and monetary union, a banking union, followed by a fiscal union. >> christine lagarde warned that the imf believes the world economy will continue to weekend, it would cut its growth forecast in its upcoming global outlook. >> in the market here in europe ended the week on a sour note. investors are concerned about a slowdown in the united states after it posted weaker than

she's pushing for europe to integrate even more by completing its monetary, banking, and fiscal union. >> are we safe for today -- safer today than at the time of the lehman brothers crisis? i would say not quite yet. >> christine lagarde said banks should be financing the economy and helping to stabilize it. she criticized banks that failed to reform following the lehman brothers collapse in to douse any. the imf had praised efforts to deal with the euro crisis but said the work is far from over. >> from the imf perspective, we believe that more needs to be done in order to really complete the architectural job of the eurozone. and monetary union, a banking union, followed by a fiscal union. >> christine lagarde warned that the imf believes the world economy will continue to weekend, it would cut its growth forecast in its upcoming global outlook. >> in the market here in europe ended the week on a sour note. investors are concerned about a slowdown in the united states after it posted weaker than expected jobs growth in june. our correspondent dorothy holtz has more from frankfurt.

we think fiscal union is the next step they need to explore.ne step at a time process is annoying, it's disconcerting. we would like more to happen more quickly because that's the spirit of the time, to move fast and absorb and digest before we have even swallowed. but that has the way europe is billed and done all the time. if they do that banking union before year-end and if the next step is to put in place fiscal union, which at the end of the day should give rise to common fiscal policy, agreed upon objectives, maybe one day one single debt agency for the whole of the euro zone, maybe one of these days, one single minister of finance for the whole of the euro zone, well, that would be -- that would be terrific. it's not going to happen overnight. it would clearly take that monetary union towards a much more united territory. >> and one of the biggest risks for countries like spain and italy are the escalating costs, in terms of borrowing costs. is there a role the imf can play in terms of being a policeman, in terms of keeping rates at a pr

and the four president's report goes into some logic of banking union, greater fiscal union and politicalnion. if you want a single currency and doing well, you need to do at least some of these things. if you would like remorseless democratic logic, it's very difficult to do these things. >> should it be the british assumption that that is how things will go and we should be planning what we do not under the assumption that it's going in that direction? apparently, yes, because you can see the moves toward remorseless logic and towards banking union and moved towards some fiscal union. it is difficult to know exactly the direction the euro zone will go. that's why i said yesterday we have to show a strategic and tactical patients about this because momentous things are happening in the european union. countries have to make difficult decisions. it's not entirely certain to be sure how they will go. i assume they will take further steps. you could think of it in three different ways at. you have the first option, very rapid move to integrated euro zone, to clear a long-term uncertainties.

the end of the day, if germany end up recognizing a full fiscal union that means that you need to see harmonization of yields across germany over time but initially the safe-haven trade end up gone. >> where would those yields go? where would the money outflows go, josh? treasury? >> that's the points. we're seeing them in treasuries. we're seeing them in australia. we're seeing them in the pound or in the gilt market. i continue to expect that we'll see them throughout parts of asia. and i think that that's already begun certainly from a central bank diversification perspective. >> will, back to you. >> hi, josh. when we look at a lot of the investors that you have in europe, let's say we take a lot of the united states companies, we have sovereigncy coming down the pipe in 2014, a lot of types of these large investors tell what type of currencies they can hold their investments in. we have the fiscal cliff coming at the end the year. i hear you on the risk for germany but there's a lot of constraints on where that money can go to. >> be careful. >> you're talking about germany -- yo

we think that fiscal union is the next step that they need to explore.he one step at a time process is is noiing annoying, disconcerting, we would like more time to digest. but that the way europe is built. >> and of course the ecb meeting this week, what would be more effective, lowering interest rates or expanding their asset program, their asset purchase program? >> what they're generally vocal about is the interest rate, that is talked about. we believe at the imf that the ecb has room available in terms of the monetary policy and could actually use it. we're not sure that this is the best channel at the moment, because germany doesn't need the lowering of the interest rates set by the ecb, but italy and spain do. so you can't disassociate when you use that type of monetary policy. on the other hand, the purchase program is more selective and can be used in a different way. >>> what about the u.s., you're out with a report talking about the risks of the u.s.? and there are some real heavy risks in terms of the possibility of going negative. tell us w

they need to move fiscal union as well which will take probably more time, more summits, more delusionand elusion. they're heading in a new direction together. that's a clear sign that things are changing. >> woodruff: one of the things that people have commented on is germany seems to have been more accommodating in the past under chancellor merckel. the question is, is there a new dynamic with the president of france and the role he's playing? how do you see that. >> there's clearly a more focused on a balanced approach which fiscal consolidation which is happening in the euro-zone, when you look at the fiscal deficit in the euro-zone that's in the average about 4% at the moment. and moving in a direction of being under 3% in the next couple of years. and growth. that's a new dialogue that they're having at the moment. consolidation, yes. but growth as well. and the whole of it is put into a large he project which will take them further. monetary, banking and hopefully fiscal union later on. >> woodruff: one final question about the euro-zone. people still worried about greece. can t

independence surrender their birth rights and give it all to a super bureaucrat to push on to a full fiscal union to a full political union indeed to the union that will be absolutely dominated by germany and by some magic formula giving away control of everything to one person will solve everything. faces strong backlash in the homeland where some lawmakers filed some lawsuit saying that the fiscal pact intrudes on the powers of german deputies and a grassroots level of german people who drive the economy are unhappy about giving bailouts to other nations as well but his accent a boy who has this report. it's a job interview with geopolitical implications and jess is family has been running these greek restaurant for almost three decades ever since they immigrated to germany hard work and self-reliance made it a success but now they are under increasing pressure to share the fruits of their labor. the problem is that in greece that think in germany that. they come here and like the money in the street but we're also working very hard. working from the morning till night every day they get a doze

independence surrender their birth rights and give it all to a super bureaucrat to push on to a full fiscal union to a full political union indeed to be a union that will be absolutely dominated by germany and by some magic formula giving away control of everything to one person will solve everything. regardless of merkel's ambitions for the european union in her homeland burgeoning opposition to the country's bailout policies for those who believe germany's financial fortunes are down to good luck other people driving the economy have a very different message as artie's walks on a boy car reports it's a job interview with geopolitical implications and yes his family has been running these greek restaurant for almost three decades ever since they immigrated to germany hard work and self-reliance made it is success but now they are under increasing pressure to share the fruits of their labor. the problem is that in greece that think in germany that. they come here and like the money in the street but we are also working very hard. working from the morning till night every day they get a dozen of c

switzerland or other countries like that over the last forty to fifty years the other option is fiscal union and that's to ask the germans who are to have debt eighty percent of g.d.p. more than nine times what russia has they already have the ask the germans to then pay money to southern europe that politically just doesn't look possible at the moment or revolt capital between various countries not new in europe thank you very much indeed let's check how european markets are reacting as we gear up to that decision they are gaining slightly they're pretty flat in fact as traders await that decision the euro is low against the dollar of the fairly heavy losses yesterday the ruble is losing some of yesterday's gains here or most. of trading mixed off the posting games from wins the cold is all good news that capital inflows to russia hit five billion dollars last month and that's all we've got time for me so we'll have more for you next hour all right day i will see that thanks for that update. i next saw you on the news headlines after this short break stay with us to. download the official a

slowly and methodically but they are moving in the right direction and they're working towards a fiscal union they're working towards common bank regulation they're working towards common back insurance they're not all the way there yet that's obvious but the fact is they're moving in the right direction a lot of people say oh german. it will never underwrite the periphery well news the german is already under in the periphery they're just trying to get something for their money and they're basically imposing a german economic model on the rest of europe you'll see russia and china investing in europe in fact russia's already very active in buying up creek and her g. assets so you'll see youth labor you know again the fifty year old probably doesn't want to take a pay cut but the twenty five year old will take a job so some combination of german technology russian and chinese capital youth labor could actually turn the periphery into something like singapore on the mediterranean so i'm very bullish on europe and the euro china is coming in for a hard landing not right away i actually think ch

exit cameron's position is that he wants to secure its new from the new fiscal union one. powers in the area of social policy but really the rest of the e.u. is that it's a prospect of them agreeing to that dave priority is addressing the euro crisis and for them this is tedious for our britain. over sovereignty is a distraction and actually that then puts cameron and in very difficult position because his m.p.'s will say renegotiate renegotiation has failed it's not in britain's interests to britain it's losing more than against in the e.u. and so the withdrawal is the only viable option and then i think it would be very difficult for cameron to reject that argument because his whole position is based on the premise that you if you can't that power should be repatriated and then if it turns out they can't be then i think that they'll be very little positive case for britain to stay in the e.u. george appreciate your thoughts political commentator for the new statesman in london thank you. the law in ukraine to recognize russian as an official language in some regions has

they have put into motion a long set of reforms they call fiscal union, banking union that are in thegenda. >> that was treasury secretary timothy geithner making a case for why he thinks the euro will survive. but that's not where goldman sachs's ceo lloyd blankfein thinks you should put your money. in an op-ed from politico mr. blankfein says the u.s. is the best place to invest now saying, quote, when i meet with chief executive officers and institutional investors and they ask me where to invest, my response is that the united states remains as attractive as ever. pete, love to get your take. a theme we've been talking about. invest on opportunities here in the united states where you don't have some of the issues. the best house in a bad neighborhood if you will. he says u.s. remains as attractive as ever. a safe port in the storm. i would assume you would agree. >> 100% agree. when you look at a lot of the names you and i, anthony, oftentimes have agreed on, some of the big pharma names when you're talking about the pfizers of the world, absolutely. i think there's a lot of diff

so when we say currency union, to be completed and supplemented by banking union, by fiscal union, iturney for a zone to be strong and to be sustainable. but it takes a lot of effort, a lot of willingness to compromise because in that particular case, we're talking about 17 sovereign member states, 17 different parliament, 17 different supreme courts, 17 different governments and ministers of finance and 17 leaders and 17 populations. that share a common destiny, that share a common currency, but that are under different financial pressures from the markets and that are a different level of development and level of competitiveness. so it's a difficult journey to charter and one where i hope the leaders and the economists will be able to meet intellectually in order to develop an implementation of a plan. >> are you saying, though, that ultimately political union is possible or not? >> political common determination and willingness to compromise is necessary. yeah. >> spanish banks borrowing from the ecb has hit a new record high, signaling a protracted difficulty in accessing interban

because none of the structural changes that have been so widely and incessantly talked about, fiscal unionbanking union, have been actually detailed or let alone taken. >> you know -- sorry, go ahead. >> no. no surprise. it is the -- kick the can down the road scenario has worked. then the mark's concerns have been eased. then came back and flared right up in our face. >> talk so much about greece anymore. the problem was greece have not gone away. i really feel as if in the markets the fear of greece leaving the eurozone has really receded. we are no longer that terrified about it. everyone i speak to feels it is almost inevitable. what's the fear here is the proposition of spain leaving the eurozone. if they get a full sovereign bailout, then we are going to start talking italy and once we talk italy, we will start talking somebody else. >> that's the whole key to it. bob pisani has been saying throughout the day if spain doesn't need a full-fledged bailout, you can see the reaction in the market. if you track the movement of the euro versus dollar, you will get a good idea of where the

. >> they need to work toward fiscal union, fiscal fromism and they give control over how much they borrow to a central authority and give up control over their financial system to a central authority and have a broader centralback stop to the financial system. those two things, those economic reforms for long-term growth and those government reforms are necessary, absolutely the right thing to do but they will take a long time to work, and for them to work, for that process to work, they have got to provide more immediate short-term support for growth and for financial stability, so that they get those interest rates down in countries like italy and spain, and that is very important to recognize because you are not going to solve these just with those long-term reforms, you need to do some things to bridge those reforms. >> rose: that's the same problem we have here, balance between austerity and growth and dealing with the long-term debt issue? >> true, but our challenges are very different in there are, they are much more manageable challenges, we don't face the kind of competitiveness

does that mean as a member of the 27, 28 used to be, that we an hn yesoi, ds trls be autthe fiscal union, and i was arguing about financial services, people didn't quite see the onnection. i think that's the future of the connection will be clearaus e erwango bene ap anim bve atansa arments.he i think they are actually quite understood by the commission and others. they don't always agre but the d.c. we hve a legitimate interest unharkmc en we acnri e inrychid fo the whole of europe and we have legitimate issues we should raise. and we should have any p mieruson and raising them llg roater dienu.sewih may well be contrary to uk interests. i'm thinking of things such as the financial transaction ta, bu, in uevisi oate.. i assumed you should probably want to oppose these proposals. how confidt would you be if the uk is le toevee ry sgt t roene elitn s ng a out, financial transaction tax we will be taking pt in that. the, consolidated corporate tax se, you look at te aa wondcuonsh b ierw iayh ab em we don't support that. the key thing here is obviously making your case with vigor and to thi

they are trying to have greater fiscal union. they're not going to get rid of the law because they word about the private insurance market going away. they are going to triple the fines associated with not buying insurance. they will increase the fines or enroll you in government- approved insurance plans. they will not unravel their prize architecture because a few companies go bankrupt. the only way to get rid of the law is to elect a republican president and senate. sorry. >> the blue shirt. >> i am representing myself. i was going to ask about forcing doctors to do things. i remember when i was a kid, if i get sick, my parents. the doctor. they have no insurance. explain how it came about that paying for health care became different than any of the service or commodity in our country. >> michael tanner has a chapter in the book where we go through the history that protect people from understanding the full cost of their health insurance and health care. it started in world war ii. it is the foundation for the employer-based h