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Global economy focus of critical G-8 summit

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    World leaders concerned with preventing Europe's debt crisis from spreading

  • Duration 3:16
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Critical summit concerning the global economy leaders of the G-8 nations meeting with President Obama this weekend at Camp David.

High on the agenda what to do about the European debt crisis that threatens fragile economies really around the world.

Let's talk about what -- you go editorial page editor for the Wall Street Journal where in an interesting time you've got Greece and basically bankrupt right -- and threatening to leave the Euro zone.

Because.

It's people don't like the austerity program that its government imposed.

Yeah the French government the number two economy in Europe.

Trying to bring in an austerity program and they get voted.

Out of office in favor of the socialist.

Yet it's it's it's really -- -- what you see is in some respect I think here is the revolt of the local national economies I can't just be that the austerity programs have been put in place.

They don't really have a lot of alternatives I mean what is -- alternative if that doesn't really.

It is they can decide to leave the Euro zone.

But that would mean the year they'll have euros anyone have drop us.

And those would immediately rather go back to ignore or devalue by 8090%.

Something like that.

So they take a huge devaluation in their standard of living.

But that's the fundamental choice the Greeks are gonna have to make -- their next election and and you said I mean we read so much about.

You know -- a nation Greece potentially going.

Bankrupt.

But as you point out it's not exactly a huge economic.

Now he's not it's about 2% of the total European economy and it's about the size of Dallas.

If -- the United States while it's not a big economy but it it's more important in terms of the global economy now because.

If it does leave the euros.

That will be a signal.

Two others that it is possible to do so it's been conceived remember you once you're in your -- and you never could lead out.

It's -- -- now if -- if they decide to leave then.

Then that would suggest to people a woman he's Portugal next -- -- next if you could the whole eurozone breakup I don't think that would happen.

But you beginning to see people realize that it could but what does all of this a two pots and in this country about our borrowing are spending and everything else well I think the most important lesson is.

Don't get let it get to this.

Place because once it gets to this position the choices are awful either way either you have to you have to do an enormous cuts and spending who suffers from that the most.

The poorest people do you -- you -- the elderly you risk.

Devaluations of the huge and living standard cut.

You -- really wrenching change the best thing to do.

Is to reduce your -- gradually over time.

So that you don't face this -- so why is -- that our leaders you know don't look at the riots in the streets in Greece and everything else that's happening there and say okay.

Let's have some comments because democracies don't make difficult decisions and last until there's a crisis at least they tend not to.

Now why -- leaders do and it takes wise leaders in my estimation to be able to lead you there to persuade a country.

That's to say you know what if we make these smaller changes now we'll save a lot of heart -- later that's in some ways what this election is about and that's what Paul is.

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