good afternoon welcome to capital account i'm more in the store here in washington d.c. these are headlines for friday november twenty third two thousand and twelve budget talks have collapsed the wall street journal's matina status reports wealthier countries say there just isn't enough for strain in the plan so is this a sign of disintegration in the beleaguered euro zone or is this political theater one no one of the type we see so often in the us surrounding a budget or say raising the debt ceiling well ms devis is here to tell us plus mario draghi rattled off the e.c. visa recent actions concluding this. therefore i can address you today the big room it relates to reach can see them in approach which of the euro.

but is that really the case that we've seen a return to confidence or is the euro crisis team other headline grabbing news such as the us fiscal cliff just making it seem like the worst in europe is behind us we'll try to answer that and it is black friday q craziness at some of the nation's big box retailers inside and out. through. some crazy images in the last one were actually protesters outside walmart protesting what they allege are unfair working conditions will have some of your reactions to the protests in viewer feedback let's get to today's capital account.

if the euro zone crisis seems to be getting upstaged by seemingly newer crises like say the u.s. fiscal cliff or as we like to call it conor ria let's back up and take stock of the eurozone is back in recession another nation cyprus is on the verge of a bailout wrangling over how to get greece on track with creditors is still not resolved and talks just collapsed among european leaders trying to agree on a budget for the next seven years so in other words the e.u. isn't anywhere near out of the woods and it's also important to remember looking from abroad at the headlines coming out of these most recent budget talks to these are politicians needing to score political points so you may not be able to take

everything that you read at face value so to separate fact from fiction we spoke to me as a journalist for the dow jones news wires and the wall street journal who's been covering this all in brussels take a listen. joining us now machinist as a journalist for the dow jones newswires and the wall street journal she's been covering all of this. budget talks collapsed leaders failed to reach an agreement on the budget with according to your reporting wealthier countries saying there just wasn't enough restraint in their proposed seven years bending plan your there are you on a good feel for the politics and this sticking points to how real are the divisions because of course we hear about them but i don't know how real they are if this is just political theater and i'm saying that in the context of course here in the u.s. where we've seen debt ceiling wrangling and budget wrangling becoming the status quo kind of political theater there is absolutely political theater involved in

these negotiations i believe tony blair famously said that they were actually tougher negotiations than the ones he had to hold to to negotiate the northern ireland peace process so it really is the place those budget talks and remember their for seven years right it's a very long time. it really is a place where national problems political problems that leaders are facing at home plea out on the european level each of them comes wanting something some of the wealthier member states like you mentioned want cuts to the budget but some of the wealthier member states i would disagree among themselves about how big those cuts would be some of the poorest states and i can tell you for sure that most states are now poorer and really needing the money from the e.u. budget one to keep those levels of spending as high as possible for the next seven years because they stand to benefit real sticking point always has been for example

money spent on the so-called common agriculture a great cultural policy which economists and and several people around the world have decried as essentially subsidies for european agricultural products now fronts sees the common agricultural policy and spending on that as a holy cow. now but then old top of all of that you have britain and the british prime minister who has advocated for cutting way above and beyond what anyone else has so how do you reconcile this how do you bring these people around around the table and and get an outcome obviously they couldn't do it tonight and it looks like they're going to be reconvening early next year to talk about that but one important thing to note is they're under not a lot of time pressure so they're going to let this process drag out for a little longer ok so that i think that's important to note the political theater that you're talking about because it's easy with so much attention paid to the eurozone to go oh no talks broke down this is crazy but i guess i'm curious in

terms of the sense you get is there a sense in brussels with e.u. leaders that ok really we all just need to find the right terms for continued integration this is all going to work out or is there a real sense that they're kind of fighting against disintegration. i think there's a real sense here that eventually maybe after three summits it's happened in the past a solution will be found there but there will be concessions there is no doubt and that there is no doubting that we will not be seeing the kind of expenditure we saw in the previous seven year period that is now coming to an end and it really really means that the e.u. budget reflects the state of the economies of the european union which as you know very well isn't great the danger there is the cutting and the so-called cohesion funds the funding that goes to supporting the poorer regions within the e.u. which has helped what we call in europe a very very popular term what we call convergence so pooling up those poor regions

and poor countries to look a lot more like their richer counterparts and there will be cuts in that but the political theater is extremely important and for example david cameron the british prime minister that i mentioned earlier. needs for his own party's sake to keep his party together needs to appear to be very very tough with the europeans and he said coming in today he told upon his arrival what we're doing at home that's what has to happen in europe we have to cut unnecessary spending right and that's kind of the point that struck me reading the british press reporting on david cameron's comments where he's saying hey brussels is living in a parallel universe and he blamed the european commission essentially for the breakdown saying that they're insulting taxpayers by refusing to accept cuts in its budget or make reductions in staff pay or perks complaining that two hundred staff earn more than he did so i'm curious if those complaints have merit or if this is

just kind of part of the political grandstanding. i think a bit of both i think first of all it's important to remind viewers who look at this and think oh my god this is this massive. that stake the actual core of the debate is about one percent of one percent of the total e.u. economic output so we're talking about one percent of one percent it's not a lot of money that doesn't mean that it should be badly spends and mr cameron has a point that there is waste and we've seen every administration that there is waste and there is space to cut what he doesn't however mention that often is that the spending at the european commission which is the bureaucracy essentially is under seven percent of the total e.u. budget so it's really a really represents a very very small slice of the whole of the budget of the e.u.

that is currently under negotiation and as for the two hundred people that earn more than him perhaps he's right and perhaps actually i believe that is that is a fact that you mentioned and that may be something to address capping capping those salaries but really it is important just to be sure that we know what the context of this is it's a very small amount of money in the grand scheme of things a popular argument to make that it travels well traveled here in washington to our conversation to be sure and then of course he should be president mario draghi for his part we heard him talking about a return to confidence in the euro area. i just i don't know are you confident matina our markets confident because it doesn't really seem like there has been much improvement except maybe that people are getting distracted by some other more recent headline grabbing problems like the u.s. fiscal cliff. well i think first of all when we talk about markets and actually when we talk about our own viewers and you know my paper is readers there is an

element of to teach here is in crisis has been going on for three long to motorists exhausting years and it's only the potency of the crisis begins to evaporate as it becomes from acute it goes to becoming chronic and systemic and really deeply and set in the foundations of the economy i personally think that that's a bigger danger now is market confidence restored i think one thing that has certainly happened and actually mr drug himself has been instrumental in bringing that change has been reduction in fear is of a euro zone breakup instigated by a dramatic exit of greece from the common currency area here in europe i think mr drugs announcements over the summer and what happened over the summer the calm and we've seen that continue until now even though the actual problems have not be

resolved the problems with greece haven't been resolved ireland may be doing better under its own bailout but there is still a lot of work to be done there and it's a very vulnerable economy in its own way portugal a smaller economy also but still struggling with internal problems and then we get to spain already receiving a bailout for its banks and the big question will they also ask for a bailout for that for the country for the public spending and then there is cyprus which got truly annihilated by by the greek crisis because of the close linkages between the two countries and then there's the issue of you know you get two fronts and it's been downgraded as as we heard this week by credit rating agency and so we may not be as spooked by the euro zone crisis that may have to do with the fact that we're just really tired of it but i don't think the. that the worst is over in the sense that the cuteness of the crisis may be wearing off but the fact that the

eurozone is not growing at stagnating it's very very even in germany you know growth rates are very low that's something to worry about in the longer term. and more on how that's being felt on the ground in the quarter we hear about greece and how greek people are suffering but are germans are soaks in brussels are they feeling they euro zone's recession we'll hear from a tina status on that after the break also still ahead a tale of two corporations wal-mart where workers are protesting for higher pay versus costco where they pay their workers a little better we heard from you a lot of colorful responses insightful ones too you'll hear some in tonight's viewer feedback but first your closing market numbers.

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welcome back what's really interesting to note to not let you get by you is that as leaders in europe talk about dealing with these problems talk about cutting greece's debt load and they mold the options to get the bailout program back on track there are disagreements that persist on very basic things that you'd imagine creditors would be on the same page about qasem point this november thirteenth disagreement between junk laws younger head of the eurozone finance ministers group and the i am asked guard on the appropriate timeline for greece. hundred and twenty percent by twenty twenty we clearly have different views. thank you bill. but.

you know i could just as. i'm. twenty two. the truth. is that under his breath but he gave a different year for greece to reach its debt plans then christine legarde and no it's certainly not a job none of this is as matina status journalist for the dow jones newswires and the wall street journal laid out for us when we talked about the latest economic figures. of course and looking at the data that's coming out at the economic data looking at the euro zone in its entirety it is officially back in recession and we hear about the course slowing down we got the preliminary version of that p.m.i. the purchasing managers index for a market for november showing a decline in economic activity kind of a continuation of numbers that we see but again they are numbers these are charts

on paper that paints a picture of an economy that is not improving but is going actually the other way but what i want to know i'm sure you travel matina a lot for your work we know that people in greece feel the contraction they feel the pain because we hear about it all the time but i'm wondering if in france or in germany or in brussels if people are feeling this slowdown if they're feeling the recession. i think the the view from the ground is very much actually connected to the view that we see painted by those economic indicators that you mentioned so really what we've seen in the euro zone has been an uneven recovery following the kind of two thousand and seven two thousand and eight crisis and the on even assad it is very well reflected in unemployment rates and growth rates so in the euro conduces the euro zone we often talk about the core euro zone with germany's and the finland in the austria's and the so-called periphery now while the definition

of those two corporate three terms is is really not that clear so friends obviously would would be core but its economy as the economist weekly magazine pointed out a couple of weeks ago that gives us reason to worry about it that that that kind of attitude that we see in the economic indicators as reflected on the ground so you won't see the saying the same feeling on the street in the same confidence because so much about the economy is about confidence and the streets of lisbon the streets of athens in the streets of berlin or paris it's really not the same thing and. you know there's just far far too many shades of gray and the eurozone right now so while germans may be more optimistic and it's not like they're crazy optimistic but they have reason to be more optimistic than greeks it is certainly the case that in greece and in lisbon and in fortune go and in arland the mood is not a toll that and places like belgium has actually come out looking

a lot better over the last few months but even here people worry because one thing the crisis has done is show even to the ordinary man on the street how interconnected the eurozone economies are so basically like leg would you like someone would say you know when your neighbor's house is burning you have to worry about your own house too and so much of that hangs in the balance with discussion of the banking union which is very much still a discussion before we get to the nuts and bolts of one of the economies you're talking about when you talk about an event recovery and even lending of course greece is just been front page when it comes to the eurozone crisis regardless of how tired people are as it but you know how the news is is i know how it is that people want drama when it comes to the headlines and that is what greece has supplied i'm curious how much do you think it's distracting from countries like spain and italy perhaps benefiting them and buying them time politically to get it

together. i think it really varies is a very interesting question that you posed i think it varied sometimes the kind of the constant infighting over greece how to deal with greece's debt the drama in the greek parliament the drama on the greek streets have actually provided a distraction and exactly like you say and because no one right now is as bad as greece and obviously the market works in kind of comparative terms as well. other countries have benefited politically and potentially economically by the situation in athens in the rest of greece however i think it's a double edged knife and you really can't count on greece distracting anyone for a lot for much longer for example i think both the spanish prime minister and the italian prime minister might be on a holiday in muncie respectively have pointed out that the the insecurity around

greece and the lack of a resolution a final resolution but what will happen with this country is that in the eurozone or is it out have actually raised insecurity about their own countries and every elected badly especially in terms of their borrowing costs so the longer the greek drama goes on goes on for the worse these countries are fairing all roll on average because of this continued uncertainty mind you also the policy making process around greece and greece's problems has been so fraught and so slow and so incremental and so grueling that you know the rational participant in the market will look back at this and think well if ican deal with such a small country that is now two percent g.d.p. of the eurozone and shrinking what will they do when it comes to bigger countries what will they do when it comes to dealing with the third and fourth largest economies in the region which are spaceplane in italy and spain so i think that it

may be politically expedient just for a very brief. period of time to be fixating on greece because greece is dramatic by and large i don't think it does anyone any favors yeah and speaking of the muddling through speaking of the grueling nature of all of this especially with greece what is the deal with the deal to get who are the major parties that need to be consulted negotiated with in order to make changes to greece's cumulative interest payments on the national debt well i mean listen this is a massively multilateral negotiation it is extremely tough i covered the greek debt restructuring earlier this year and i thought that was a tough negotiation because it involved private sector creditors banks as well as had fun that involved all the countries in the euro zone of all the international monetary fund the european central bank and honestly i think that even removing the

private sector from the picture those guys can make it pretty tough for themselves just but just by themselves right now what we're looking at is this we had a meeting here in brussels last tuesday feels like years ago but but also it feels like yesterday because this week has just merged into one big thing that meeting was eurozone finance minister the i.m.f. chief christine legarde was here my dear that i get from the e.c.b. was here everyone sat around the table and tried to decide what they're going to do to restore greece's debt to sustainable level over the medium term. having arrived at that point. was a very big success because they couldn't even agree and i don't think this they have been quite yet agreed on what they define as sustainable. over what sort of time horizon we're talking about here but anyway they get into their room they sat there for twelve hours and at around five am they just rushed out of the building telling us and there were few of us brave if you sold left at that time telling us

that they had been reaching the. humand and they would have to reconvene this coming monday now we heard today that there will always also be a teleconference on saturday tomorrow to prepare this meeting and this for the conference will be with the participation of yours and finance minister and and representatives of the i.m.f. and really there is one big fault line between the i.m.f. which has very strict rules about that sustainability it's part of its mandate its part of its charter and it cannot be involved in bailouts and in countries that do not have the kind of guaranteed medium term debt sustainability and the rest of the euro zone but also each member state in the euro zone has different opinions and has different different interests and what should happen in terms of greece's bailout none of them wants to lose money they can go back to their parliaments and explain that they've lent this country so much money and eventually they're not going to cede back we're not going to see part of it back so it's

a really impossibly complicated negotiation that's been dragging on for a very long time however what we have been hearing which is positive is that there is now a few billion left between the negotiating parties that they need to figure out and people here today have been not beat as sol junk glowed younger the president of the year is in finance ministers group and also prime minister of luxury and i bumped into him in the building we were having the summit at and he said he was very confident that there would be a solution for greece on monday greece on the other hand for the first time says it's not our fault this is our creditors they have to figure it out for the first time in the two years two half years that greece has been the bailout program greece is causing the trouble. you heard or just a few billion dollars left you will see if they can resolve that on their conference call tomorrow machinist of us with dow jones in the wall street journal .

before we go this friday let's wrap up with viewer feedback because we got overwhelmingly interesting feedback on a topic we discussed on wednesday we contrasted wal-mart reportedly paying workers very little scrimping on benefits and as you know they protested today we compare that to costco which is another big box retailer which is known to treat employees pretty well and here is what you had to say on facebook joshua fabby on said my first job was at wal-mart and i hated that job the pay was bad the managers were rude and the customers just hated you i now work at costco and i love my job the pay is awesome the managers treat me awesome and for the most part our members are awesome to work for god bless costco so if this guy's. true if that's really true

what he says then i guess that kind of supports what we were saying on wednesday and there is that incalculable about treating your employees a little bit better we can't confirm that that is story is true but it we thought it was worth reading in addition we talked about c.e.o.'s delivering for shareholders as a reason for always cutting costs or not giving employees more money and here's what steve burke had to say my experience as an employee and shareholder is that maximizing shareholder value is a myth and a farce instead corporations work hard to maximize executive compensation we've certainly seen some examples of that work companies fail but still manage to pay their executives quite nicely even during bankruptcy we've seen that with hostess we saw that with m.f. global anyway good point moving on. kimberly badgett said that wal-mart is the master at shifting the cost of its products elsewhere to the environment to the taxpayer who is had to subsidize underpaid employees with medicaid and food stamps to the slave labor in china one has

a high social cost but the american public is good at ignoring the true cost of wal-mart's products nothing hits at home quite like the video that we saw today like this. no i didn't. know they sure were not to tear we deterred we will live we leave you with those images because that is all we have time for thank you so much for watching baser to come back next week and in the meantime you can follow me on twitter at lauren lester you can like our facebook page catch our shows on youtube or on who will come back on tuesday we'll have a debate between mike stead locke and peter seth but for now have a great night.

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