04/11/2011 Daily Politics

Afternoon, folks. Welcome to the Daily Politics on Friday. Greek

tragedy descends into farce with profound implications for the

future of the eurozone and the world economy. As Prime Minister

Papandreou faces yet another vote of confidence, EU leaders and the

Treasury think the unthinkable - Greek departure from the euro. Can

it be avoided, should it be avoided and what would it mean for the rest

of us? As G20 leaders scratch their heads and wonder what to do, we'll

have the latest from Athens, the City of London and one of the most

powerful British members of the European Parliament. And remember

this? Was the ban on fox hunting really worth the fight? We talk to

the man who pushed the controversial legislation through

Parliament and a Tory MP who wants David Cameron to keep his promise

And with me in the studio is Bronwen Maddox, editor of Prospect

magazine, and the Mirror's Prospect is for intellectuals and

So George Papandreou is still the Greek Prime Minster but for how

long is anybody's guess. This time yesterday we reported that he was

on his way to the President to offer his resignation. We even

named a likely successor. But those reports turned out to be wrong.

He's still there. Though for how long is another matter. Until

yesterday afternoon we thought he wanted to hold a referendum - but

it turns out he doesn't. And yesterday there was talk of a

government of national unity. But there isn't one. Confused? Join the

club. So where now for this Greek tragedy? Yesterday, and forgive us

for the togas but we had to do it eventually, the key players were

working frantically to find a way out of the mess. Mr Papandreou

offered to abandon the now infamous referendum and instead proposed a

coalition government. The markets rallied on the news but his offer

was rejected by the leader of the Greek opposition who called on him

to resign. So far he's staying put - no referendum vote. But he faces

a vote of no confidence in the Greek Parliament tonight. Meanwhile,

in Cannes, the G20 leaders are left like spectators at the feast. Jose

Barroso, who's President of the European Commission, has admitted

that there is a possibility Greece could leave the euro and that

preparations are being made if that happens. Last night, as fears

increased that Italy could be the next country to implode, key

European leaders and President Obama met to discuss the crisis.

One possibility gaining ground is a proposal to increase the firepower

of the International Monetary Fund, something that would see Britain's

liability in the fund increase. Indeed, beefing up the IMF looks

like being the fig leaf G20 leaders will don before leaving Cannes.

Speaking this morning George Osborne, the Chancellor, said that

was something the British Government was pushing for. I think

we've got a day apart negotiating ahead of us here in Cannes. The

eurozone have to face up to their responsibilities and have to stand

behind their own currency. No one else can do that for them,

including Britain. Then the rest of the world, which includes Britain

but also China and Japan and the like, have to make sure that the

international economic system that is stable and well funded. And that

includes the IMF. That was George Osborne. The eurozone doesn't

really seem to know what it's doing. Can you imagine a bigger mess?

can. So far, this is what muddling through looks like. We haven't got

a complete disaster. Just disaster. Just disaster. There needs to be

degrees of disaster. That sounds like a good joke but distinguishing

between the euro falling completely apart, Greece in a very disorderly

way, not paying any of its debts. That may still happen. Yes, but

that's different from what we've got now, which is a test of whether

the Greek government can hold itself together. Be set up to a

shambles -- it's an utter shambles. There's no guarantee it could get

better, it could get worse. Trying to second-guess what the Greek

political a leader to wing is impossible because they don't even

know themselves. We don't know what's happening to the euro, the

impact on Britain, we don't know what's happening on the world

economy. One thing is certain, the eurosceptics on the Conservative

benches have already clocked that Britain, David Cameron, George

Osborne giving money to the IMF, rather than the European financial

stability fund. He is just using the middleman to possibly bail-out

the euro. The it's not just the Tory eurosceptics. Labour is not

keen on this either. They've stayed at arm's length from this. Ed Balls,

the shadow chancellor, has already said he thinks it should be the

European Central Bank which effectively is supposed to police

the euro, that should be putting forward the money and not the IMF.

No, he has said things which are very similar, not a world away from

George Osborne, of Britain needs to support the IMF, but being careful

about what commitments the IMF should make to Europe. I don't

think it does a lot of good to sit there and say it is all a shambles.

It could be worse. Anything could be worse. They could be a military

coup in Greece. It could be worse. Yes, but we haven't yet got a Greek

default. We haven't yet got a complete abandonment of the attempt

to patch it up. In Greece, they look at Argentina and what happened

to it when it defaulted, they are beginning to wonder if the best way

is to default now. If it only happened in Greece, that's fine.

But the contagion could spread across the entire eurozone. That is

the big point. Let's get the latest on the crisis in Athens from our

correspondent Mark Lowen. Let me ask you a couple of scenarios. If

Mr Papandreou loses the vote tonight, what then happens? Then

the government would collapse, Mr Papandreou would be forced to call

early elections. That is a strong possibility still because, as you

say, it is on a knife-edge. George Papandreou at the moment has a

parliamentary majority of just two. Yesterday, we had three of his MPs

threatening to vote against him in the vote of confidence, mainly

because of one reason. Because he called a referendum earlier in the

week on the latest debt deal for Greece negotiated in Brussels last

week. But within the last hour, the finance minister here as officially

said that he has spoken to his European colleagues to inform them

that the referendum has been scrapped. That will reassure these

three rebel MPs, it will probably persuade them to vote with George

Papandreou. One of them has told me she will vote but George Papandreou,

so he could still come through this by the skin of his teeth. If he

does, does he then proceed, does he go back to plan B and Desi attempt

to implement all the reforms and cuts that have to follow from the

bail-out of the Greek economy agreed on 27th October? What we

think would happen is this. That George Papandreou would get through

the confidence motion and would then, there are indications that he

may then tried to initiate proceedings to form a national

unity government involving his party, PASOK, and the main

opposition New democracy party. The opposite party say they want Mr

Papandreou to resign, they don't want him to be leader. They want

fresh elections. Presumably, any unity government would not have

George Papandreou at the helm. If another leader took over, there

would then be an attempt to vote through the bail-out deal agreed in

Brussels last week to implement the measures. That would be a caretaker

government until fresh elections were called. The big question now

was whether that caretaker government could steady the ship,

could prevent even more political instability year and could allow

Greece to ride through this storm and then received perhaps the next

instalment of its bail-out, 8 billion euros this country would

need by mid- December in order to avoid bankruptcy, and then continue

to try to ride out the financial Thank you very much. We are joined

Quite a lot of ground to cover here. Let me put this to you. Even if the

Greek bail-out now goes ahead, even if the government in Athens

attempts to implement it, I suggest to you it won't work. Yes, I agree.

I don't think it's going to work. That is why the situation is so bad.

Even if what was agreed in the so- called magnificent bail-out deal

last week by the EU, even if that is agreed it would work, it's not

enough. That's because the amount of debt that will be written off

for Greece is just not enough, they would still have far too much debt.

This would only therefore delay the crisis a bit. Secondly, because the

other linchpin of this bail-out plan, the bail-out fund, I think

that has run into a lot of trouble. It was meant to tap the Chinese to

increase its capacity, that doesn't seem to be working. I don't think

that the situation looks very good. At the same time, you have mounting

fears for Italy that are getting worse by the day. Let me come to

you on Italy. It is a much more serious problem and a much bigger

problem. Italian yields are now over 6%. At one stage this week

they were heading to 6.5 % because of fears of the Italian sovereign

debt situation. If they had 7% of his game over, is it not? If they

hit back and stay there for a few days it is probably going to cause

a really big crisis because of the structure of the financial system,

the fact that the exchange on which these bonds are effectively traded

would require more collateral on. These technical reasons would mean

it would precipitate quite a bad crisis. I really think that the

eurozone has to try and maintain this crisis in Greece. That is the

reason why I think there's been such a big psychological shift.

They are starting to realise it may be too late for Greece, regardless

of what happens tonight and tomorrow. It may be too late to

save Greece and keep Greece within the euro. Therefore, the only

chance of trying to avoid a much greater problem, a problem that

could engulf the whole of the global economy, is to cut graceless

and try and do something about Italy and Spain. The problem is

they don't really have a plan to stop the rot from spreading. We've

seen the business about the IMF been called in to start looking at

what's going on in Italy. That is not enough forced a new mentioned

the IMF, let me bring you to my third proposition. It looks like

the IMF is now becoming everybody's get out of jail card, it's what the

G20 will probably concentrate on in their communique today. At my

proposition to you is, is -- it is not the 5th Cavalry. It's not. What

is even more frustrating about this is a week ago the big get out of

jail card was this bail-out fund. Now that the IMF it. I'm pretty

sure that in a few weeks' time it is going to be the European Central

Bank again. The pressure will be bound to -- mountain on them again

to become the lender of last resort for these countries and start

printing money. The problem is they made it very clear yesterday they

don't want to do that, and the Germans are adamant this must not

happen. So I don't see a way out at the moment given the current

structures. It's easy to say, we are going to get the IMF involved

and all of our problems will go away. But we can see from the

history of the IMF that it doesn't really work that way. Does

denouncing you are increasing the firepower of the IMF, that doesn't

achieve anything. We've seen this time and time again over the last

few years. Grand announcements at G20 meetings and so one about the

so-called massive bail-out funds and firepower. In reality, it never

really resolve the crisis, it just delays it. And we're joined by

Sharon Bowles, Liberal Democrat MEP and Chair of the European

Parliament's Committee on Economic and Monetary Affairs. Going back to

Greece, you told us in July that Greece leaving the euro would be

bad for everybody. Do you still believe that? I think if Greece

leaves the euro and the EU, then the fall-out of that and the

contagion could still be very bad indeed. Unfortunately, since July

we have had on going rumbling contagion and some of the things

that men were unthinkable on now becoming more -- more thinkable,

partly as a consequence of action not being definitive enough forced

to has it become the case for both the the German Chancellor and the

French President in particular, that have increased leaving in a

messy way would be bad. Greece staying in is bad. We are in a very

difficult position. They are both bad. We are between a rock and a

hard place. It is quite difficult to workout which is the optimal.

You could have cut Greece lose ages ago, one thinks about it now and in

retrospect maybe that would have looked better. But there is a great

concern that if Greece believes the euro that the markets would just

think, OK, now we will hand on to the next one. Any kind of measure

like that would have to be accompanied by something that was

the action will binding close-up of the rest. But what we are seeing

here is a failure of European leadership. It's not just that

Greece was a problem. The 27th October deal was beginning to

unravel before the ink had dried. The bond markets have already

started to put up the price of Italian yields before Mr Papandreou

had a rush of blood to his head. If the Europeans came up with a shock

and all bail-out fund, a crew euro fund that would be big enough to

protect the countries that are in liquid - Spain and Italy - as

opposed to the countries that are just insolvent, i e bankrupt,

Greece. I largely agree with you. If you look at my past quotes, you

will discover I was there with two trillion at the beginning of the

year. Why can't they come up with that? I think if they come up with

something like that at the beginning of the year it would have

been easier. The problem now up trying to come up with two trillion

is it would potentially undermine the creditworthiness of the

guaranteeing countries, even France would be at risk. Realistically,

they couldn't go beyond what they've already put in without

there being a mechanism to do it, such as these leverage or guarantee

schemes. But they are a little bit fancy and they didn't bring out the

detail at the same time as the announcement. We are still waiting

Is it sustainable for Europe to continue the way it does when quite

clearly behind the scenes you've had the leaders of France and

Germany interfering directly in Greek domestic policies? They have

clearly been at the Finance Minister. They've been speaking to

the opposition. They have been behaving with powers. Some of the

things with Angela Merkel and Nicolas Sarkozy behind the scenes

that we don't like that much, and many of the eurozone member states

don't like it very much, when they don't know what's going on either.

However, I do agree that you had to put some pressure on to the Greek

political parties. If you look at Spain and Portugal, even though

they were having elections, their political parties got their act

together and worked together for stability. In Greece they weren't.

They were always... Sure. But you were part of this project. You were

the one that wanted the eurozone to be created, and wanted us to join

it. You are part of the club class Europe while the Greeks are wall on

the ground in austerity. I don't think that's the argument of the

moment. Give us an apology. Just a small one. I said I made the

mistake of not recognising how our financial market legislation would

undermine the fact that we should have had a bond market that

exercised discipline. Whilst you have zero risk waiting on sovereign

debt you don't get it. You were warned about that at the time but

we were told it wasn't an issue. It seems to me the struggle here is

that, even if Greece proceeds this, problem doesn't go away. The Greek

economy is now 15% smaller than it was three years ago. They are now

asked to take even more austerity. This will just rumble on and it's

the single biggest depressant on the growth of this economy and

other economies around the developed world. If it really gets

serious about Greece leaving the euro, commercial life stop there is,

because because people can't work out what stock they are dealing in

and what it might be worth. point is, there is no resolution of

this, even if the bail-out fund comes back on to the scene. It just

rumbles on and continues to depress any chance of getting growth into

the economy. Italy has to be the point. This is the economic flaw on

the your open. I was always attracted by the political concept

but believed wait and see, prepare and decide, because you haven't got

labour markets Mobility around Europe. You can't move from one

country to another to get a job without the language skills. You

don't get a transfer big enough that you would in Britain if that

country goes down the plan. Maybe Greece would be better in the

medium and long term with a default, with their own currency that can

fluctuate, because they are now locked into a currency that's

making them massively uneconomic. final question to you. The European

Union hasn't been able to do it, the eurozone hasn't been able to do

it, Angela Merkel and Nicolas Sarkozy haven't been able to do it.

Did you really think the IMF is your saviour here? I think the IMF

can play a useful part in this early intervention. I've always

been one of those that believed that the ECB has to be the eminence

grise at the end of the day. Where there is a will there is a way.

Thank you. As I'm sure you know, this week is

the first of the hunting season. Obviously I know, that because it

! Tally-ho! I hear you cry. And no wonder, because six years on from

the ban on hunting with hounds, the practice is alive and well. But are

the foxes? And if not, was it worth it? Adam Fleming caught up with the

man behind the ban. In 2001 Alun Michael was phoned by Tony Blair

with the job offer of Rural Affairs Minister, and the job of banning

fox-hunting. I said I take it you want me the get the legislation

through quickly. He hesitated and said that wasn't quite what I had

in mind. I thought you could search for a compromise. I was taken

abarks because opinions had become so embedded on both sides of the

issue, nobody had been allowed to be neutral, there was such a

passion. Passionate is one word you could

use to describe the argument that followed. Culminating in this

protest outside Parliament by the Countryside Alliance, who claimed

the Government was attacking individual liberty and beating up

on the rural economy. It was very nasty. There was some very violent

people involved in the demonstration. I think the main

problem was that the Metropolitan Police had been given to believe

that these were nice people who were coming up just to exercise

their democratic rights without using violence. And on the day that

wasn't the case. Inside, just as much drama. Five protesters broke

into the chamber, the first non- parliamentarians since the days of

Charles I. It happened as hall lan Michael debated with his shadow.

James Grey was just about to let them through into the open space.

They seemed at a loss as to what to do with it. One stood in front of

me and said, "You, hunting, pension, it's all gone wrong." Sorry, could

you say that again? Also gone was the proposal for a tribunal to

licence individual hunts, replaced with an outright ban. The Bill

ping-ponged fruitlessly between the Commons and the Lords until the

then speaker forced it through using the Parliament Act. THE

SPEAKER: Very to tell the House that I have certified the Hunting

Bill under section 2 of the Parliament Act 1911. So from

February 2005 the hounds have chased fake trails laid by hands.

Some say it is a law often breached. I think over a longer time than my

original tribunal the legislation will have its way and this will be

something consigned to the darker days of our history. I'm not sure

his old boss Tony Blair would toast that. In his memoirs he says he

would have had less trouble if he had proposed euthanasia of

pensioners. Joining us now from Carmarthen is

the Conservative MP, Simon Hart, who used to be the chief executive

of the Countryside Alliance during the fox-hunting wars. Is it fair to

say that the hunts still continue? And that the foxes sometimes still

get caught? Since those days I think there've been 100,000 days'

hunting and it is all pretty confusing. Thing package

highlighted that. I think everybody's attempting to remain

within the law, confusing though it is. Sure enough, I don't think it

always works as well as it should. Is everyone attempting to stay

within the law? I think they are doing their best in the

circumstances but it's not easy. The police say it is very hard to

get evidence to prosecute. The dogs do pick up the scent. It is hard

then to stop them. It is pretty hard to know whether people really

are abiding by the law or are just getting round it? I don't think it

is just the police. The judiciary and the public are saying that it

is complicated and the people doing the hunting. It is a unique law in

that it has managed to upset and disappoint everybody who is

involved, whichever side of the ooct. David Cameron offered a free

vote to restore funding. I think it was a part of the Tory election

appeal. Do you think, do you feel let down he hasn't done that?

Should he do it? It is part of the coalition manifesto, and the

coalition... Why hasn't he done it? We've only been in office 16 months.

Everybody realises there are slightly more pressing concerns at

the moment. This is not exactly something that would be top of the

list of priorities. The PM has been clear, lit happen in the lifetime

of this Parliament, I have no doubt. This is not a satisfactory

situation for anybody, so let's sort it out, this time once and for

all. Do we need to go back on this and have another vote? There this

is an argument for tighten up the law. I remember him predicting the

end of rural life as we know it. That hasn't happened. How did you

know? When were you last in the country? I go there all the time.

You fly over it! I don't own any. Does David Cameron really want to

spend time on having MPs vote on setting dogs on deer and hares?

you have a vote on this? It is not pressing, but I'm a liberal on

these things. You have to set the bar high. I don't like fox-hunting

but I didn't like the legislation. It was a shambles. Let me go back

to our MP here. If you had a vote in the House on this you would

almost certainly lose it wouldn't you? I think there would be a small

majority. It is tight. The numbers are in the too bad. There are fewer

Conservatives who are against hunting than there were back then.

This is nothing to do with your outgoing Defence Secretary? He was

a bit of a blue fox. There are fewer now than there were in 1993.

Fewer foxes or MPs? Fewer Conservative MPs against hunting.

The argument is no longer really about the individual practice but

whether this is good law, whether it is appropriate, whether it works.

The coalition agreement says it, the Prime Minister says it,

everybody realises we are in a really unsatisfactory state of

affairs. Let's sort it out. Are you off fox-hunting this weekend?

I can't get time off from the whips. I didn't know they controlled your

weekend, but at least it will be a good weekend for the foxes.

Coming out of Cannes it looks like there is no real agreement on what

size the new IMF fund should be. They haven't been able to agree on

the scale of the increase. Time now to look back over the week

gone by. There's been a lot of Europe. This is the week in 60

It was all eyons Europe as Greek PM George Papandreou caused financial

shock waves on Monday with his plan for a referendum on the eurozone

bail-out. The chaos in Athens dominated G20 discussions in Cannes,

as France and Germany gave the Greeks a stark option, take it or

leave the euro. No wonder Mr Papandreou dropped his referendum

plan. Back at home, GDP figures were slightly better than.Ed. David

Cameron promised tough action on councils that fail to place

children for adoption quickly enough. The current situation isn't

working Work. And the protest outside St Paul's continued this

week. The Dean became the second clear Tokyo leave.

The offer over public sector pensions wasn't enough to convince