The cracks in europes foundations. Corona recovery deal and the e. U. Rebound thats our title. And its a pleasure to welcome our guests eric is an american journalist who has written for the los angeles time amongst other Media Outlets and he says the summit exposed once again how much disunity there is in the European Union. And were very glad to have with us public talk of tomasky he took us to excuse me he is a polish economist and senior associate at the German Institute for international and Security Affairs he says we must reform the Member States now or will face the same problems again with less time and fewer instruments. And great to have with us once again. Casting emily and she is Deputy Editor in chief is the Parliamentary Bureau of the german newspaper sayto and she says the deal is far from perfect but it is a signal that multilateralism is still alive. And let me start with you cast him and ask for your take on the big picture there are a lot of superdelegates being thrown around here a historic a breakthrough chancellor merkel saying its a huge step for the e. U. Would you agree with all that i would say yes its a huge step forward for drummond and also for do you because germany basically changed my mind and giving out. And said offer loans but i would not miss all these people that are saying its now a historic moment because i think history is written. On the positive from the from the future so historians have to jack shriver that was historic for the moment now it is a big problem how would you see it as an economist is the most significant moment to you print a comic integration since the creation of the euro because so far we. Fellers whole system which consisted of loans no were here for grants to those gone so quite some substantial do something grown to 750000000000 a few rows however from the comic respect for mo i think that the most important things will be doing long be able to stop blogs the bull market. Thank you very much and well come back to that point a little bit later on eric how would you come down on this historic or less so what we just heard from pavel indicates it is indeed a very very big step how do you see all the mutualization of debt for the 1st time is a big big step its something that was long overdue the e. U. Could have done this a decade ago the eurozone crisis might not have been is of years it was but on the other hand 5 days and 5 nights of negotiations for this deal that could have been done in a day is a bit of a farce and it just showed the e. U. The e. U. Is far from you know united in with the problems facing the e. U. And facing the world its not really. Making a very fit for the future when they take 5 days to get a decision like this done if i may say that i mean do you is its united otherwise you would not have a deal i mean i agree with you it was really very difficult 5 days and 4 nights to negotiate small signs and but im sorry by the end desa do you want to im black i dont im not trying to use end of rod they never manage to make a deal and he has made by 27 national Member States one last big picture question to you pavel before we take a look at some of the details of this deal it was a compromise as both essentially have have conceded with significant tradeoffs made by pretty much all interested parties the question is whether the result justifies those concessions of course just as far as theyre called concession something we have to bring mind it to be fair if in the in the you trying to sort of a different Member States with different size different the columbus systems and for some of these Member States is really a huge step forward like from the netherlands before sweden there should be to go into the common debt to come in come on the government come on move transfers which would go to the south so this is a huge step forward which nobody in those concerts expect and the police of this comes with will have before us criticism at home so let us in fact now take a closer look at the corona recovery package and those north south divisions that it provoked. It was clear theyd be a fight over the 750000000000 Euro Recovery Fund and it exposed deep grips with. Countries like italy and spain have been especially hard hit by the corona pandemic were timed to counter resistance from countries like the netherlands and austria that would prefer to save money to marathon negotiations they reduce the amount of direct to 390000000000 for the 1st time the e. U. Will issue common debt despite all the haggling the current president of the e. U. Council has placed. And i think this is a clear signal that goes beyond europe that this very special structure this very special entity a European Union consists of 27. 00 Member States that can act together despite their very different backgrounds and have proven they have the capacity to act that is a good sign. But what is the deal actually worth. You talked in your Opening Statement about the disunity exposed by the deal in fact there were moments where it looked as you said of course the 5 days as if there might not be a deal would you say those north south divisions will leave lasting scars absolutely its not just north south now its east west we saw small groups of Eastern European countries able to blackmail their interests we saw the small frugal zabel to force their interests through the e. U. Used to be led by france and germany kind of leading the way and people are getting away with in the wake of britain leaving the e. U. Smaller countries are coming up with their special interests and its a scary moment if you think the world the way the worlds going with china the United States these big power blocs in the e. U. Here in the middle with 27 countries haggling over small Little Details is the e. U. Going to be able to compete with these big countries in the world of the future. Yeah i went i was sorry but i its totally different actually what i see does is bruv that liberalism is still alive i mean 27 Member States make a deal and its sure it took a very long time and you still have to division between sours and north and east and west shore but i mean to special situation here was did normally until the mob germany was in the one line vista madeleines austria and dismiss it countries that say day on froogle so actually germany was the leader in saying austerity and after the crisis suddenly there was a change in german politics and a big change so a german he stepped away from a story. And went to the 2 for 2 fronts again and then they had 2 strong french drome and motorola that basically came out with this proposal to deliver 500000000000 in grants and just was a big change i mean we were in fact told by the german press at least that the chancellor seemed to be favoring the colors of the tricorder treacle or the red white and blue yet would you say that there is a lasting change here to the balance of power in europe in part due to chancellor merkels decision to go to the other side i mean do you see clearly a dad wanted me instead. To miss not here anymore but because Great Britain was also balancing as a big power the european decisions and i would not be sure that as a permanent shift from germany. To be it to decide off disallows on countries and us and become trees but on. The other side i would say days no i try to really watch what germany do i mean dollar for big. Economies now are left over in the European Union and they have to Stay Together otherwise the european internal market which is by the way the biggest in the in the road to break away. Have a little bit lets talk a bit about some of the economic details of the situation in which europe finds itself before the countries went into the summit the leaders went into the summit there was a lot of talk about the eurozone survival being at stake largely because of the divergence between northern and southern economies if we look at the current numbers germany the netherlands it looks like theyre going to see an Economic Contraction this year of around 6. 5 percent spain and italy or more are almost double that so will this deal now close that gap the head of the European Central bank has said that gap is putting the very survival of the euro in danger do you think the deal will get money to those southern countries in such a way and quickly enough that it can close that divergence. I fully agree that the diversion diverts with not only the euro area but especially of the Single Markets is a very. Very bad thing and whats changed the minds of the leader of the summit i think its was the throat above the. Woods of the Single Market that someone comes to us off the corner crisis were actually developing. And produced those come through scum actually change the Political Alliance of those countries so the economy divergence can cause social lot of divergence and social good of the of those they vote and can have a vote on the go to impact on the political unity of the you know and i think that although they do it on those 2 did very well and thats why we have decision of the summit so let me ask you this eric. The dire economic prospects that are facing those southern European Countries are not only of course due to corona they were macroeconomic weaknesses in spain and italy and elsewhere that preceded the crisis the. For were determined to make sure that this recovery package essentially helps to remedy those macroeconomic weaknesses by imposing whats called conditionality do you think that we will see true reform on the basis of this deal i think they have to and i think the reason germany switch sides and was suddenly in favor of collectivizing debt is because merkel realized this is the corona is a one time thing its an exceptional circumstance the problems with coronas not only because of the economic problems theyre having before and you also realize piling more debt on these other states was going to drive them into into really dire straits so this is a one off perhaps well see but i think miracle also realized it was the right thing to do and there will be controls now the netherlands push this through that they will control with the conditionality make sure the money is being spent on things to help mitigate the impact of coronas so if youre a frugal person you have to say well ok well see how this works. Not a bad deal could have been better but at least this will go for corona related issues next year america will be gone its unlikely another conservative chancellor would do this again so i do think this is a one off this will be going into the credit crisis and hopefully the money will go to the right places in these countries to help them overcome the credit crisis test and one of the points of criticism for some observers its what is what theyre calling the governance architecture of this meeting those conditions that i mentioned that are supposed to ensure reform in the southern european economies that theyre going to be essentially overseen by other e. U. Leaders not by the institutions in brussels but by the European Council itself isnt that a recipe for ongoing divisions and delays. I must say because it is actually on possible different Member States. Different country what kind of shit they have to do and what kind of reforms they have to do i mean india opinion all Member States us of oil and National States and its actually on possible that another state can tell you what to do on the other hand and i think that that was the reason why they had to find a compromise i mean taxpayers from all of the form on National States got on teaching these grants and the dept is a common dept in a way and that means also that the german taxpayer us. Taxpayers from the netherlands want to make sure that demanded that this now on the table it be spent on the live today and i think it is also a common understanding that there has to be a kind of control your Opening Statement referred to the need for reform in Member States do you think this conditionality is going to do the job. I dont know is difficult to say because we will have the next extreme time pressure the Member States will have to propose programs to give the money in a very short time and those programs will be also is by the group in commission and by the Member States so its. Difficult to say what kind of quality of these projects will be and where the money will be spent the most used to small deficiences most Holding European come through thats going to be a challenge let me come to a different point all of you have mentioned the provisions for common debt basically the idea is that much of this recovery package will be financed by borrowing on the Financial Markets by the European Union commission now when that proposal was 1st made to eric. The german finance minister referred to which are essentially made the analogy to the socalled hamiltonian moment for you and me as americans i think a lot of us know about that moment because of the musical hamilton but let me just remind our visitors it was the moment in 79. When the very 1st treasury secretary of the United States persuaded those nascent american states still very young to accept common debt that essentially was the 1st step toward u. S. Fiscal integration which is made the u. S. An absolute powerhouse also one international Financial Markets is the same thing happening here. No this is a very very small step in the right direction but a small step in way too late that was 1719 the United States was able to florida blossom because of that promise and the promise to pay back all that debt the United States has always paid back the money its borrowed and thats why the u. S. Is such a great creditor and the e. U. Has been hemming and hawing about this question for 2 decades now the euros been around for 20 years but theres no collective debt and thats the fundamental flaw the fundamental weakness of the euro and they knew about this 10 years ago when the eurozone crisis flared out of them and talking about it ever since and now theyre taking a small very baby step towards the hamiltonian moment hopefully it will be there will be something that will bring. Bring the give the euro some some power but im skeptical i doubt its more than a one off in the here and only moment if i can just say this to hamiltonian moment wasnt actually a moment it was a process of fiscal integration that went on over decades into still not finished in the u. S. Yeah and i think the 1st thing off the euro navi have the 2nd step is a common depth and i think you have to take a decision on your passive take the decision of either david continue and up today and also the next chancellor who whoever that may be perhaps its a green one you have never know how but you have to decide do we go straight on this way or do we stop and then we have to give up also does common currency i think the idea at the point that they have to take a decision that ridgeway public and i get you to weigh in very quickly on the coming debt is going to. I would like to remind this is not the 1st time to use issuing death sure it was you was assuring that for the last 10 years but that is going to be the biggest step you know he was in small amounts only for loans and would be for the 1st time but is sure in the programs so this is this is new and the question is if we are the conditionality of that will be Strong Enough for us and sultan drop to actually use this money properly because for someone to be the last chance to reform the contras there would be no 2nd chance so a lot riding on this and a lot riding on another aspect of the deal as well it wasnt only northsouth tensions over frugality that nearly torpedoed the negotiations at the summit so too did east west divisions over linking e. U. Funding to recipient countries compliance with european principles on Democratic Values and rule of law heres more. The text that has been agreed on the rule of law has improved. Its a very clear in the document a very clear commitment to the rule of law and a very clear commitment to the protection of the financial interests of the union and the rich try to make a connection between the rule of law budget. Was successfully rejected. So cast in pretty contradictory assertion is there also a fund there law in viktor orban whos right it basically everybody did win because we have a close now in this in this statement off after them it that ok we have to put the paying dollar off the law to fulfilling the role of the law but this is a little 2nd sentence which says ok but the Member States have to decide so basically or set off on the line described by saying ok very dedicated our money to guarantee that the states that didnt get the money. And this one a lot of death also some truce to which you say going to direct that but he can veto such a decision. Let me ask you pavel again your opening state statement talked about the need for reform and also your concern about whether there are enough instruments in the toolbox of the e. U. To compel reform now your own country poland has been under ongoing pressure from brussels for its effort to undermine the independence of the judiciary will this deal change anything. I dont think that there was state of change on this incursion unfortunately to you has no real instruments to influence comes just like poland and hungary and you budget your finances so unfortunately we can still want to do that in the last budget to do it in the last Financial Framework up to similar instruments socalled micro konami conditionality to influence the economic policies of Member States and its proved to be actually toothless so i dont think its doing the next 3 years that you will be managed to stop of coaches get to further destroy the positions to let me just follow up on that there are also currently Legal Proceedings ongoing with European Union member countries that have not complied with all of law and those are not yet resolved taken together if they were resolved against the countries if they were found not to be in compliance together with what is it lisa now a principle of linkage in this deal could that start to change things i dont think that the current government in poland is really making 2 step for was on the way to destruction of the rule of law and the ones that because when the pressure from the brussels is really high. Again the president of the room about you want elections on 30 questions he has a full power and poland and you can do everything he wants with the judiciary and the efforts that is next step will be published in the in the middle eric you havent been overly optimistic so far about the agreement would you do differ without analysis or do you also think this is toothless i think its a nightmare that these Eastern European countries were able to water down things and countries that are trampling on. State his rule of law limiting press freedom limiting judicial freedom its a worrisome development and they got away with it and you know how can i. Everybody there be a winner how can all 27. 00 countries walk away as winners i dont get it theres always a winner and theres a loser but they all claim to be winners of the e. U. Summit if i bring i for if i can never very easy to. Imagine trying to 7 families are living in a big house has 27 apartments so everybody that owns an apartment has its own bottoms so do you some europeans have i dont know problems with 7 though they have problems as design by counties and on the basements they have also problems i dont know with the water coming in and everybody is saying oh this is my biggest problem yet and so at the end to 27 owners off these apartments in the big european house it greed on the blend it just dedicated to fix the whole house and have it happen or not is a different question but display and basically helps to fix the house and in that way everybody can be given a because everybody everybody can still live in that tower one of those boners can block the whole thing and thats the whole we know so far not because everybody else does 7 signed disagreement off the off. The whole thing let me let me ask you for me as a lawyer this is a big provision i grant that the conditionality relating to rule of law yet it is now in a document that will have a certain legal value Going Forward does that not establish some kind of lever that could perhaps be strengthened over time could be you could be that exactly that if it happened but the have to see that i mean. That was the best deal they could get out its not the idea far from ideal but it is a deal perhaps and to have and perhaps to water is draining in they do more this deal still has to be approved by the e. U. Parliament do you think well see any changes i dont think the diminishing the changes because the government disprove that this money goes trishul the public promise was very broad so we will be very happy to. Received just 160000000000 euros so very briefly i want to come back to our title the question was will this help the e. U. Rebound cassy gave us the great analogy of the common house would you say the foundations are at all stronger through this this deal yeah the collectivization debt was a big step forward and thats something to cheer about they still have to sell. Im not going to get out of the question altogether is having a you more resilient i mean not to do you know a side of that summit is that the e. U. Is still existing. Rather its small as an infant seat. From their cologne perspective is definitely more is it going to have the intervention here 1st National Ticket on the top of your package which mike makes. Possible economic crisis or the crisis. With the probable its often said by you leaders that its time for europe to speak with a common voice and to play a stronger role in the world does this deal help it at all to do that well the one that you used to think economically stronger than the would be your have a stronger voice in those so that you shrink also increasing international the importance of the common currency so social gloria. Thank you very much to all of you for being with us for this discussion thanks to all of you out there for tuning in see you soon. For a murderer. Good. Thing. To have. Is that m. R. I. s know its fantasy asia play this traditional display of horsemanship gulag is kind of moroccos cultural and. Now women cannot get along as well as a clear sign of womens liberation in the kingdom moroccos morier women. 15 minutes d. W. Drugs weapons human trafficking. Delmore 2 are no mere name goals for the nigerian mafia on the riots. How did it comes of this who is behind it or some of the holding. A meeting inside to see how business there. Its really tough focus on europe. In 90 minutes on t. W. What secrets lie behind these walls. Discover new adventures in 360 degree. And explore fascinating World Heritage sites. P. W. World heritage 360 getting apps now. For posters from nigeria thats what nollywood stands their unique. Authentic. And successful beyond belief 7. He would start aug 7th on g. W. Frank food. International gateway to the best connection self in road and rail. Located in the heart of europe you are connected to the whole world. Experience outstanding shopping and dining offers and try our services. Be our guest at Frankfurt Airport city managed by from. Visit g. W. News a live from berlin a widening crackdown of fueling fury in the u. S. President trump says the deployment of federal forces that began in portland will be increased to include other cities where he says theyre needed to restore law and order critics say the move is politically motivated and will create even more anger