Jeremy Hobson: Now let's get to the news out of Libya. Reports are coming in that Muammar Gaddafi has been killed by revolutionary forces and perhaps a NATO airstrike near the town of Sirte. The Obama Administration is not yet confirming the reports.
For more, let's talk with And Andrew Walker, economics correspondent for the BBC, who's with us from London. And our regular morning open guest Diane Swonk, chief economist with Mesirow Financial in Chicago -- she's with us every Thursday. Good morning to both of you.
Diane Swonk: Good morning.
Andrew Walker: Good morning.
Jeremy Hobson: Well Andrew, first to you on this Libya story. If these reports are true that Gaddafi has been killed, how does it change the dynamic economically?
Walker: I think the key question is this: does this forward, does it bring any closer the day when Libya will achieve political stability? If it does, then that's obviously enormously helpful for the great task of rebuilding Libya's damaged infrastructure, and in particular getting it's critical oil and gas industry going at something like full speed once again.
And for foreigners who might want to have a particular role -- particularly in the energy sector -- that question of political stability is absolutely key.
Hobson: Alright let's get to the other big story going on: this is a crucial week in the European debt crisis. They're taking final votes today on budget cuts today in Athens -- and of course we're just days away from the expected release of the grand plan from European leaders to deal with the crisis.
Diane Swonk, to you in Chicago, what's the significance of this moment?
Swonk: Well, it's very important that we get a plan, some kind of layout for Europe that's believable. And so I think the political will is there, the question is will they come up with enough for financial markets in the U.S. to believe it.
They've kind of been a day late and a euro short so far, and the early reports are certainly that they're not agreeing on much. In fact, even an early release of what the plan might be has all these fill-in-the-blanks because they can't agree on any of the blanks of what the plan might be.
Hobson: Well, what if they don't agree? What if there is no deal? What is the impact here in the U.S. Diane?
Swonk: I still think they have some time, but the impact is certainly precarious because we're very worried about Europe. We're worried about a contagion in Europe, and if Europe can't get it's act together it could bring down the whole house of cards again and cause a panic that's self-fulfilling in terms of another panic in the U.S. And frankly, we don't want to find out where that ends because it very likely could be a self-fulfilling prophecy on recession, and we want to avoid that at all costs.
Hobson: Andrew Walker, back to you -- is it possible that things could fall through with this deal on the European debt crisis? And if so, what's happens next?
Walker: I don't think they'll fail to get anything at all -- I would have thought at the very least they'll agree something on trying to strengthen the banks. But other elements are undoubtedly very difficult for them to nail down. And they may well end up saying -- on certain key elements, at least -- "Look, we'll do whatever it takes to save the euro." But then, they've said that before, haven't they?
Hobson: And Andrew, just quickly -- I mean, as you watch what's going on in Athens, do you think that the Greeks are going to hold up their end of the bargain here and get these cuts passed?
Walker: The government is certainly going to try to level best, but the politics -- as you can see from the streets -- are enormously difficult.
Hobson: Andrew Walker, economics correspondent for the BBC, with us from London, and Diane Swonk, chief economist with Mesirow Financial in Chicago -- thanks to both of you.
Swonk: Thank you.
Walker: Thank you.