. championship the fourth and final major on the calendar. so often horse power combined once again at the russian surfing championships. but first only one place to start and day eleven has brought russia's eight gold medal at the london olympics it's come in synchronized swimming with metallic start

line out of machine or climbing gold in the women's chouette russia continuing their dominance in a sport that usually provide his fair share of medals the schenker and russian of big spain into silver and china into brawn. meanwhile russia's most successful athlete at these games earlier mostafa has added another bronze to her list of titles she finished third on the women's floor event having won gold on the on even bars on monday she also won silver in the team all around then to the bronze in the individual however compared to that victoria come over again came up short of the podium in the florida. could be that medal success for russia surely areas a couple of qualified in second place from the semifinals of the mainstream media springboard diving competition he's going for gold right now and is currently in the silver medal position. russia is a female a volleyball as well leave without a medal however they have a six match points in their quarterfinal with brazil but failed to take any of them

eventually going down three sets to. also disappointment for russia's female high on the ball as they've suffered a heartbreaking twenty four twenty three defeat to the republic of korea also at the quarter final stage. well elsewhere on monday there was plenty of medal success for russia although disappointment for legendary pole vaulter you elena isn't by over andrew farmer reports. russian pole vaulter failing to make it in historic three olympic golds in a row having to settle for bronze after failing to clear for me to seventy five the u.s.a.'s genesis did make that height to claim gold ahead of cuba's silver by own standards the russian will be desperately disappointed before the game she did say this would be her last competition bringing to an end incredible career for the former olympic and world champion who has set twenty seven world records but while she was struggling did light up the track in the women steeplechase the russian

claiming gold with a personal best of nine minutes six point seven two seconds the fastest time in the world this year adding the limpid title to her world and european cranes and there was a bronze for you kenya in the women's shot put as de obstacle to work from belarus got the gold elsewhere there was a second gold in two days for russia's greco-roman wrestler's this time is alan cool guy if he isn't in picture beating egypt cutting you put him in the final of the eighty four kilogram section the russian is ranked number five in the world in his previous best was a silver at the european championships but he showed a real step up in class to claim gold in london while saw quite a game of golf got bronze in the sixty kilogram section finally the fallout from russia's poor performance in the shooting continues the head coach had resigned in ny the head of the shooting union has said there was a bad spirit in the camp we had little. but i must admit psychology was a factor the team spirit was far from good we have a lot to do this respect however they give their all of the olympics and i am proud

of them all our team are still one of the best in the world we were very close to claiming much more podium places but luck wasn't on our side too. well let's see what all of has done to the medals table russia of course notoriously slow starters after limping games are working their way up the table now to fifth place having leap frogged from the top four remain as you were in china the usa and great britain leading the way. staying on the olympic theme and serena williams says she has no plans to retire after completing a career golden slam she's now won all four grand slams plus gold at the olympics in singles and doubles they say after she beat maria sharapova in the most one sided fine whatever the american says she intends to defend her title in rio in four years time. right now i feel like i'm competing with with everyone else out there pretty solid. i feel like i belong i'm not tired i'm enjoying myself

so much. i don't see indrani. i plan on being there. doesn't allow me to. be there. while elsewhere in the premier league side arsenal have strengthened their ranks by completing the signing of spanish midfielder santi cazorla a twenty seven year old following in the footsteps of alleviation everyone lukas podolski in arriving at the emirates this summer the spanish international helped his country to success at the european championships in two thousand and eight and two thousand and twelve a versatile midfielder who can play on either flank so as his arrival from la liga side malaga is a huge step forward in his career he's agreed what's being described as a long term deal for an undisclosed fee. meanwhile the cream of the gulf in krakow gearing up for the p.g.a. championship this weekend the world's top one hundred three players and over one

hundred fifty in total aiming for glory in the final major of this season stifling heat on the possibility of just the atlantic winds just some of the challenges tiger woods has to contend with if he is to win. his first major since the two thousand and eight us open while grand always aimed at his first p.g.a. title in almost two years and a second major championship to the twenty ten u.s. open trophy well number one luke donald however has never experienced excess at any of the big for the englishman though clearly with his homework done on the south carolina course. it's a great golf course. you know reserve where you have to last week akron feels like it's reasonably generosity you know if the wind doesn't blow like it was pretty mild today with in terms of wind conditions it's does give you some opportunities greens are perfect you know it's very typical pete dye lot of ray's greens a lot of fall off so he missed screens is going to be tricky. and finally the

second russian wake surfing championships were held in moscow over the weekend plenty was at stake for the adrenaline chases not least a trip to the world finals nick like charles takes up the story. it was bound to happen sooner or later surfing with the help of an engine this elixir for a new sport is the lights in france here in moscow wakes up in the new heat among lovers of wool to schools with waves it's a premium throughout most of russia riders must make do with the ones they create themselves by the help of a boat after getting up on the wave using its own rope so it was then discovered and it's him to ride the wave in the fashion reminiscent of the sport's more famous cousin while the president of the russian wakes up in federation sees the new style is certain to be a winner among watersports innovating as the amount of participants our supporters as been growing everything it will get and that is the objective of our work so will continue doing as championships every year by the trainer athletes and improve the level of competition which i believe will make things even more exciting never

you. co-hosted the second day of a russian wake surfing championships as well as handing out medals the aim was also to produce more professional roy it is as many contestants were only starting to get to grips with the sport but there were plenty of experienced where it is keen to show off a skills one of them and us this year in the world who came third at the fourth annual world championships in arizona last year. last year i went there without any expectations i just wanted to see the real world championships to get to know the world's greatest writers so i could talk to them and watch their talk last performances and what lisa glee that was mangled but i managed to finish third as well.

that was another of the country's top performance young the gloom millionaire who was crowned queen of the waves was like a quote from harley erin was in no mood to relinquish his crown when in the main start so for the second straight year so through and spills aplenty as the russian foreign minister come to a close the next stop for the top riders here though is the twenty twelfth quake surfing championships in arizona that's where the best of the best will gather to do battle for the sick and the running nicholai chills i see most of. that is all from the world of sport for now but there's plenty more later here on out in the world weather is next followed by the headlines with the.

wealthy british style. that's what i'd like for. markets why not come to. find out what's really happening to the global economy with max conjure for a no holds barred look at the global financial headlines tune into kaiser report on r g. nuclear fashionable heights inside. radioactive

fallout all government betrayal of the government. and law and laws and claude how can the truth be revealed if there's no official evidence there was indeed a very great danger to the servicemen concerned who were given no problem protection and to the people of this country generally because of the radioactive fallout. the secrets of the u.k.'s nuclear tests exclaims.