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... everyone knew that this was unprecedented ... no developed Western country had ... defaulted in any way on government that's been sitting in the whole post World War two ... era ... this was an entirely new situation ... in the ... pantheon of financial crises this is when ... it's bigger than Russia in nineteen eighty it's bigger than ... the Asian financial crisis has been a ... slow moving train ... this settles in the euro ... that O'Dell the euro can fall apart shortly everyone will understand that if the euro dies there will be a huge economic costs surely nobody wants to go back to the media rather pray that that ... also the movement is that you know the U S said that ... when there's a crisis just take out the bazooka that means ... he ... acts decisively with a lot of money this is ... you can see none of them ... Europe is the brain ... its economy faces a long recession its people are arrested ... in the one that has brought peace to one's war-torn consonants ... may yet come apart ... in just two years the government debt crisis that began during Greece ... has infected all of Europe and maybe see in the world ... now the nations of the euro zone face a stark choice ... repair the currency bloc at great cost ... what does all the euro and take a trip into the frightening ... United Europe was at its core is and remains at its heart in economic idea ... Keyes was its purpose but economics me it's ... how we avoid another World War one ... we avoid another with which ... to me ... whine to nations together economically ... weak minded together Financial ... so that it is no longer in their self interest to go ... in March nineteen fifty seven the Treaty of Rome was shot in ... Europe between nineteen fifty seven ... you have the European economic community of free movement of labor and goods ... nineteen seventy nine was the first experiment with ... a currency union ... I'm linking parts European currencies ... which led to the European Monetary System which was the precursor to what we know a lot today in the euro ... and I think this is important is ... individual ... European states such as Germany and France are as economic powers ... the binding together of these ... could let them continue to be collectively ... true players on the world stage ... I centuries and the fifteen members of the European Union ... had agreed on a common currency the US to share ... they hadn't seen the economic integration ... that means than fifty years building ... brick by brick ... likes to ... read ... three hundred million people of the euro area ... real gold rush days are bullish ... the deduction the euro if we think back to add that I was remarkably smooth from a logistical point of the wheat European society using it forgot about national counts in that worked ... initially in the euro slumped against the dollar but by the end of two thousandthree it was above the price of its birth ... row while the euro did very well and what the hell by the weakness in the dollar and I think a lot of this going the opposite of the euro that the would be a United Europe ... was when the euro was established it seems like the big steps to get to that ... knows next levels of cohesion ... never actually happen ... when we have here ... we have this ... Howard babble we have just cost you forces we have ... frictions between Germany and ... France and Italy the so-called regional it and ... other European monetary union with that they created a system where you have a monetary union without fiscal union ... the stock should the your was such events ... may you ... have to speak ... fiscal discipline by the government on that because the opinion and does not touch the fiscal sovereign government so you would have a group of countries we want to give the Kings ... economic growth potential ... and that frankly fiscal positions ... we don't want interest rate ... one current scene ... the show unfortunate was that the idea of fiscal discipline wasn't there whereas the monetary discipline was ... the thought was handing over ... monetary policy to the European Central Bank will go a long way ... in the the the the problems of the different fiscal regime ... he's been a very tough ... Mana tree up heartbeat ... which ETN put the screws on economic growth in Europe that's where the seeds of the current problems were planted because ... said recently that he ... was unable to grow as much as the others ... and calls that had debt would result in less visible visibly going to ... financial markets traded all euro members pretty much the same handing out loans to Greece ... I'm nearly the same terms as loans to German ... behind and Brando was a mis placed assumption ... that all the euro countries working together ... that nominal NFL effect ... that created a terrible problem ... borrowing costs low there was no penalty for reckless spending ... and ... governments began to take on ... more important ... Greece to the most dangerous ... to make up for weak job creation in its private economy ... is on top of public aid ... that meant more borrowing you ... force ... Greece or Italy Japan paving the way they choose not to ... without causing some kind of schism within the euro zone ... that would damage ... the clit ... all of that kind of team to you ... in two thousand ... I ... the whole thing began with lousy real estate loans in the United States but of course that involvement and this is a dive bar ... the device in some advice about how my countries ... so we have the financial crisis in the United States in the collapse of ... Lehman in what is said to ... the world ... it causes ... all sorts of strictures in ... capital movements ... one of the things we learned ... in the fall of two thousand and eight is that financial viruses are extremely and eight ... when the bus the ... terms of the crisis is spreading from the states gathered ... around two thousand and eight ... also the people ... in Europe but they were quite optimistic they felt that the ... prices with the prices ... of ... gone into making the U S which would add in ... the rest of the word but ... we ... undermine the foundations of their economic projects ... of course aware ... that got me wrong there's nothing that happened in subprime mortgages in the United States ... they can explain why Greece was able to get into the euro zone essentially lying about its finances ... and why that chicken became of dreams ... in October two thousand I know really surprising grace ... a budget deficit predicted to be around three percent of GDP was actually twelve percent ... foreign investors have been buying Greece's debt ... and ... early two thousand ten man started to charge ... more and more so when disagrees ... and so the buzz saw the show if you like the Eurosystem was the knowledge that Greece Ashley ... was borrowing from all them people a full ... I thought that ... the Europeans were smart enough to know that this was not something that should be allowed to pass ... and I was little surprise that they were unable to move more quickly ... to as the saying goes put a fire wall around Greeks ... and that frankly ... goes to speaks to a structural flaw in the ... eighties but the very slow in making decisions ... because there's so many governments have to have their say ... and therefore ... the Greece problem which could be Apple easily ... and resold was never is ... this fuss place of the crisis was will freeze ... to repay its debt ... with the help ... so the lead on to ... the first ... bailout of the crisis ... in Greece in May two thousand and ten Greece that a bailout in Europe and built itself a rescue ... but the cause of the way the euro zone was designed to contagion was callously difficult to control stressing ... about Greece are weighing on markets worldwide this morning ... as the ... investors ... rethink this ... and wonder you know this is a brewing crisis houses to begin next ... Tuesday to pick up the tab for for for Greece ... are they to be able to pay back their debts got all their bonds ... should be worried actually about holding ... the sovereign debt ... of Greece cannot count on Germany ... I can on the ECB ... to come to their rescue and paid me off ... I would sell ... their inflation in restricted by its mandate ... the European Central Bank stepped in on what's happening ... and reluctant ... Europe agrees on an extreme diet of austerity and hope for the next ... the course of two thousand and ten Progressive Waste lovable questions were being asked ... of this has been reflected in the increases of borrowing costs some other countries ... that was a real worry that Spain would be following the Greeks and the other also Juarez ... about Portugal but as the next phase of the crisis is really intensified ... when it became apparent that ... our islands housing boom times the boss ... will Greece is the problem the songs means that it would find ... some is that a well actually ... this is can the sun's rays to Portugal Spain today because suddenly ... any country that that that the damage we have to think about possible loss so I have about blind spots ... but the grace and in Spain and Portugal where else in troubled overall this question suddenly had to rise about Italy ... it is much bigger country as the third-largest bond market in the words ... the first time that the European debt crisis wash the blood into the stores was in November two thousand ... that was the first time when we release all the spread ... between ... Italian bonds and German equivalent to one ... of the web of meetings in two thousand and global summits that was suppose sold the show that when a lot of rescue plans amounts ... unfortunately ... that none of it was back to the board nominee was acting decisively so that the markets could find ... within his rights ... there was a key moments in two thousand and ten ... if you told to senior officials around Europe ... now ... that they see as being one of the biggest mistakes ... in the handling ... of this crisis ... and I was the agreement made between the Gemin sounds a lot going ... on ... and the French President Nicolas Sarkozy ... on the boardwalk of the different results don't you ... in Oct two thousand and ten ... as they were discussing solutions to the European debt crisis ... the race for the first time the idea of what ... then became called private sector involvement ... this is this or euphemism all ... on a hold of losses markets ... have always ... believed it one fundamental point ... that's ... though European country would not let one of its partners ... to what it did do was to make a whole new host ... of investors the government will mark instead ... of investing once they let the genie out of the ball all ... the good stuff that by then and the genie is out of the book ... let it was the new year ... when the euro we need wheels only apply ... and it was the year where European leaders ... I didn't like to grouse that to any missed opportunity after opportunity to turn things around ... as the months progress and raised just failed as the markets go one more worried than bond yields soared back in the peripheral European countries you can see that the markets got more ... and more war ... the banks are among the biggest holders of sovereign debts ... of the market started become concerned about the bank's what you sow was a ... Butler this of this ... very key suitable buying run ... as one group of investors often on the refuse to stop funding the facts ... the high points the euro ... prices will be ... in March that was the EU summit when leaders decided to so-called comprehensive package ... and that consisted of beefing up the eurozone's bailout fund the Europeans have a ... set up a rescue fund ... to probably wasn't big enough today they set it up ... they still haven't gotten place meanwhile the prom is getting bigger and the promise of increased the cleanup ... spread that this is because the market psychology they need to be built for countries who I have seen in lower ... tax receipts of the one in trouble because of what to protect themselves against future that was sold ... in the case of the European Union that meant that Spain and Portugal ... peripheral countries with tears into her proceed to Greece into the bloc's fiscal discipline and the twelveth state benefits of ... what you need to be targeted by Texas again ... it was a very ... very for me get out of ... work ... to policy makers in March April ... for some pool time here in Dublin ... there was a high degree of confidence that they were well-known weight and scrapped ... my detected the confidence and in Brussels ... for a European Commission ... also in front of the European Central Bank ... as well as an interim government ... if true is false ... Ben and enable summary of the seventeen euro zone countries have been a bell that ... they were small unable to be contained by the bloc's rescue ... if Europe can keep its master those three it might be alright ... but it didn't ... and it was ... the ... when Jim fifteenth angry riders old central Athens ... police in London teargas in a scene that would become almost commonplace ... that evening the government nearly failed trying to push the more you demand in the Saturday ... Greece was having real trouble leasing ... deals thirty minutes is that it agreed in May two thousand and eleven I didn't live that Greece would need ... a second bailout ... the bailout was drafted to be as inexpensive as possible ... and was plainly insufficient ... it's there and I'm starting the economy ... Greece's people political class failed to push through the toughest on ... euro zone countries would put more money into Greece ... that Greece's private creditors and have to take losses ... of Pandora's box and an open ... the euro zone would lead one of its own ... Jones became convinced that ... Greek bondholders ... to accept nor just delaying repayments ... but a reduction in the amount that they would be ... repaid on Greek bonds ... production is known in financial markets at hacked the decision to ... force on homes increase to take a loss was in some ways ... so the mini Lehman event of the year ... so what happened was the place he became clear that that's ... this sort of ... there was no longer suck resigns ... aam did actually you might take losses on it ... we were looking at that opening the gate is just getting ... his name ... is open for the year ... is this a sign of the volatility in the market the spikes are what market something we weren't ... at all a sudden as eight the year for Preston to clean the summer ... and it takes stock is spiking up ... on investors on a rampage ... their target massively in debt of Italy ... the euro zone third-largest economy ... and biggest debtor in one of its own worst economic performance in thirty years banking system became much more serious from some moments ... when prices went beyond just Greece ... Portugal ... and begun to Spain and Italy ... is it too much to countries with huge government bond markets ... and many European banks ... that what had been exposed to these two countries ... Italian Prime Minister Silvio Berlusconi is under increasing pressure this morning and telling ... him Crysis or set it apart ... put two and a half trillion dollars in debt it was too big to say ... the European bailout fund is a fraction of that stuff it ... and asking other nations to make a bigger ... risk throwing them into the abyss ... I think the market's response of the European summit in July twenty but it was very telling ... that was the clearest evidence that this thing was getting out of control ... because the emergency summit supposed to wrap everything up ... to a degree on a new Greek bailout agreed to do little bits of Greek debt relief to know her in March and your cope with that with that little steps ... instead ... there was complete pandemonium and pressure on Italian bonds and to Cuba ... became ... enormous Wright whether you're in Crysis Italy ... and people really ... because it's one thing to bail out ... Greece ... Portugal Ireland ... but if you have to that of the eurozone is third largest economy ... it's unsustainable ... the world are burning and is increasingly difficult to see the well out of the European debt crisis ... so this this was no more dramatic threat to your taste and ... will depress dictate that could either the fold ... or leave the euro ... region pretty upset the markets ... and that eventually caused a change of government ... it's the spaghetti itself they can all Oni clan folded on his boss whatever you call it stocks SA sliding and it's all to do in Italy ... see the true story ... is the biggest political victim of this European crisis is governments ... I'll ... largely prompted by the events of ... a debt crisis financial contagion today's retail ... unit of the kids and in Europe can ricochet around the world ... the latest from all of the two thousand and eleven Michael Briggs summons to save the euro ... was ... in December ... the defendant deal means that countries have to be more disciplined in their fiscal duty is ... there will be more sanctions ... if they're not ... IPT's the regenerate you what the outcome of cinema negotiations ... because ... that was attached to the mistakes ... with this the summit ... it's clear that ... people are willing to go to ... the ultimate step of saying ... we are going up or cool it's that together which would ... be what would reassure the markets ... I ... it seems to me that the job of politicians at times like this ... is to make the essential politically possible ... and instead I'm afraid what we seen in Europe has moved too much of ... blaming the political constraints ... for refusal to do what's necessary ... to save the European ... it's possible some good might come off its UK history shows that in the moment of crisis ... two things can happen ... one is that the European ... countries lunch together the more integrated fiscal union and even ... de ... the the the first ... green shoots of a political union and warm this all but are on the big question is ... this debt crisis this rolled around the world ... is this something that can be stopped at ... or is this something that is disconnect continue for long time because there are of course to result in history whack ... things happen bounce back ... BdB ... so what now ... proponents in Europe was getting there that the erection of common laws institutions and policies when unite the region ... convergence was the buzzword ... no need to wait to be ideal ... no the euro and everyone would come together ... does the euro makes sense ... their seventeen countries ... the whole notion was built on the premise that ... and we need to do this because it was important to integrate Europe ... politically to avoid another war among European countries ... give Europe the size to compete with the United States ... and on the hope that over time ... the economy's weak and it can burn ... so ... that they would be more and ... more and more similar ... that really hasn't happened ... what a lot of investors says in a way out of this crisis in the short time ... is for the ECB ... to step in with a numb conditional ... guarantees Centrica Buys mulch ... government balms ... bonito imbalances is necessary to stabilize the markets ... the future of the ... of the project will be decided ... in my to ... buying from an upcoming Gemini ... chicken though I that's a ... we must keep this together ... and we will put German taxpayer money in the Germantown she ... at risk ... the other one is to ... to say we won ... the that ... and if the Mockus a site that that's not good enough and ... the euro stocks to fall upon you unleash ... these economic forces ... did you Connie really control ... some people are predicting ultimately ... a breakup of the eurozone or lease or molten countries leaving us that ... we actually don't know where this is going to go from here it could go ... in one of the number of directions ... each one of those directions on things above portends low growth for years and countries for the years to come ... I belong ... to a possible breakup of the eurozone is clearly a potentially much more threatening ... and ... difficult than others some initial some of ... them ... this question of ... what what this due ... to ... the political makeup ... of Europe and ... of how much it push ... political opinion out to the edge spa suite fringe candidates ... is one that's very much on the minds of Europe ... for which world were to happen last ... night ... that means ... it is ... we can underestimate how ... important the notion of economic ... stability ... and political stability sizzle and has gone through what ... you're doing ... short term ... he ... debt crisis ... will ... lead to most likely do more disciplined approach to national finances the deeper aspects of the European debt crisis ... is that it ... will eventually lead to a profound revision ... of ... Europe's cherished welfare state ... we'll euro be able to substitute ... its costly ... welfare system with an alternative that is ... more efficient but at the same time they are socially ... really you are ... able to have a more entrepreneurial spirit ... eating away ... at the US for example ... our Europeans ... really willing to accept those changes ... because if they're not the European debt crisis were taught us nothing ... he is up to your ... one way or the other two seconds ... if it can't get one of the globe's richest regions as I'm able to hold back financial calamity ... surely the rest of the world will suffer the consequences as well ... you BdB BdB ... the ... I ... I'm