tv Documentary RT November 18, 2013 4:29am-5:01am EST
well i said. i don't want to die i just really do not want to die young young a. deliberate torch is on its epic journey to shut. one hundred twenty three days. through two hundred two cities of russia. relayed by fourteen thousand people or sixty five thousand killings. in a record setting trip by land air sea and others face. a limp dick torch relay. on our t.v. archie dot com.
hello welcome to sophie and. today we are in paris a city of explicit luxury living side by side with probably all of europe in one city. conspicuous on their spending together in paris to stare at a desk and hysterically on the back of thankfulness is worth millions but where is this contradiction leading the society. unions are organized to provide safety and strength. but the weakest link become a burden so was creating the eurozone even a good idea as crisis still resonates within europe revealing weaknesses can the eurozone stand the test. john clear to share the former head of the european central bank it's really great to have you on our program today it's a great pleasure right so almost six years on after the crisis when just save the europe out of the worse i would say that the main probability
of the metal over tail risk meaning the change of the dimension of the your way here we countries ought to complete living the your way here that risk has be alleviated because of for reasons see it first all countries which we are under stress have adjusted and the result of the adjustment are very visible in the eyes of the external observers and markets second governance has been improved quite considerably with forcing of the. with the creation of a new pillar for surveillance of the competitive indicators with the fiscal compact and so forth. and the banking union that is the second reason the third reason is that politically it's been decided by all countries concerned that they went to to
maintain the integrity of the euro you and it's been confirmed both increase in germany and you know all of the countries and the fourth reason is that the central bank is i toast a very credible has said in the past that it could intervene to mentee in a mission of monetary policy in cases countries where behaving properly and embarking on the appropriate structural reforms and that makes for he's ns why we could see very very big improvement in those solidity of the your if i may because you were had one of the most powerful organization in europe and the time. you must have your opinion on that even now your ad men of a great stature everyone asks you for advice do you think it's normal that even if it started in the united states and it triggered in the united states it's normal
that no one has been held accountable for so i think that you cannot say that i mean you had a number as you know of fines here and there all over the advanced economies that have been decided upon you had a very large number of c.e.o.'s having to leave and quit those who engage in criminal activity have been sued madoff is a case in point but you have a number of large number of all those so you cannot say that i have to say that what has to be done of course is to pursue those who have engaged in criminal activity but the problem is much more generalized i mean they had enormous responsibility because they were not having a culture which was correct. but practically all the economist we are more or less a company in this very abnormal risk culture and also i have to confess
the functional world but on the side of the authorities you know the authorities in general the government's. supervisory authority as we have so confident until the start of the subprime and even after the start of the surprise that they thought that it was not possible that the food five or system could collapse it was something which was of the order of the unthinkable and we were plain wrong if i may the international community but you see if you are targeting only one. scapegoat that would be responsible for everything say that you take the banks the commercial banks then what about the non-banks what about the highly leveraged institutions are late nor a responsible role so what about the trolls for instance what about all the special
vehicles so you see it's more generalized if you don't even banks are the main reason bad banking system is the main reason that triggered the banks are part of the whole and the entire who has responsibility including the way you were computing the account the accounting rules the of course also all the rating agencies of course the anti bank and non-banks and the naive belief that we where you know were real there was automatic self correction of the market themselves the theory of efficiency of markets was also part of this whole so again i trust really that what has happened is absolutely only acceptable the fragility of the founders or system appear to be absolutely dramatic and if we want to never see that
again we have to correct the who are because if you target only one scapegoat then the other one are not correcting and you have you do not get what you want which is a much more solid world follow world i want to read out your quote trust in bank governance had been eroded and it needs urgent repair that means more effective supervision supervision from home supervision from the supervisory authorities a. large number of countries they are close to the central banks now before all this year. was much more let's have supervision out of the central bank sphere and one of the provisional lessons of the crisis was that it was not necessarily a good thing because banks are very close to the liquidity problem they are very
close to a number of very very important issues that are important when you have to exert supervision in an efficient and effective manner so would say that i was addressing of course all of our e.t.s. because there is no consensus still at the global level all authorities whether they are fully independent as a whole. in their own responsibilities or whether they are central banks all proved to central banks which are seems to be again an emerging consensus no well i mean within a lot of government bailouts and banks lately is that part of the supervision banking supervision you think but i would sell a totally different thing because then you involving the taxpayer money so your involving decisions taken by the public authorities by executive branches and by polly meant if again public money is at stake so supervision consists
precisely to exert appropriate control in time on a permanent basis to avoid to have at a certain moment in presence of the institution which is collapsing. perhaps calls for taxpayers money i say perhaps because one of the gurus we have now went to a global level is that we trust that there should not be institution that would be so big or so interconnected that it could not fail we have to to have in mind that any institution should be able to fail if bad behavior unfortunately an absence of correct supervisor he has not been observed then those banks should not be. destroying the system as lehman brothers did.
they should not necessarily impose a burden on the taxpayer here recently also praised the spanish economic while he has said that spain has become more competitive than friends due to its policy of low wages so using lowering wages and salaries is the only way for european governments to get itself out of the crisis nor do i didn't see lowering wages they said lowering unit labor costs so the combination of nominal wages and productivity progress and it is true that when you have a big deficit a big trade deficit and a big current account deficit it means that you are not sufficiently competitive so you cannot convince your own consumers and the consumers of the highest of you up and over the best of the world because we are in an open world is that your products and your services were purchased in terms of quality price
so it's it was clear that at the time the spade was very very much own competitive with units of a cost to high and the adjustment of this economy has driven the competitiveness of the country in. right direction and what they see in terms of exports what they see in terms of dynamism of exports demonstrates what i can see also in the figures namely that the unit labor cost have diminished quite a lot now competitive and i was reading a recent article in internet this morning where you have said that there is a lack of democracy in europe what exactly do you mean are they driving economic engines like france and germany are to blame no i. would say understanding of the present situation of you up of the you where you are and i'm concentrating on
governance in the in particular because we have. of course but. we have fiscal compact the new treaty that is dealing precisely with this. we have that your gun semester again which is a way to look x. and t. to the budget of the values countries in the year where he a particular of all these is something which is very important and goes in the direction of defacto political union because when you are dealing with a budget or with mad call policies in general you really are the heart of democracy the body movement has to vote for the budget so we we are really at the heart of what democracy which is the national assembly of commons the force so that there we have
a defacto but if you could union but we. deliver love your hope as a whole but more particularly because it is really the problem in the your way yeah i have no democratic legitimacy and the reason why seems to me that in certain cases not in all cases in certain cases it would be good to have more involvement of the european parliament i call that activating federation by exception in exceptional cases perhaps we should have more involvement when i take a break now we're talking to the former head of the european central bank how resilient will the uber stay on a drop of the ongoing fiscal crisis and what happens to you or a when the dollar crashes well the back.
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welcome back to this edition of said think oh we're here in paris talking to. the former head of the european central bank when i speak to people they say that france isn't at the best place right now is there and if things continue the way they are now it could find itself in place and greece in the future do you think present policies are stimulating or stagnating growth i think three problems no very clear. but you know. quite a long period of time first there is a problem of public spending as a proportion of g.d.p. the public spending too high. fifty seven percent of the g.d.p.
and france is one of the two countries in the european union that at the highest level of public spend use as a proportion of g.d.p. that is no good for the long term goal of competitiveness the second problem which is that the. all the whole. markets including the labor market are not flexible you know when you are in a world which is changing very rapidly if you adapt rapidly you can save jobs and create new jobs which is the ultimate target. so there is a problem there to push through the structural reforms and then you have a third problem which is the issue of competitive you need labor cost competitive us there of course discount is not at. in the situation of
greece all the countries that we have under stress but it is an issue to oversimplify i would say francis today in the situation of germany at the beginning of the you'll so there he is. in the beginning come pretty for this which germany did over time year after year when he gave the year after year one point five one point two percent of competitiveness each year in terms of unity because the combination of productively progress labor productivity and. i would say revenue but also examining other products to export that france doesn't no no no no no don't trust that at the beginning of the. french had a common account surplus in one thousand nine and germany deficit so there is nothing in the commas ome in the d.n.a. which is fixed by definition neither in russia noise in france though in germany
what you need is to create the condition for i would say appropriate behavior of your economy and i have to say that france knew that it is possible because in the eighty's and the ninety's we pursued a policy in friends of competent t.v. does inflation which was precisely improving competitiveness through unique labor cost being moderate you're after year after year and if we could make the euro do the whole it was because we had this long term strategy so you see in eighty and ninety proper he had behavior in since the setting up of the year whole germany in a bad situation fancied a good situation and then the situation leave earth because because germany was very very consistent in person competitiveness and i trust that. it is what my
country should do take after all these years and all the problems tech european union has experienced do you still trust that it was a good idea to bring all these different countries and. of course of course i profoundly trust that and it seems to me you can look at this present situation through two different angles so you can look at it. then of course you see as i said that the a.p. center of the crisis crossed the atlantic and came for the us to the you were here to give up the general of the u.n. here in particular and that of course creates a lot of problems and you had to adjust in a number of countries so that that is absolutely obvious and when you are the epicenter of the crisis you have a lot of things to do that's your responsibility not only for you but also for the rest of the world because we are all interdependent interdependent now you can look
at it for a different angle which would be more positive if i may you could say first it was the worst crises of the advanced economy since world war two. so two thirds of a century we had the worst crisis and the you who as a currency proved his illions which was totally totally impossible to foresee the external observers whether in asia or perhaps in most schools perhaps a new low would have said it's impossible this currency is the new currency you are by construction in the best in the worst crazy ever that currency cannot behave properly and you knew that it behaved properly so that that is something which is a fact. the country has been resilient these you were it has been resilient there
was no departure of any country so in the worst crisis of the advanced economy since two thirds of a century you had zillions of the us not only resilient but do you know that we were fifteen countries when lehman brothers collapsed and next january we will be eighteen so three new countries and the yahoo area slovakia estonia and latvia and do you even knew that we have created since the setting up of the you hole a little bit more net jobs than even the us the united states of america so you should not be entirely negative. but the question is because you keep speaking about the crisis that came from over the ocean the crisis there isn't over there america is going through a very deep fiscal crisis in the your area going to be turning to continue and be
resilient because they keep printing money and raising their debt ceiling how's that going after that player and there is no i think that again we have to be absolutely clear in my own under-study we experienced. being the crisis of the advanced economy you had crises of the. you had crises of the asian countries you had crises of soviet union you had crisis in many many places of the world for the first time since world war two we had a crisis which was specific to the advanced economy exactly like twenty ninth was also a crisis on the industrialized economy of the time and in that crisis we are all in a situation which is difficult and of course for very very i would say active. improvement. the european themselves they have two
challengers one is the challenges of japan challenges of the u.k. challenges of the us they are of course a very large advanced economy on the one hand on the other hand on top of that they had bishops enough to create a single market with a single currency which had never been tried in the world so all the governance of a single market with a single currency in the worst crisis since world war two is also part of the challenge of the you where the of your brain injured or and the your we have here in particular so that makes two challenges when the other than second eleven you won and that's the reason why it is extremely important that we improve the governance of the your area but play in simple words just tell me if the dollar
crashes you can exclude that possibility well the euro still stands strong no i totally exclude that the dollar could crush personally because i don't think it. it would be justified by the fundamentals from time to time as he united states is posturing in a strange way threatening the us itself and the rest of the world of a default but i don't post for one segment that this is credible and i would say that again the who has proved as a currency zillions which is remarkable remarkable it was not expected to form the external observers i was myself very convinced of course that we had a currency which was backed by good fundamentals and still is backed of course by
good for them in. towards but it was not the perception including you know this very simple reasoning you are no the if you settle the question is how can your currency can be sullied and credible but the ballot box is that we are in the epicenter of the crisis but for a part of the your here the you will be as a whole as good fundamentals and the currency of represents the you as a whole. but the fact that for example here has been rising relative to the us dollars everyone is like yeah your eyes doing great is this really good news for the euro zone. not necessarily but one has to choose the you say the you who will disappear the whole we develop the you always in great danger they do that to save the euro all you choose the other way. which consists in saying the you who is too credible b. you. always do the avoidance of course the fact is that we are living in
a world where i would say both true we of course in the world of floating currencies it's certainly normal that the yahoo appears as being credible but it is not welcome of course that it would be skyrocketing that's absolutely obvious but again we depend on the decisions of. the vestas and savers the world over. the former head of the european central bank thank you very much for this interview thank you very much melissa.
the diplomacy that seems to be coming from washington it appears to be just falling sure of the expectations of the united states as a superior negotiator as a superior diplomatic player but we see what happened in egypt after the arab spring and the election of morsi if there was a space there where the united states could have played a critical role just assuring more and more seats on a path that would have maybe brought some advance meant on some jobs economic development in that period of time the united states falter and it's the policy ok you don't like that you are coming in and telling them how they should conduct i understand that in any case when the morsi thing there's not much more the u.s. could have done now in iran the u.s. is trying to start in talks with with the iranian government and yet it's getting
clobbered in the middle east by the saudis who don't want to do it by the israelis or don't want to do are very good friends with good friends i want to. write the scene. first street. and i think the true. on our reporters when they're. in school. or be in them. if you nothing no opportunity. to start to construct your own little terms. kill no longer be in bed give don't want to be gangstas in
a lot of. dog they don't want that bull with all the time that the kid came to be we can see. he just needs a hundred dollars and i hope i live in the hood and what a.k.o. sound viable thirty round clip taking but i felt like. i said all about that. i don't want to die i just really do not want to die young young a. deliberate torch is on its epic journey to such a. one hundred and twenty three days. through two thousand nine hundred ton two cities of russia. relayed by fourteen thousand people or sixty five thousand killings. in a record setting trip by land air sea and others face. a
limp dick torch relay. on r t r c dot com. a down day for. the russian republic mourns the fifty people killed when a plane crashed on landing and like. with ambulances on standby the victims' relatives are being treated by psychologists ahead of the start of the identification of the bodies. human rights violations and the forced labor incurred condemned by amnesty international their report timelines will divert ok. as fazed by migrant workers preparing the gulf they will be twenty twenty two world cup. german media revealed that intelligence is using hundreds of luxury hotels across the globe to spy on international diplomats while they've been dissed on calls for action to cause a loss of that.