The cracks in europes foundations. Carona recovery deal can 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 Times 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 pavel took 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. That casting emily and she is Deputy Editor in chief is the Parliamentary Bureau of the german newspaper sudarshan 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 super lives 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 drama new and also for do you because germany basically changed my mind and giving out. And said offer no ones but i would not miss all these people that are saying its now a historic moment because i think history is. On the path to form the form to 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 weve heard. Financial systems which consist of loans now we hear for grants and those grown so quite some substantial do something grant 7cb5xb a few rules however from the comic respect for mo i think that the most important piece would be doing long be able to stop 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 heres a 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 what 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 and i may say that i mean do you its united otherwise you would not have a deal i mean i agree with your advice re very difficult 5 days and 4 nights to negotiate a small sign and but im sorry by the end desa do you want to block i dont congress and abroad they never manage to make a deal and he has the un 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 concessions on the we have to bring mind it to be fair if in the in the u. 20 s. Of a different Member States with different size different the comic systems and for some of these Member States is really a huge step forward like from the mid to long before sweden to actually to go on to either come on come on come on the government come on move transfer switch to go to the south so this is huge step forward which nobody in those conscious expected and the police of this comes with we have before us the criticism of home so that has in fact now take a closer look at the corona recovery package and those northsouth divisions that it provoked. It was clear they had to fight over the 750000000000 Euro Recovery Fund and it exposed deep grips with the e. U. Countries like italy and spain have been especially hard hit by the corunna 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 right to 390000000000. 00 for the 1st time the e. U. Will issue common debt despite all the haggling the current president of the council was placed. 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. Thats. 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 where the worlds going with china the United States these big power blocs in the e. U. Here in the middle with 27 countries having 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 we still have to division between south and north and east and west draw but i mean to special situation here was did normally until the mob germany was in one line with the matter lands austria and these little countries that say dale froogle so actually the german he was the leader in saying austerity here and after crisis im leah there was a change in german politics and a big change so drummond you stepped of a foremost authority and went to the 2 for 2 fronts again and then they had 2 strong french drum 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 french 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 you see clearly if god wanted me instead but to me its not here anymore 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 did to decide off decides on countries or doesnt become trees but on. The other side i would say debts no i told it 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 do you appeal into the market which is by the way the biggest in the in the road to break away. Probably 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. Not only in the euro area but the Single Market 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. Interests of the Single Market but some comes to itself the corner crisis was actually developing. And then the book released in those countries scum actually changed the Political Alliance of those countries so the economy divergence can cause social lot of divergence and social theyve theres a version can have a vote in the got to embark on the political unity of the you know and i think thats all to do is understood it very well and thats why we have decision at 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 there 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 current is a one time thing its an exceptional circumstance the problems with coronas not only because of the economic problems theyre having before as 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 Current Crisis and hopefully the money will go to the right places in these countries to help them overcome the credit crisis test and 1. 00 of the points of criticism for some observers its what is what theyre calling the governance architecture of this deal meaning 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 possible that a different Member States can. Different country what kind of should they have to do and what kind of reforms they have to do i mean do you opinion in 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 are got on teaching these grants and the dept its a common debt in a way and that means also that german taxpayer as. Taxpayers from the netherlands want to make sure that the money that this is now on the table they would be spent on the life of a and i think it is also a common understanding that there has to be a kind of control we have of 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 have the extreme time pressure on the Member States will have to put programs to get the money in a very short time and those programs will be also is by the group in commission by the Member States so its. Difficult to say what kind of quality of his project will be and where the money will be spun the moment the institutional deficiences moves sold in european come through so 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 volz the german finance minister referred to it or 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 17. 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 us 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 you know 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 no not a moment if i can just say this talent on the 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 5 us introducing off the euro navi have to 2nd step. As a common death and i think we have to take a decision or youre a passive take the decision of either david continue and up today and also the next chancellor who that. Perhaps its a green one you 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 your. 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 it was in small amounts it was only for loans and would be for the 1st time which is issuing 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 some of them to be the last chance to reform the cops was 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 and 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. Was. It was successfully rejected. So cast in pretty contradictory assertion is that theyre also left on their law in viktor orban whos right it basically everybody did win because we have a close about in this in this statement off after them it that they say ok we have to put the paying 2. 00 off law to fulfilling the role of the law despot little 2nd sentence which says ok but the Member States have to decide so basically also left on the line described by saying ok very dedicated our money talk to guarantee that the states that didnt get the money. And this one a lot but thats also some truth to which you say going to direct it 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 through this incursion unfortunately you has no real instruments to influence conscious like poland hungary. You budget your finances so unfortunately we can swim to that in the last budget to do it in the last. Financial fair macwhich up the similar instruments socalled micro colombian conditionality to influence the economic basis of Member States and its proved to be actually toothless so i dont think thats during the next 3 years that you will be managed to stop of coaches get to further destroy the positions 2 things 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. Making 2 step for was on the way to destruction of the rule of law and that because when the pressure from the brussels is really high and low again the president of the ruling both you want to elections some options he has a full public palumbo and you can do everything he wants with the judiciary and then from supposed next step will be the pollution of the middle eric you havent been overly optimistic so far about the agreement would you do differ without a gnosis 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. The state his rule of law limiting press freedom limiting judicial freedom its a worrisome development and then they got away with it and you know how can everybody there be a winner how can all 27 countries walk away as winners i dont get it theres always a winner and theres a loser but they all claim to be winners at the eve summit if i bring if i can never very easy to. Imagine trying to 7 families are living in a big house just when. 7 apartments so everybody that owns an apartment has its own bottoms so do you some europeans have i dont know problems with sivin 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 this is my biggest problem yet and so at the end the 27 old us off these apartments in the big european house agreed on the blend it just dedicated to fix the whole house if it happened or not is a different question but this plan 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 if i was over so far not because everybody else to 7 signed disagreement after 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 it could be that exactly that event happened but the have to see that i mean i think that was the best they could get out its not eat idea. Farm idea but it is a deal perhaps it had and perhaps if the water is draining in they do more with this deal still has to be approved by the e. U. Parliament do you think well see any changes i dont think the difference in the changes because. The government has disproved that this money goes trishul the public prognosis is very broad so they will be very happy to receive just 106. 00 venues 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. Get out of the question altogether hes having a you more resilient i mean do you know a side of that summit is that the e. U. Is still existing. Rather its small as an infant seat. From the color perspective is different its a more resilient of the c b intervention shift. On the top of your package which mike makes the. Economic crisis or the crisis. For 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 before your have a stronger voice and. Also increase the 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. To. Be. A member of. The boy. The bigger. The be. Subject. To. The be. Behind the facades and to. Sleep quiet. The global obscene devastated by the pandemic. The silent 5. The bombs us coping with the crisis subdue cities around the world to find out the bar the tobacco 30 minutes on d w. Surely this meter just shows the numbers but read the body the boss. The book smart ways to get what youre good the book. W. Im not all think that well i guess sometimes i am but most often when the cup. Think stevens or german culture looking at the stereotypes classics but interesting to see from countries that i not. Yet needed to prepare for this drama they are new to us its all out and bought by my show join me from the jam and from d. W. Post. I dont want it. You know i mean youre monotonous and going yes. Were not going to syndicate. Us all without it but i. Dont want to. d this you know i mean when youre not in a scene going you know what a park is sort of a moment to notice. What im focused on in the studio but im with what an organizer i know but its a term. That you know i mean youre my noticing growing you are getting what you call you dont want to. Me number and generous. Because i see a variety of sort of. I should. Put on ive only said that i caught one on one for being fronted. By mackenzie it because i see if i say i said. I am. This is g. W. News a live from berlin escalating tensions between washington and beijing a flurry of activity outside the chinese consulate in Houston Texas and the u. S. Governments order to close takes effect china is retaliating shutting down an american consulate in the western city of chengdu well get the latest from washington also coming up on the show. Coming toward the little guy a sophia post muslim friday prayers for the 1st time in more than