germans and the european central bank which all turns into this downward spiral which they have not yet faced up to the realities of. they're still treating it as, well, you borrowed too much therefore you must have austerity without actually thinking about somehow that going to solve anything. >> rose: so in this great debate between austerity and growth they're taking the side of austerity because of the countries that have the power to influence are basically saying you have been profligate and we haven't and therefore for us to bail you out we want you to have better discipline. >> yes. and which is, by the way, just in terms of here is fairness it's a terrible thing because, after all, excess credit expansion or excess borough requires that the lenders be as blind as the borrowers and if you ask... the caricature that's not too far off of the spanish situation is regional german banks lent to regional spanish banks and now the germans are saying all the pain for that should fall on the spain yards. >> rose: so where do you see it going? >> if you take the current set of policie
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the european central bank have together really moved towards more effective governance of fiscal policy, of the periphery. and you particularly see that in italy. but i also think that now that the european crisis is no longer as urgent as it was six months ago, 12 months ago, the ability of the germans-- . >> rose: what makes you say it is no longer as urgent as it was six monthsogue. >> the feeling of pressure on the germans to now that they've provided so much liquidity through the ecb, now that you have done the initial bailouts and you've expanded with some support from the inf, the ability. european corps to continue to lend, you're no longer feeling that level pressure from the markets that you did six months ago. people said six months ago people were concerned that the your eurozone was going to praguement. i did not believe testimony but people sitting around your table did, right. >> rose: right. >> that really is not the risk that we have today. and you see that. >> rose: the eurozone survives and the euro survives and there will be no splitting of the southern half.
european central bank gave a very interesting position on how we do need to do both at the same time, austerity and growth. i think angela merkel would agree with thatment maybe she wouldn't call it quite these things. i mean she objects to the idea that there is a backlash against use ferrit ferrity-- austerity or to the idea that this is how, you know, all ordered from berlin. i think call it what you will. everybody is trying to think very hard. what is the place of europe in the 21st century. how does it manage to project its soft power, does it need to project hard power. there was a lot of you know, we did a marvelous job in libya but now when you really look at the nato operation in lib ya, we couldn't possibly have done it without the americans. and i think nato for a long, long time will be dependent on the u.s. so it's important to keep the united states within the european sphere, if we have such a crisis that it affects the u.s. presidential election and indeed the u.s. economy, that will not make america very well disposed towards maintaining a strong alliance with europ
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