26/03/2012 Newsnight


26/03/2012

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All those protestations that we are all in this together, and it turns

:00:09.:00:12.

out that the going rate for dinner with the Prime Minister is a

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quarter of a million pounds. �100,000 is not Premier League, it

:00:17.:00:23.

is not bad, it is probably bottom of the Premier League. �200,

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�250,000 is Premier League. It must be some meal. Can the

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Conservatives' deputy chairman is buys donors nothing more than food

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and wine. The Government plans to sell part

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of Royal Bank of Scotland to Abu Dhabi, is the taxpayer being short

:00:40.:00:44.

changed. We talk to the world's most powerful woman about being

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Chancellor of Germany, her love of Martin Luther, and being called a

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Nazi by the Greeks. TRANSLATION: I come from a federal

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country, where sometimes northern Germans make remarks about the

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Bavarians, or the Bavarians make comments about the north Germans, I

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am tolerant. More of the same anyone, the Press Complaints

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Commission pleads for its life, claiming self-regulation can keep

:01:09.:01:19.
:01:19.:01:24.

the newspapers honest. At least one Going out to dinner this week? Why

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not go somewhere really special, like Number 11 Downing Street, it

:01:28.:01:33.

will only set you back a quarter of a million or so. Today the

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Conservative Party was forced to disclose the names of a number of

:01:38.:01:42.

wealthy men, who sat at the Prime Minister's dining table after

:01:42.:01:46.

giving a shed load of money. There is nothing illegal about it, but in

:01:46.:01:51.

current circumstances the Government is embarrassed. Nothing

:01:51.:02:01.
:02:01.:02:08.

a political editor enjoys more, Not so much "bring a bottle" as

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"bring a chequebook". Pay to dine with the Prime Minister, that was

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the boast of the former treasurer, Peter Cruddas, the Cameron team

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deny emphatically that it bought policy. I live in a nice flat above

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Number 11 Downing Street up there, what I get up to in there is

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private. Today, to close down the story, Downing Street had to bare

:02:35.:02:39.

all. They clearly decided contrition is a dish best served

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hot. There is much speculation about dinners in my flat in Number

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Ten Downing Street. The position is this, in the two years I have been

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Prime Minister, there have been three occasions on which

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significant donors have come to a dinner in my flat. In addition

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there was a further post-election dinner, including donors, in

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Downing Street itself, shortly after the general election. We will

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be publishing full details of all of these today. None of these

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dinners were fundraising dinners, and none of these dinners were paid

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for by the taxpayer. I have known most of those attending for many

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yearsment The three dinners included more

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than a dozen wealthy attendees, Labour were left asking what first

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attracted the Prime Minister to these millionaires. They wasted no

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time in seeking to extract political gain. Why wasn't the

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Prime Minister turned up to answer questions? Is it because there is

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not enough money on offer? The Labour leader was insensed that

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it is a Conservative peer that has been charged with investigating

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donations. Ed Milliband called for an independent inquiry. An inquiry

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into the Conservative Party, by the Conservative Party, for the

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Conservative Party. Is a whitewash and everyone knows T

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We need a proper, independent inquiry, appropriate to the gravity

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of what is at stake. For some in David Cameron's own party, the

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story points to a deeper discomfort. We have a series of good policy

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that help working-class people, that are designed to help the most

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vulnerable. The problem is not enough people know about it. We

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have the pupil premium, we have council tax discounts and freezes,

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we are allowing people to buy their own homes with over �5,000, and we

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have apprenticeships. At the moment they are a series of clothes pegs

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without a washing line linking them together. We need to do a lot more

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to communicate people that we are the party of the vulnerable, and

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for the hard working-classs, and or aspiration and opportunity. David

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Cameron has long been sensitive to the idea that he's seen as too

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close to the rich. Recently he wanted to talk about the rise in

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the cost of living for families, but he was warned off it by

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internal polling showing it just isn't credible coming from his lips

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W this new �18 million dining club, the problem becomes more acute,

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especially after last week's budget when they cut the 50p rate of tax.

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The Liberal Democrats think he may be in need of a game-changer,

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something to change the terms of debate, that may be party finances.

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Party funding is the bad dish of British politics, uneaten for a

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decade. A fresh set of talks is scheduled to begin this week. The

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last recommendations called for state funding of political parties.

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Sources ruled this out, but believe other recommendations made then,

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such as a cap on donation, to be pretty much right. In his statement

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today, the Prime Minister set out the Conservative Party's opening

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gambit. It would be a cap at �50,000. But according to the most

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recent report, by Sir Ian McKellen, if there were such a cap, the

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Tories would lose 48% annually, and Labour would lose 81%, you could

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see why that was David Cameron's starting position. Alternatively,

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if the Tories accept a �10,000 cap, the level recommended by Kelly,

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that goes up to 76%, less attractive. It is also very

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unattractive for Labour too, their figure goes up to 91%.

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This week, the negotiations will turn on whether union also allow

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Labour to accept trade union members, deciding for themselves

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which party their money goes to. There is pressure from the other

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side too, one former Tory donor doesn't want to see a cap at all.

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It is for this reason, there is a low turnout in elections, that is

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partly because the parties can't get their message across. To get it

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across, they need money. They won't get enough money in other ways. The

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voters don't want to give them any more money, that is clear enough.

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In any case, getting money from Governments, other countries show,

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leads to corruption. There is one gap for many Conservatives scanning

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the seating plan at David Cameron's dinners, the well-off have their

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place at the table, but the fear is, at the next election, the less

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well-off won't feel invited. Michael Fallon is both deputy

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chairman of the Conservative Party, and no changer to the studio, thank

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you for coming back. Will you now investigate every one of the

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donations that happened on Peter Cruddas's watch? Peter Cruddas

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recommended nobody to have dinner, he didn't get anybody through to

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the Downing Street flat. This is one of the first big donations that

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he was trying to negotiate. Yes, we will. We have got Lord Gold, he's

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now a senior lawyer in charge of the disciplinary matters, he will

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investigate what happened. He's also a Tory peer? It is a Tory

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disciplinary matter, he will look at exactly what happened. Any

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evidence the Sunday Times has got, that there are issues here,

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regarding our compliance. I can assure you, the whole thing will be

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fully investigated. I'm worried he might have misled people? Who?

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Peter Cruddas? Yes, he did. Of course he did, that is why he

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resigned. When he said it would be awesome for your business if you

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were to donate? He absolutely misled, he said access to Downing

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Street, influence on policy, all that was wrong, that is

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unacceptable. If you were one of these unfortunate donors who had

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given your party money in the hope it would be awesome for your

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business, or you might have some influence over policy s you should

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really have your money back? ought to have an apology. We make

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it clear to all our donors. Why not money back? We made it clear to all

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donor that is you don't have influence over the party. When

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Bernie Ecclestone gave the Labour Party he had policy changed.

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are talking about Bernie Ecclestone, but that isn't the matter of the

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moment, the matter of the moment is donations to your party. Will you

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give the money back? No. You won't? We made it very clear that what

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Peter Cruddas did was not right. He has resigned, apologised and

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accepted it wasn't right. No money was accepted from him. He has been

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working for you for a year? He was the principal treasurer since last

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month. Let's be clear about that. year? The donation under

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investigation by the Sunday Times wasn't offered, and it wasn't

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accepted. It is the only one that we know about though, isn't it?

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wasn't accepted. It was the only one that the Sunday Times has

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evidence. Have you accepted plenty of others? We have accepted

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donations in the past, they go through very strict compliance

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rules, for example, on where they come from, and donors are told,

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look, this does not get you special access, it does not give you

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influence over policy. He was wrong about that, that is why he resigned.

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The Prime Minister says that if there were a cap of a mere �50,000

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a year in donations, a year, in donations, to political parties,

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that would, as he puts it, take the big money out of politics. Do you

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share that view? Yes, because I think all political parties...You

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Don't think �50,000 a year is big money? All political parties would

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like to have smaller and medium- sized donation, we made that offer

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to the Labour Party. We would lose by it. The alternative is taxpayer

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funding. �50,000 a year, �250,000 per person in the course of a

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parliament is not big money? There are different types of donations.

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Let's be clear about this, the alternative to all of this is

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taxpayer funding. I'm not talking about the alternative. If you don't

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want tax-payers to fund the party. I'm talking specifically about how

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you believe individual donations should be organised. I'm trying to

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get it clear, the sort of world in which you move. �50,000 a year,

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�250,000 in the course of the parliament, is not considered to be

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big money? If you want your politics to be free of state

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funding, the politics cost money you need to be free. We are not

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based on the trade unions like the Labour Party. We accept donations

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from �20 all the way up. Christopher Kelly said it could be

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capped at �10,000? We have made an offer to the Labour Party, who take

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�4 million from one union. We have made an offer to the Labour Party,

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let's stop this. Isn't that important. You are the party that

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keeps on saying "we are all in this together". If you honestly think

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�250,000 in political donations in the course of a parliament, is not

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big money, then we are not all in this together? �50,000 a year, of

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course it is a large sum of money. We take lots of donations, small,

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medium and large. The question you should be asking tonight. Don't

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tell me, it is about the Labour Party? It is not three meals over

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two years. What this country faces tonight is a potential tanker

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drivers' strike by the trade union Unite, which gives 30% of the

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Labour Party's money, elects the Labour Party leader, and you

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haven't yet asked a single question about that. That is for the Labour

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Party. Thank you very much. The taxpayer is about to see

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something for their money. Newsnight has learned that the

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Government is talks with Abu Dhabi in order to sell them a share of

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RBS, the institution that Sir Fred Good win wrecked. They hope to

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conclude a deal by the end of the year. The shares will probably be

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sold at a fraction of the cost to the taxpayer. Not a brilliant

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investment. There might soon be a touch of the

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Middle East about Britain and Scotland's most famous bank.

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Especially if part of it is sold to Abu dab bee, it is the richest part

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-- Abu Dhabi, it is the richest part of the Arab Emirates. It has

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gone on to become one of the richest statelets of the world, on

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the back of an abind dance of oil. At Park Lane, one of the most

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expensive places in the world, a home to the Abu Dhabi bank and

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wealth fund, with a war chest of billions. More than enough to buy a

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portion other all of RBS, worth a more modest �17 billion. The

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political fall-out of selling at a loss could be massive for the

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Government. Having bought shares on average at 50p a share, selling at

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today's 28p a share, won't be great, especially at a time of Austerty.

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Add in that Northern Rock was sold at a loss to Virgin Money, and the

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critics are sharpening their tongues. We need to make sure we

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get the full amount of money back the taxpayer invested in the first

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place. If we have a hastey approach by the Chancellor, there is a risk

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to lose millions of taxpayer money. That would be very, very wrong. And

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it would be better if we waited for the economy to recover for the

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shares price to recover, so we got better value for money.

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But there are also notable advantages in selling a chunk of

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RBS. It will send a strong signal to the markets that the Government

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does not want to be in the bank- owning business for the long-term.

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It might allow the Government to deflect political pressure for the

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annual bonus row coming around. Having another large and not so

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democratically accountable shareholder has its advantages.

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market reaction would be positive to this move. I think it

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demonstrates some clever thinking on behalf of the Government. That

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rather than just selling out, and possibly not getting full value for

:14:36.:14:40.

its stake, it is working stragically with some very rich,

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very wealthy, very powerful funds, such as Abu Dhabi, in crystalising

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this value. Unlike Norway or other sovereign

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wealth funds, Abu Dhabi doesn't make its investments through a

:14:53.:15:00.

single entity or fund, but rather uses a number of vehicles to do so.

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The highest-profile is the be ady dab bee Investment Authority, owned

:15:04.:15:08.

by the ruling -- Abu Dhabi Investment Fund, owned by the

:15:08.:15:16.

ruling family. IPIC is another one, owning shares

:15:16.:15:26.
:15:26.:15:28.

in a company in Spain. And then Daimler and Galactic with AAbar.

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The shaik has bought Manchester City, we has he bank rolled to

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almost topple mapblt. I think Abu Dhabi will be in the bank for the

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long-term. That is what kind of investment these sovereign wealth

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funds make. It is the right policy from their point of view. They can

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afford to buy something that looks like it will turn around. And wait

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for it to do so. But so can the UK Government. And it is surprising

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that we are not waiting for the results of the restructuring to

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have this the effect. The chair of the select committee

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thinks the sell-off process shouldn't be delayed. We will want

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to look very closely at the terms of the sale, to make sure it holds

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good value for money for the taxpayer. Just as we have looked at

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every other aspect of these enforced nationalisations. It does

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stpriek me as -- strike me as sensible to take an opportunity if

:16:25.:16:32.

it is there, to reduce the shareholding at some point. At 80%,

:16:32.:16:35.

the itch to intervene by the Government is always there. The

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best prospect for the taxpayer, and in the end, for the retail bank

:16:39.:16:43.

user, lie in RBS being run as a fully commercial company. Even

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though it is the subject of talks between the Government and Abu

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Dhabi, RBS has no direct say in the outcome. That is strange because

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the people who benefit most will be the bankers that work there. The

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most senior guys are paid mostly in shares, that could recover strongly

:17:01.:17:07.

that all depends on RBS, Britain and Abu Dhabi avoiding the kind of

:17:07.:17:10.

economic shocks in the next few years, we have already seen in the

:17:10.:17:13.

past few years. To try to make sense of some of

:17:13.:17:23.
:17:23.:17:28.

this are the coalition's answer to the two -- Two Ronnies. This is �4-

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�5 billion of tax-payers' money being thrown away? I don't think it

:17:32.:17:35.

is, we haven't heard anything concrete, but the most important

:17:35.:17:38.

thing and there should be strong agreement on this, is we get as

:17:38.:17:44.

much money back for this bank as possible. But there will be a

:17:44.:17:47.

significant loss? Well, who knows. Billions of pounds? When the money

:17:47.:17:54.

was put into this bank, everybody knows that it was put in, not to

:17:54.:17:59.

try to get a good investment, it was put in to keep the bank upright.

:17:59.:18:08.

So, we heard the Labour character on the film saying that if it was a

:18:08.:18:12.

loss it would be a disaster. It is true to say the nationalisation of

:18:12.:18:18.

RBS was a disaster, the point is from here how to get the best value

:18:19.:18:22.

deal. But it will be sold at a loss? We don't know that, we know

:18:22.:18:26.

that the shares are trading below the price they were bought at.

:18:26.:18:32.

Remind us of the price they were bought at? 50p, on average, around

:18:32.:18:37.

60p. And they are now trading at about 28p? Every penny on the share

:18:37.:18:41.

price is a billion pound of taxpayer money. Getting have a

:18:41.:18:46.

value for money out of it is really important. Every penny on the share

:18:46.:18:50.

price is a billion pound adrift. billion of your money and my money

:18:50.:18:54.

and every viewers' money. argument being, I suppose, on the

:18:54.:18:58.

other side, that it is no business of a Government to run a bank?

:18:58.:19:02.

we have got to run that bank, and we have to go on running it for

:19:02.:19:05.

some time to come. We have to make sure it runs in the national

:19:05.:19:11.

interest. Now, the issue is not about getting our money back quick,

:19:11.:19:16.

as Matthew said. We put the money in at 50p, the reason was, to stop

:19:16.:19:20.

the economy collapsing, and make that bank lend. It is still not

:19:20.:19:24.

doing it. It failed its lending targets under Project Merlin, the

:19:24.:19:30.

economy is flat, partly because the banks, and RBS is the biggest small

:19:30.:19:34.

business lender, is not lending as it should to create jobs and

:19:34.:19:36.

businesses. That is absolutely the vital. That is what matters. There

:19:36.:19:41.

is no rush at all. Selling it is the wrong thing to do? Certainly at

:19:41.:19:47.

the moment. To crystal yois a loss when you put the money in at --

:19:47.:19:54.

crystalise a loss, when you put the money in at 50p and selling it at

:19:54.:20:00.

less than 30p. What it is meant to do is tie bonuses to proper lending

:20:00.:20:03.

performance. At the moment we are lurching from month to month, and

:20:03.:20:08.

year to year, without a proper plan. What will be the effect of the

:20:08.:20:13.

price on the remaining shareholder the taxpayer has on this bank, of

:20:13.:20:18.

selling something now? It may be good. We have to have a more

:20:18.:20:20.

sophisticated analysis than the one put forward. It may be that if you

:20:20.:20:26.

sell a small chunk now it has a positive impact. Investors can see

:20:26.:20:31.

this is on its way back to private ownership, and obviously we know

:20:31.:20:35.

from the past, that if the Government tries to run a bank

:20:35.:20:38.

directly, or run businesses directly, it gets into all sorts of

:20:38.:20:42.

trouble. You don't want politicians making decisions about whether RBS

:20:42.:20:47.

should lend. We could hardly do worse than the decisions RBS made

:20:47.:20:52.

itself? In terms of the lending targets, RBS actually did hit its

:20:52.:20:56.

Merlin target. It did not. That is rubbish. On small business that was

:20:57.:21:03.

the only one it didn't hit, where it lent �74 billion since a �75

:21:03.:21:05.

billion target. The small businesses matter. They should be

:21:05.:21:09.

lending much more. We said in our coalition agreement, that you

:21:09.:21:13.

signed as well, that we should consider net lending targets for

:21:13.:21:18.

the nationalised banks, and frankly, that is exactly what we have to do.

:21:18.:21:21.

I didn't personally sign the coalition agreement, but I

:21:21.:21:25.

certainly standby it. In small businesses it matters, big business

:21:25.:21:29.

can borrow from s they are not -- anybody, they are not the problem.

:21:29.:21:33.

In your constituencies they are coming and telling all the time

:21:33.:21:35.

soon, that perfectly viable businesses are being squeezed, and

:21:35.:21:39.

cannot get a loan. Very often it is RBS still the big problem. This is

:21:39.:21:43.

what is holding back the economy, in a very big way, it is not about

:21:43.:21:48.

whether we get 30p or 40p back when they sell the shares, or 50p, it is

:21:49.:21:52.

about making the banks lend, and Royal Bank of Scotland in

:21:52.:21:57.

particular supports business and jobs, that is still vital. Each of

:21:57.:22:01.

the pennys is a billion pound, that matters. If we can sell off the

:22:01.:22:05.

business now and it has a positive advantage on the share price, that

:22:05.:22:09.

is good. On small businesses 74 out of 75 isn't quite hitting the

:22:09.:22:12.

target but close to it. Don't lecture me about small business, I

:22:12.:22:19.

grew up in a small business. not lecturing, I'm telling you what

:22:19.:22:23.

happens. It nearly went under. Because of issues with banks, the

:22:23.:22:29.

importance of lend to go small business can't be overestimated.

:22:29.:22:37.

You doesn't improve the performance. You can't improve a performance of

:22:37.:22:40.

a bank by getting politicians directing where the money goes.

:22:40.:22:44.

are not directing where the money goes, but we own the bank, and we

:22:44.:22:47.

should be setting overall lending targets, and making them perform,

:22:47.:22:51.

that is what the Swedes do, the Swedish Finance Minister is very

:22:52.:22:58.

good at it, we are being very weak. The men and women who determine the

:22:58.:23:03.

fate of nations by how they gamble on currencies, smile their smiles,

:23:03.:23:07.

on the Chancellor of Germany today, she said Germany is willing to make

:23:07.:23:11.

yet more money available to the bailout fund to protect the euro.

:23:11.:23:14.

No other European figure can wield the power or command the attention

:23:14.:23:18.

in the way Angela Merkel does. It is perhaps because of that, that

:23:18.:23:21.

she gives interviews extremely rarely. But she has spoken to

:23:21.:23:26.

Newsnight. She's the daughter of a pastor, and first, we have been

:23:26.:23:29.

wondering whether the great religious divide in Europe may yet

:23:29.:23:39.
:23:39.:23:40.

determine its future. Exactly 500 yiers ago, in Wittenberg, a --

:23:40.:23:45.

years ago, in Wittenberg, one of Europe's leading thinkers was

:23:45.:23:51.

growing increasingly alarmed. Hard working German tax-payers were

:23:51.:23:56.

being fleeceed of their cash. It went to pay for a vain, glorious

:23:57.:24:01.

European project in southern Europe, run by foreigners far away. And

:24:01.:24:06.

many Germans decided, probably being wasted. That man was Martin

:24:06.:24:12.

Luther, who 500 years ago, famously nailed his 95 thesis, rebelling

:24:12.:24:17.

against the Pope, on that door in the church in Wittenberg. He

:24:17.:24:21.

brought about the reformation, which not only shrook Germany to

:24:21.:24:25.

its foundations, but the whole -- shook Germany to its foundations

:24:25.:24:30.

but the whole of Europe. Luther in his heart wanted to remain a good

:24:30.:24:33.

Catholic, but in his heart he thought the money was being wasted.

:24:33.:24:42.

When it came to an argument about economics or politic, economics won.

:24:42.:24:46.

So, does that remind you of anyone? The most powerful woman in the

:24:46.:24:53.

world, the first woman Chancellor of Germany is the daughter of a

:24:53.:24:56.

Lutheran paster, steeped in the Protestant values of thrift, hard

:24:56.:25:02.

work and behaving responsibly. One of the reasons why Angela Merkel

:25:02.:25:08.

remains personally popular in Germany, is for all her power, she

:25:08.:25:11.

remains like a housewife in Germany. That puts her economics at odds

:25:11.:25:17.

with her political desire to be a good European, like Luther.

:25:17.:25:24.

Nowadays, even if modern Germany is decided by Catholics, Lutheran, and

:25:24.:25:34.
:25:34.:25:35.

others, even some atheists are Lutheran aitists, they don't

:25:35.:25:44.

believe in that form of God. The rooms beside Luthur's own house,

:25:44.:25:48.

his followers are the backbone of the economy. Hard working business

:25:48.:25:53.

people, teachers, professionals, sharing a similar east German

:25:53.:25:58.

background with Angela Merkel. Tonight rehearsing Luther's

:25:58.:26:05.

favourite hymn, A Strong Fortress Is Our God. Just like Chancellor

:26:05.:26:08.

Merkel, they believe in Christian charity towards others in need. But

:26:08.:26:15.

perhaps they can say what their Luthurian Chancellor cannot, that

:26:15.:26:18.

their patience with the financial mess in Europe is wearing thin.

:26:18.:26:24.

think they should have checked upon those countries before they joined

:26:24.:26:27.

the European community, of course we are a bit fed up at the moment.

:26:27.:26:32.

We have to watch the Greeks and the Spanish and other countries very

:26:32.:26:36.

closely. If somebody pays a bill, he should also set the rules. And

:26:36.:26:42.

others should follow. Which isn't happening now? No, but

:26:42.:26:50.

we should never give up hope. That's a very Luthurian thing to

:26:50.:26:55.

say! The core of Luthurianism was to question authority, then of the

:26:55.:26:59.

Pope, now, also, the German Government, and the management of

:26:59.:27:06.

the European currency. This is the living room, the only

:27:06.:27:11.

room originally preserved. Modern Wittenberg is so proud of its most

:27:11.:27:17.

famous rebel, they called themselves "Luthur's Town" and

:27:17.:27:23.

preserved his home as a museum. was one of the very few theologians

:27:23.:27:26.

deeply connected with every day life. With the question of a

:27:26.:27:30.

transfer of money to others, who can't help themselves, this only

:27:30.:27:36.

can happen if those people who get the gift really make efforts to

:27:36.:27:42.

change their own situation. So it is help to self-help, this is the

:27:42.:27:47.

core of Luther's social ethics. still today, it is something people

:27:47.:27:53.

would understand today in German right now? Exactly. The pianist and

:27:53.:27:56.

conductor, Daniel Barenboim, has lived and worked in German for the

:27:56.:28:01.

past 20 years, he's also one of the sharpest observers of German

:28:01.:28:06.

culture. One of the main pillars of German education, the families,

:28:06.:28:10.

they teach their children, I'm going to say it bluntly and

:28:10.:28:16.

insulting, I'm sorry, I don't mean it like this, it is not the value

:28:16.:28:21.

of generosity, but the value of saving. But it is not in their

:28:21.:28:24.

culture to teach the children that when they grow up and they are

:28:24.:28:29.

invited somewhere for dinner, that would be nice to bring flowers or

:28:29.:28:38.

chocolates as a gesture of being a good guest. I believe very much

:28:38.:28:41.

that political attitudes are result of the personal that people educate

:28:41.:28:51.

themselves, and their children. The modern German dilemma is this,

:28:51.:28:55.

Angela Merkel was born into a country destroyed by Hitler and

:28:56.:28:59.

divided by Stalin. The core of her politic is to be a good European

:28:59.:29:03.

and not make the same mistakes again. The core of her economics is

:29:04.:29:08.

pure Luther, it is Conservative and thrifty. That means her dilemma is

:29:08.:29:12.

when will ordinary Germans tire of throwing good German money into a

:29:12.:29:19.

European pit, for someone else to spend. Chancellor Merkel always

:29:19.:29:22.

reminds us, that for Germans, the European project is a political

:29:22.:29:28.

choice, therefore, it must not fail. Devout Catholics, including Martin

:29:28.:29:35.

Luther thought the same about the church of Rome, until the

:29:36.:29:39.

Reformation became unstoppable. The unthinkable is unthinkable until it

:29:39.:29:45.

happens. I caught up with Europe's most

:29:45.:29:49.

powerful politician in the German Chancellor in the centre of Berlin,

:29:49.:29:55.

a few minutes from the historic Reichstag. It was a very rare

:29:55.:29:58.

interview. Merkel's Christian Democrats are not very popular

:29:58.:30:02.

right now, but she herself is very much admired. She's seen as honest,

:30:03.:30:09.

low-key and pragmatic. She told me, in perfect English,

:30:09.:30:14.

that she would enjoy our small gift of British tea and biscuits, but

:30:14.:30:20.

she chose to be interviewed in German. I have been talking to many

:30:20.:30:28.

German people, including in lut -- Luther Town in Wittenberg. The one

:30:28.:30:35.

thing they all say is they are becoming more and more irritated,

:30:35.:30:40.

like Luther, raising money that is going far away and being spent by

:30:40.:30:44.

people they don't really trust. Do you share their irritation?

:30:44.:30:49.

TRANSLATION: No, I'm not irritated. We have to think carefully about

:30:49.:30:52.

how and where we spend money, how we shape our future. We are not

:30:52.:30:56.

making politics for the past, but for the way people live today, and

:30:56.:31:02.

how we wish them to live in future. We have to be very careful not to

:31:02.:31:09.

live beyond our means. Democracies all over the world have grown used

:31:09.:31:13.

to often spending more than they have in revenue. That is something

:31:13.:31:16.

no private household or family can afford to do long-term. In politics

:31:17.:31:22.

you must used the same principles that you employ at home. One of the

:31:22.:31:26.

things people also say, is they fear another bailout, and another

:31:26.:31:30.

bailout, and it won't just be Greece who wants a third bailout,

:31:30.:31:33.

but it will be another country, perhaps, it is endless. Can you say

:31:33.:31:39.

enough is enough, this is the end? TRANSLATION: That's not how it is

:31:39.:31:43.

going to happen. Because there has been a re-think going on in Europe

:31:43.:31:48.

for some time. Some countries accepted the rescue package, but

:31:48.:31:51.

they don't particularly relish it. They must follow conditions set out

:31:51.:31:56.

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

:31:56.:32:00.

democratic Government wants to be in that situation for the duration.

:32:00.:32:03.

Over the past two years in Europe, particularly in the eurozone, we

:32:04.:32:08.

have learned a lot. We must reflect time and again why

:32:08.:32:13.

we are together in Europe. Why are we a community that displays

:32:13.:32:16.

solidarity and bears responsibility for the others.

:32:16.:32:22.

I look at the world as a whole. The world is different from the 1950s,

:32:22.:32:29.

we no longer have 2.5 billion people on this planet, with �500

:32:29.:32:38.

million Europeans, we have �7 billion and -- 7 seven billion

:32:38.:32:46.

people, and 5 -- five billion Europeans. The 7% share values of

:32:46.:32:50.

democracy, freedom of opinion, freedom of the press, freedom to

:32:50.:32:56.

travel, and freedom of faith and religion. Preserving freedom

:32:56.:32:59.

against those who think differently, is a good reason to get together

:32:59.:33:04.

and say, we want to stand up for these principles, this is what

:33:04.:33:09.

guides us in Europe. You are clear about your hopes for the future,

:33:09.:33:13.

yet some repeat the same old cliche of the past. I noticed recently

:33:13.:33:18.

some in Greece, the newspapers and so on, have been saying this is the

:33:18.:33:23.

German boot on our head, and going back to the stereotypes of the Nazi

:33:23.:33:28.

past. Is that not offensive to you and the German tax-payers who are

:33:28.:33:31.

paying for this? TRANSLATION: a very sense situation right now.

:33:32.:33:38.

Europe in particular, the euroarea is in crisis, it shritered into

:33:38.:33:42.

crisis as a consequence of the European financial crisis s and it

:33:42.:33:45.

has brought about very difficult discussions in many countries. The

:33:45.:33:49.

European discussion over the euro has become almost domestic policies.

:33:49.:33:54.

We debate harshly in our politic, and use tough words, that has

:33:54.:33:58.

character yoised Europe-wide debates too -- characterised

:33:58.:34:01.

Europe-wide debates, maybe it is something at the back of people's

:34:01.:34:08.

minds, luckily we have been able to solve our arguments peaceful low

:34:08.:34:12.

and turn each argument into an opportunity.

:34:12.:34:17.

I come from a federal country, where times northern Germans make

:34:17.:34:23.

remark about the Bavarians, or the Bavarians make remarks about the

:34:23.:34:27.

northern Germans. I'm tolerant, I think one ought to find solution

:34:27.:34:31.

about these problems, to talk about them and try to convince people.

:34:31.:34:41.
:34:41.:34:41.

That is also our European task. When you use words like thriftyness,

:34:41.:34:44.

and savings measures, these are exactly what many people in Britain

:34:44.:34:48.

think is the right thing to do. But they tend to be euro-sceptics, they

:34:48.:34:53.

tend to think because of that, because they think you are right on,

:34:53.:34:57.

that the euro itself will, in the end, have to fall apart, because so

:34:57.:35:00.

many other countries don't believe it, including, perhaps, France in

:35:00.:35:10.
:35:10.:35:12.

the future. TRANSLATION: Maybe some people in

:35:12.:35:17.

Britain have a few prejudices leftover, about which country can

:35:17.:35:23.

do what. The UK has a strict austerity drive, I think David

:35:23.:35:26.

Cameron was right to do that. It is something that each country in

:35:26.:35:30.

Europe can do, we will learn no country can live beyond its means.

:35:30.:35:34.

We have learned this from the global financial markets. Otherwise

:35:34.:35:38.

global investors decide not to have confidence. Once the markets lose

:35:38.:35:46.

confidence, we pay a heavy price. All European countries have

:35:46.:35:49.

understood this lesson, and have to pave the way for political

:35:49.:35:53.

decisions. In Britain there have been protests. Protests have

:35:54.:35:58.

started in other countries. But we in the eurozone are convinced that

:35:58.:36:06.

together we are much stronger. We get so much benefit from the

:36:06.:36:11.

common currency, that we want to respect the common rules set out in

:36:11.:36:15.

the fiscal pact, for example. you have a German vision for the

:36:15.:36:19.

future of Europe, in which Britain will play a bigger role than it is

:36:19.:36:24.

now, given it is almost politically impossible for Britain to envisage

:36:24.:36:27.

being part of the eurozone, that isn't going to happen. Where can

:36:27.:36:31.

Britain fit in better? Britain plays a very important role

:36:31.:36:37.

in Europe. The UK is part of the single market, and the common

:36:37.:36:41.

climate policy. Britain has a lot of common ground with Germany, on

:36:41.:36:46.

how we see the future of free global trade. We all benefit from T

:36:46.:36:51.

at the end of the day, the British have to decide for themselves to

:36:51.:36:55.

what extent they wish to be part of Europe.

:36:55.:36:58.

It is a discussion that we have seen, unfortunately, taking a

:36:58.:37:03.

painful turn on the fiscal pact. But Britain needs to know that we

:37:03.:37:07.

in Germany, want a strong Britain in the EU. We always have, and we

:37:07.:37:13.

always will. In Germany we try to see there is

:37:13.:37:16.

less red tape, more political decisions and more transparency. I

:37:16.:37:21.

think that we are at one on this with Britain.

:37:21.:37:25.

There are those who think, including some in Greece, that it

:37:25.:37:29.

would be almost kinder to let Greece go. Europe would sur rife

:37:29.:37:33.

and Greece would do better, and the prospect of pain in Greece and

:37:34.:37:37.

elsewhere can't be ruled out? Greece has to imand again explained

:37:37.:37:43.

it wants to remain in the euro. It has major weaknesses, but it is

:37:43.:37:48.

trying to overcome them, be they in the administration, or the

:37:48.:37:51.

competitiveness in their business community. It is going to be a long

:37:51.:37:58.

and arduous road. We have taken the decision to be in a currency union.

:37:58.:38:05.

This is not only a monetary decision, it is a political one.

:38:05.:38:08.

It would be catastrophic if we were to say to one of those who have

:38:08.:38:14.

decided to be with us, we no longer want you. Incidently, the treaties

:38:14.:38:18.

don't allow for that any way. People all over the world will ask

:38:18.:38:24.

who will be next. The euroarea would be incredibly weakened. The

:38:24.:38:26.

export nation, Germany in particularly, benefits from the

:38:27.:38:34.

euro, it would be a huge political mistake to allow Greece to leave.

:38:34.:38:38.

That is why we will be clear with groz, we will say, if you want to

:38:38.:38:41.

be -- Greece, we will say, if you want to be part of a common

:38:41.:38:45.

currency, you have to do your homework, but at the same time, we

:38:45.:38:51.

will always support you. Many British viewers see you as the most

:38:51.:38:54.

powerful politician in Europe, the most powerful woman perhaps in the

:38:54.:39:03.

world. They wonder are male leaders still sexist towards you and others

:39:03.:39:06.

women? No, I don't have that impression at all. It it is

:39:06.:39:09.

becoming more and more of a normal thing. We used to have many fewer

:39:09.:39:13.

women, but now we have a Danish Prime Minister, a Lithuanian

:39:13.:39:18.

President, and you in had Britain have had your own very good

:39:18.:39:23.

experience with a female Prime Minister in the past. Women in the

:39:23.:39:33.
:39:33.:39:33.

past forged ahead and paveed the way for us. Should there be

:39:33.:39:38.

prejudices, many male colleagues don't feel those pred siss any more.

:39:38.:39:42.

-- prejudices any more. Chancellor, thank you very much.

:39:42.:39:48.

Bitte schoen. Bitte schoen. More from ganch in Germany later in

:39:48.:39:52.

the week, and -- Gavin in Germany later in the week.

:39:52.:40:00.

You can hardly move these days for people waving sheets of

:40:00.:40:04.

prescriptions for what is wrong with the press. Tomorrow the joint

:40:04.:40:09.

parliamentary inquiry delivers its diagnosis, how seriously anyone

:40:09.:40:15.

will take a committee, whose members range from the queen's

:40:15.:40:22.

worker and the MP who head butted someone in the Westminster's bar.

:40:22.:40:26.

Many people, including Hugh Grant, are worried self-regulation is here

:40:26.:40:31.

to say. Lord Hunt couldn't make it tonight,

:40:31.:40:38.

he does have some ideas. Recognise it? It is Fleet Street. For decades

:40:38.:40:43.

voluntary press orgss have existed, they claim, to maintain standards

:40:43.:40:51.

of ethics in Germany. Still the scandals come, can Fleet Street in

:40:51.:41:01.
:41:01.:41:02.

2012 be trusted today carry out its Undeterred, Lord Hunt has unveiled

:41:02.:41:08.

his new system of self-regulation, for a revamped Press Complaints

:41:08.:41:11.

Commission. No statutory underpinning, in other words, no

:41:11.:41:17.

new law to enable judges to find papers for any deemed breaches.

:41:17.:41:22.

Instead, a new called enforcement compliance arm would be activated,

:41:22.:41:28.

if there was evidence of a serious breakdown in standards. The

:41:28.:41:32.

toughest measure would have a panel of experts investigate, and make

:41:32.:41:37.

any paper found guilty cover the cost of the investigator's time.

:41:37.:41:40.

Hunt wants to emphasise the importance of individual

:41:40.:41:44.

responsibility. With a named individual responsible for

:41:44.:41:49.

maintaining ethical standards in the paper. Hugh Grant is an

:41:49.:41:55.

international film star, best known for his appearances on Newsnight!

:41:55.:42:01.

And you are a Newsnight presenter best known for your performance in

:42:01.:42:05.

Bridget Jones Diary. You have spoken to Lord Hunt today about his

:42:05.:42:09.

wheeze, what do you think of it? think that Lord Hunt's heart is in

:42:09.:42:13.

the right place. It is the place where every heart should be. In his

:42:13.:42:19.

chest? He's a great defender of freedom of the press, rightly so.

:42:19.:42:26.

But I and my fellow campaigners, and I suppose, the victims that we

:42:26.:42:32.

represent, have grave problems with his notion of how you enforce this

:42:32.:42:37.

new regulatory system. He has with a system that would be done through

:42:37.:42:41.

contract law, rather than the dreaded statute. My legal friend

:42:41.:42:47.

friends, who know much more about this than -- my legal friends who

:42:47.:42:52.

know much more about this than me, are worried about doing that. It

:42:52.:42:56.

doesn't take care of the Desmond problem, why would they sign up to

:42:56.:42:59.

the contracts if they didn't want to. This is Richard Desmond, who

:42:59.:43:05.

owns the Daily Express, and doesn't belong to the PCC? He turned his

:43:05.:43:10.

back on it, and said he didn't care. I don't see how this system so was

:43:10.:43:16.

that problems. Equally, the legal friend don't really see what the

:43:16.:43:23.

big penalty is, for breach of contract. Hunt draws parallels

:43:23.:43:27.

between the clubs' relationship with the Premier League. If you

:43:27.:43:30.

breach your contract with the Premier League football team, you

:43:30.:43:33.

are out of the Premier League. It is a huge penalty. If you breach

:43:33.:43:39.

your contract under the Hunt system, you can't be thrown off. Nothing

:43:39.:43:46.

can really happen. If people are members of the PCC, and the PCC can

:43:46.:43:51.

decree that apologise are issued, where it deems them necessary.

:43:51.:43:58.

Where they are displayed, the prominence they are given, that

:43:58.:44:02.

restitution is given, it doesn't cost people to go and see it, what

:44:02.:44:08.

is wrong with that? Nothing, so long as the newspaper being

:44:08.:44:13.

admonished can't just stick its finger up and say OK. There is no

:44:13.:44:17.

real penalty for me. You are for the Government taking over control

:44:17.:44:23.

of the newspapers? I knew you were going to put it like that.S That

:44:23.:44:30.

the alternative? It is such an oversimplification, thinking it is

:44:30.:44:37.

Zimbabwe at one end and free-for- all at the other. You do want

:44:37.:44:41.

statutory regulation? The answer lies somewhere in the middle of the

:44:41.:44:45.

two screens. There is examples all over the world. The Irish have a

:44:45.:44:50.

mid-system that works quite well, it is statutory regulation with a

:44:50.:44:54.

light touch. Otherwise there really is no way you can enforce your

:44:54.:44:58.

system of regulation and code of ethics, that is proved over and

:44:58.:45:03.

over again. For 60 years self- regulation has failed five times.

:45:03.:45:08.

Supposing a newspaper acted in what was judged to be an improper

:45:08.:45:14.

fashion, what sanctionss can be applied under your ideal stratry

:45:15.:45:22.

information. Fines, but significant ones. Fines levied by whom? By the

:45:22.:45:26.

regulator. If there was a problem with the newspaper saying who are

:45:26.:45:32.

you. They could apply to a statutory backstop behind them,

:45:32.:45:36.

Ofcom or something similar, and say, no, this is now the law. You do

:45:36.:45:44.

have to comply with this. In an ideal world the press should

:45:44.:45:48.

be self-regulating. It is only looking at history and the

:45:48.:45:52.

continued failure of it, it has come to this. You wo regulate

:45:52.:45:59.

newspapers? It is light regulation. Magazines? Yep. Newspapers on-line,

:45:59.:46:04.

blogs, I don't think you get as far as blogs but newspapers on-line.

:46:04.:46:09.

What is the difference? There is an area to go what exactly is, I think

:46:09.:46:12.

when you look at a newspaper on- line, you know you are reading a

:46:12.:46:17.

newspaper. If you go to Huffington Post, you know you are reading a

:46:17.:46:22.

newspaper. If you go to a massive, well publicised blog that maybe

:46:22.:46:25.

needs regulating, but when it is small and can't influence people

:46:25.:46:30.

too much, it probably falls outside that line. I suppose you have

:46:30.:46:35.

millions following a Twitter stream? I think Twitter does now,

:46:35.:46:41.

as it does, fall within the civil law of libel, et cetera. I don't

:46:41.:46:47.

see there is any reason why that should fall outside that. But,

:46:47.:46:55.

liable of course, like all civil law is expensive. That is why you

:46:55.:47:00.

need a regulator. The same applies to Swithenbanker? Maybe you do

:47:00.:47:04.

regulate Twitter rb these are the problems that Levein is wrestling

:47:04.:47:10.

with now. I think he, much more importantly than the privacy

:47:10.:47:20.
:47:20.:47:21.

committee that reports now is the one to listen to.

:47:21.:47:30.

The Darts legend Jackie willson -- jockey willson died this weekend.

:47:30.:47:40.
:47:40.:48:14.

# I'm in heaven After some record-breaking March

:48:14.:48:17.

After some record-breaking March warmth across Scotland, the chill

:48:17.:48:20.

sets in tonight, cold start to the morning.

:48:20.:48:23.

That will clear by mid-morning, once again, barely a cloud in the

:48:23.:48:30.

sky for many of you. Temperatures rising accordingly, 22 across much

:48:30.:48:36.

of England. Compared to the chilly weekend it will feel warmer. Same

:48:36.:48:43.

across East Anglia, temperatures struggling to the low teens. 21-23.

:48:43.:48:47.

Warmth in South-West England, tempered by the fact there is a

:48:47.:48:50.

fresh, south-east breeze off the English Channel. The wind light

:48:50.:48:55.

through Wales. Another warm sunny one. The north kofs Northern

:48:55.:48:59.

Ireland best favoured for the highest temp -- coast of Northern

:48:59.:49:09.
:49:09.:49:26.

Ireland, best favoured for the high Mist and fog, maybe parts of

:49:26.:49:31.

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