More austerity is not the answer, our guests agree, but what is? A lively debate on the choices faced by Greece and the eurozone in the battle to beat the crisis.

Forum: Growth v. crisis

https://api.multimedia.europarl.europa.eu/documents/20125/15872190/d001-0021-en_mf.srt

Today we're discussing  the continuing euro crisis

and the problems in Greece, but also in  other countries with troubled economies,

Also the austerity measures  demanded largely by Germany

and imposed by the European  Commission, the ECB and the IMF.

In the 1930s after the Wall Street Crash,  governments climbed out of the collapse

by following the precepts  of the economist John Maynard Keynes.

Today we've abandoned Keynesianism  in favour of a sort of monetarist solution

that Milton Friedman  might have favoured.

Let me introduce my guests.  The Secretary General

of the European Trade Union  Confederation, Bernadette Ségol.

Next to her is British Conservative MEP  Ashley Fox, who is by training a lawyer.

Opposite him, Belgian Green MEP  Philippe Lamberts,

an outspoken critic of  the financial markets and of speculators.

On my immediate right is German MEP  Jürgen Klute, by training a theologian,

who sits with the Confederal Group  of the European United Left, the GUE.

Greece has been forced to shed  15,000 more public sector jobs

and to cut its minimum wage  and spending on health and pensions.

The move will save in some ways, but it  will also cost billions in lost tax payments,

Bernadette Ségol,  can a country's economy recover

Clearly not. We've seen what has  happened to Greece up till now

and we know it's going from bad to worse.

We know that this economy won't recover  with this type of diet.

It's no longer a diet,  it's much worse than that.

So in Greece we are now at the limit  of the situation for the population.

There is no growth, no possibility for them  to get out of this crisis

and see the light at the end of the tunnel.

If we continue this way, we are just  bringing these people to despair

and we're not giving them a solution  that they need, and that we need as well.

They know that something needs to be  done in Greece to put things right.

But they need time  and they need support.

We also need to help them for ourselves.

I'm very surprised  that politicians don't see that.

Ashley Fox, Greece will default  on 20 March

The second tranche,  130 billion of the bail-out,

is resting on the measures  that are being forced upon Greece.

What would happen if Greece were to  fail to meet the 20 March deadline?

I don't think it matters greatly  whether they default on 20 March

What they need to do is to leave the euro.

It's the level of their currency  that's crippling their competitiveness.

I think the last figures from Eurostat  for the debt

The country is bust  and it would be far better to admit it,

to write off 100% of the debt,  for them to issue their own currency.

That would make tourism, which is their  only large source of export earnings,

far more competitive.  Then that economy can grow again.

It'll be difficult for a year or two,  but, like Argentina, Greece can recover.

We are in a monetary zone  and you can't make that comparison.

This is not possible.  It's not the same situation.

Argentina was in a monetary zone  with the dollar. They broke the link.

They weren't paying their money  in dollars. They still had the peso.

They could pay. They had their central  bank and the Greeks do not have one.

We also depend on the Greeks.  We can't...

In fact, Greece is a tiny part  of the entire eurozone economy.

It sets a precedent and the markets judge  the euro by what happens in Greece.

I think so. As Bernadette said, rescuing  Greece is actually helping ourselves.

We know that the country that benefits  the most from the euro is Germany.

It's in Germany's best interest  that the euro be kept whole.

I wouldn't like to think of  what a strong euro would become

if we actually started shedding  countries like Greece,

It's not just Greece that's bust. Portugal  and Ireland are very close to it as well.

If you look at their debt equations  they are unsustainable.

But you're saying that it's in Germany's  interest that Greece stays in the euro.

But it's not in the interest of the Greeks.

I think it's in the long-term interest  of the Greeks as well.

There's a vast majority in Greece  that says, 'We want to stay in.'

What worries me is that currently,  as Bernadette said,

when you drive a people, or 50% of them,  to consider suicide as an alternative,

you can measure the level of despair  in that country.

Indeed, Greece has to undergo  a very deep transformation

and that's the case  of many European countries.

Basically, we've been driven by  the illusion that cheap money is easy,

that having financial services  as the core of your economy,

We have lost track of  how we create value,

how we really build value  and wellbeing for our people,

and that has to be earned the hard way.  But we need time for that.

On the one hand, we say,  'Member States have to undergo

When we turn to the Siamese twin  of this crisis,

namely the banking sector,  the finance industry, they say,

'We need time for transformation.  We can't raise capital that easily.'

'You can't force us  because that will hurt the economy.'

And politicians say,  'OK, we need to give time to the banks',