30/05/2012 Newsnight


30/05/2012

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Hello, within weeks, Greece could have tumbled, stalked, or been

:00:13.:00:18.

chucked out of the euro. An intense nervousness, panic in some places,

:00:18.:00:22.

is at large. All of us will be affected. Tonight, how it could

:00:22.:00:26.

happen and what will be the consequences. If Spain falls apart,

:00:26.:00:30.

will the face of Europe be changed forever. We have the Nobel Prize-

:00:30.:00:34.

winning economist, Paul Krugman here, the Harvard economist,

:00:34.:00:42.

Kenneth Rogoff, and from Athens, former Greece politician, Giorgos

:00:42.:00:45.

Papakonstantinou. Many think that the Germans will

:00:45.:00:48.

soon blink, that forcing Greece out of the euro will be unthinkable,

:00:48.:00:52.

what if they are wrong? We will tackle the question whether

:00:52.:00:55.

George Osborne's medicine for this country is not so quietly killing

:00:55.:00:58.

the patient. The Government's central aim is to

:00:58.:01:02.

cut the deficit and establish international credibility, what if

:01:02.:01:04.

the eurozone crisis means they can do neither.

:01:05.:01:08.

We will hear from Dublin, where they are being asked to vote for

:01:08.:01:15.

long years of austerity, to atone for their bankers' sins. David

:01:15.:01:18.

Cameron's former Director of Communications, Andy Coulson, has

:01:18.:01:21.

been charged with perjury tonight, after being questioned by police in

:01:21.:01:29.

Glasgow. We will have the latest.

:01:29.:01:33.

The world's biggest company, ensuring people who export goods,

:01:33.:01:36.

said today it was no longer covering anyone who wants to send

:01:36.:01:40.

stuff to Greece. Nothing will change before the election there on

:01:40.:01:44.

June 17th, and the latest opinion polls show the biggest parties in

:01:44.:01:48.

favour and against the bail out are at absolutely level pegging. Which

:01:48.:01:52.

is no help to anyone, really. In the meantime, there is talk of

:01:52.:01:55.

power cuts because there is no money to pay energy suppliers. So

:01:55.:02:01.

the rest of the eurozone, now contemplates something we were told

:02:01.:02:07.

was inconceivably, recently, that like a bad kebab, Greece is vomited

:02:07.:02:11.

out of the single currency. What happened today? Almost every day

:02:11.:02:15.

brings headlines to which the subtext is, confusion, lack of

:02:15.:02:22.

focus, unreality, incompetence, general clutching at straws, as the

:02:23.:02:27.

train hurtles towards you. Today was no different. You mentioned

:02:27.:02:32.

today that the Greek press got hold of a document to the Prime Minister

:02:32.:02:36.

that they may face blackouts because they can't pay electricity

:02:36.:02:40.

bills. We find out in the next 24 hours how much money has fled

:02:40.:02:47.

Greece over the past week. We know if the -- in the past three months

:02:47.:02:53.

58 million has fled Europe over the past few months. Spain is in

:02:53.:02:55.

serious trouble and needs a bank bail out. There is the mechanism to

:02:55.:02:59.

do, that the European Union has the money to do that. Right now Spain

:02:59.:03:02.

doesn't want to take that money. It is saying, we don't want to be like

:03:02.:03:05.

Ireland, we don't want to be the slaves of Europe. This is, of

:03:05.:03:09.

course, on the eve, tomorrow, of the Irish referendum. Where the

:03:09.:03:14.

Irish are going to sign up for an austerity deal that the Spanish

:03:14.:03:18.

have just negotiated a one-year opt-out from, that is conyou fewed,

:03:18.:03:24.

so is everybody else -- if that is confusing, so is everybody else.

:03:24.:03:28.

Greece could leave the euro? Ever since the Brussels summit last week

:03:28.:03:33.

the feeling is, most people think, look, Merkel is talking tough to

:03:33.:03:39.

try to get Greek voters to go back to the centre. To recoil in horror

:03:39.:03:43.

from any exit from the eurozone, so they vote how the European Union

:03:43.:03:46.

would like them. Most people think, whether it is just before or just

:03:47.:03:51.

after the elections, the Germans will have to relent and say it is a

:03:51.:03:55.

bluff. And they will give the Greeks some extra time to pay, like

:03:55.:03:58.

Spain, another year to meet the targets. That is what the money is

:03:58.:04:02.

on at the moment. But, as we are about to see, the ability of

:04:02.:04:07.

politicians to effect economics, ever since Lehman Brothers, has

:04:07.:04:14.

been very limited. If Greece left the euro, the

:04:14.:04:19.

reaction would be frantic. Every Government, every Central Bank, and

:04:19.:04:24.

all financial markets would be faced with immediate choices.

:04:24.:04:28.

But the first 48 hours of a Greek exit would depend on precisely why

:04:28.:04:33.

the exit happened. Politically it is impossible to

:04:33.:04:36.

expel Greece from the eurozone, and none of the parties likely to win

:04:36.:04:41.

the election want to leave, including the left. So a Greek exit

:04:41.:04:47.

would be messy. Driven by economics, driven by capital flight, bank run,

:04:47.:04:52.

and the breakdown of cross-border payment mechanisms. If you lent

:04:52.:04:57.

money in euros to Greece, and your debt is redenominated into drachmas,

:04:57.:05:01.

which falls against the euros, you will get less money back. There is

:05:01.:05:04.

also a significant likelihood that banks would go under in Greece, a

:05:04.:05:08.

large number of companies would probably be bankrupt as well. So

:05:08.:05:12.

there would be more straight forward forms of default as well.

:05:12.:05:19.

With the far left riding high in the election. And the far right on

:05:20.:05:23.

the March, any financial collapse would -- march, any financial

:05:23.:05:26.

collapse would spell trouble. There is already trouble.

:05:26.:05:30.

We have got total polarisation, we have an economic programme the

:05:31.:05:34.

Greeks didn't vote for. We have violence in the streets. We have

:05:34.:05:40.

got Neo-Nazis in parliament. That is before any problems of euro

:05:40.:05:44.

exit? Yeah, absolutely. Before any problems of euro exit. The other

:05:44.:05:48.

thing people say, it is awful, but it is awful now.

:05:48.:05:52.

For London, as a financial centre, there would be deep concern. Not

:05:52.:05:56.

over Greece, but over the three trillion euros worth of foreign

:05:56.:06:02.

money sitting in Italy and Spain, which might leave.

:06:02.:06:06.

The very sense of crisis and uncertainty, is jittering the

:06:06.:06:10.

global markets, which is having an effect on our real economy. It is

:06:10.:06:15.

not through trade or diplomatic links, and they would be deeply

:06:15.:06:19.

concerned that the sense of instability would mean that any

:06:20.:06:25.

other institution that was not completely 100% robust, would sense

:06:25.:06:31.

the shockwaves and find themselves in a more perilous situation.

:06:31.:06:35.

British banks' exposure to Greece is small. Exposure to sovereign

:06:35.:06:44.

debt of Italy and Spain, is just over 10 million to Barclays, RBS

:06:44.:06:48.

and HSBC, but it would decrease the value of eurobonds across the

:06:48.:06:53.

eurozone. And here RBS, with 0 billion total exposure, is among

:06:53.:06:58.

the highest in Europe. In the first 48 hours after a Greek exit,

:06:58.:07:01.

everything would depend on preventing the financial collapse

:07:01.:07:05.

of Spain. The money to do that exist, right now Spain is quibbling

:07:05.:07:12.

over the terms of accepting it. As for Greece, it would face not

:07:12.:07:15.

only banking and monetary chaos, its exports would more or less

:07:15.:07:20.

double in cost, that is bad. There is a lot of fear. People are very,

:07:20.:07:23.

very worried about this. It feels like falling off the edge of a

:07:23.:07:28.

cliff to a lot of people. There is a lot of fear about poverty, about

:07:28.:07:32.

hunger, about political chaos. Greece imports 40% of the food at

:07:32.:07:37.

the moment. Almost all its medicines, all its oil. And as the

:07:37.:07:41.

Greeks left, the credibility of the euro as a permanent currency union

:07:41.:07:48.

would be shattered. Giorgos Papakonstantinou is in

:07:48.:07:53.

Athens, where he was until recently a Government minister,'s now a

:07:53.:07:57.

PASOK candidate in the forth coming elections, and taking an anxious

:07:57.:08:02.

interest in things there. Paul Krugman is a Nobel Prize-winning

:08:02.:08:08.

economist, who is betting on an exit from the euro zone. Do you

:08:08.:08:12.

think as a currency the euro is worth saving? I think it is a

:08:12.:08:17.

mistake, but it is a difficult thing to say it should never have

:08:17.:08:21.

been done and it is likely to collapse. I would like to save the

:08:21.:08:26.

euro. But I don't think Greece and the euro is a reasonable

:08:26.:08:28.

proposition. Giorgos Papakonstantinou, why is leaving

:08:28.:08:33.

the euro a bad idea from the Greek perspective? Well, first of all,

:08:33.:08:38.

can I take issue with your bad kebab analogy, which I find

:08:38.:08:41.

offensive. The Greek economy is in a crisis s the Greek people are

:08:41.:08:46.

going through a lot, they deserve some respect. I really didn't find

:08:46.:08:51.

that very appropriate. Coming to your question, leaving the euro

:08:51.:08:56.

would lead to reduction with a GDP falling by over 20%. It would

:08:56.:09:01.

double today's extremely high unemployment from 20% to over up to

:09:01.:09:06.

40%. It would lead to a halving of living standards, and to widespread

:09:06.:09:10.

poverty. Today's situation is very difficult and very bad, but leaving

:09:10.:09:15.

the euro would lead the economy back to the 50s and 60s, that is

:09:15.:09:20.

not something they would want to live through. I would support that,

:09:20.:09:23.

that was quite inappropriate to say the Greeks have done something

:09:23.:09:27.

terribly wrong, they made errors, but the trouble, the reason, it is

:09:27.:09:31.

going to be awful, if Greece exits. It will be awful in the short run.

:09:31.:09:34.

The trouble is the situation for Greece is hopeless, and I mean that

:09:34.:09:40.

in a quite literal sense. Under the euro, there is nothing on the

:09:40.:09:45.

horizon to suggest any recovery, ever. We are looking at extremely

:09:45.:09:48.

high unemployment, being shut out of the capital markets, as far as

:09:48.:09:52.

the eye can see. While an exit would be terrible, there would be,

:09:52.:09:56.

you can see how a recovery could happen afterwards. I understand

:09:56.:10:00.

that nobody wants to bite that bullet. Nobody wants to take that

:10:00.:10:04.

decision. Which is why I think it is actually that the decision will

:10:04.:10:10.

be take be out -- taken out of the hands of the politicians. If anyone

:10:10.:10:16.

can give me any story where Greece returns to prosperity or a halfway

:10:16.:10:19.

acceptable situation staying within the euro, I would be happy to

:10:19.:10:23.

reconsider, I haven't seen that story. Can you imagine such a story,

:10:23.:10:27.

Giorgos Papakonstantinou? I do, I deliver here with Paul, I think

:10:27.:10:30.

that clearly we need much more time than what the current programme

:10:30.:10:34.

gives us, to put the finances in order. But we are very close to

:10:34.:10:38.

running a primary surplus. The main problem is the economy isn't

:10:38.:10:41.

growing, and the economy isn't growing, it wasn't growing before

:10:41.:10:46.

the bail out. We were actually in recession since 2008. Before we

:10:46.:10:50.

started the austerity package. Clearly the austerity package has

:10:50.:10:54.

made things much worse. We need growth. Growth needs to come with

:10:54.:10:57.

the help of our European partners, through some kind of a growth

:10:57.:11:02.

package. With confidence returning and investment flowing back in. We

:11:02.:11:05.

have a privatisation programme, which should attract foreign

:11:05.:11:09.

investment. For all this to work you have to have a stablised

:11:09.:11:12.

situation, at the moment Europe is not giving the right signals. There

:11:12.:11:17.

has been some progress in improving the institutional architecture, but

:11:17.:11:22.

not enough. And the big moves have not been made yet. I'm hopeful that

:11:22.:11:26.

there is a wind of change in Europe at the moment, following also the

:11:27.:11:32.

French election, which will change the emphasis away from exclusively

:11:32.:11:38.

looking at austerity, and balancing it more with growth, and having the

:11:38.:11:42.

banks being able to bring the liquidity into the system. At the

:11:42.:11:46.

moment you have both the demand not being there, because wages and

:11:46.:11:52.

salaries have been cut, and a banking system not funking, which

:11:52.:12:00.

doesn't provide working cap -- functioning which doesn't provide

:12:00.:12:03.

working capital. How close are things to not working there?

:12:03.:12:07.

have had a fragmented result, from an election, and we have an

:12:07.:12:11.

election where the result is hanging in the air. The polls at

:12:11.:12:19.

the moment give the Conservatives and the left parties pretty much

:12:19.:12:26.

equal results. So it is touch and go, where this will go, it is clear

:12:26.:12:29.

the problems are too big for one party to shoulder this. We tried

:12:29.:12:34.

this for two years, we had an absolute majority in parliament and

:12:34.:12:40.

we failed. That is the point, my sense is, in fact, the coalition in

:12:40.:12:44.

Greece was doing all of the things it was asked to do. The trouble is

:12:44.:12:48.

that was not producing growth. That nothing plausibly on the horizon

:12:48.:12:54.

will produce growth. Even if the sternness of European austerity

:12:54.:12:59.

demanded is lessened a bit, that will not provide growth. Greece is

:12:59.:13:03.

highly uncompetitive in growth, the idea that you can close those

:13:03.:13:06.

structural reforms in any time frame is unreasonable. Some of us

:13:06.:13:11.

cut our teeth in way on the Argentine crisis more than a decade

:13:11.:13:16.

ago. It was, in some ways, easier, because they had their own currency.

:13:16.:13:20.

It was the same thing, there was no plausible route back to an

:13:20.:13:23.

acceptable economic situation, except via devaluation. I think

:13:23.:13:28.

that's going to be the case here. We just don't see how this can ever

:13:28.:13:33.

be reinvolved, otherwise. Remember, however, in the last two years, we

:13:33.:13:38.

clawed back the competition that was lost, in unit labour costs,

:13:38.:13:43.

since the starting of the eurozone. Greece has some existing advantages,

:13:43.:13:51.

like tourism and shipping, and some new ones like renewables, logistics.

:13:51.:13:55.

It does have the natural resources, the people, the ideas, to move

:13:55.:13:59.

forward. But it costs you power? keep the engine growing.

:14:00.:14:04.

eventually you lost power? We did. I actually take the same view, I

:14:04.:14:08.

think there is a lot of fundamental strengths, which are reasons why

:14:08.:14:14.

Greece, after an exit might recover much more quickly than people think.

:14:14.:14:17.

But the notion that the exports, essentially it will require exports,

:14:17.:14:21.

one way or another, the notion that the exports will come on stream,

:14:21.:14:27.

fast enough, with no, under the current regime, to avoid what is an

:14:27.:14:33.

on going catastrophy becoming unmanageable. I hope and would love

:14:33.:14:37.

to believe you are right. This is a horrible situation, it is a trap,

:14:37.:14:41.

and not the fault of the Greeks for the most part. But, my God, how

:14:41.:14:45.

much longer can this last, the action forcing the event will, of

:14:45.:14:50.

course, be people pulling money out of Greek banks. The ECB has to

:14:50.:14:54.

offer either unlimited credit, with no security, or pull the plug.

:14:54.:14:58.

Maybe they will do that, maybe they will string it on for another year.

:14:58.:15:04.

I find it hard to believe. You are geting any signs in Athens of

:15:04.:15:10.

concessions about to be made to you? I think it is clear that the

:15:10.:15:14.

troika is realising, also partly as a result of the election result,

:15:14.:15:19.

but partly also, looking at the fundamentals of the economy, that

:15:19.:15:23.

something has to give. If you ask any economist they will tell you

:15:23.:15:28.

that the fiscal path we have been following is extreme. We reduced

:15:28.:15:33.

the primary deficit by eight percentage points in two years.

:15:33.:15:36.

That has never been done before. To continue on this path, without

:15:36.:15:42.

giving it some slack, makes no sense. The more you hit on the

:15:42.:15:45.

fiscal side, the more difficult structural reforms become. Because

:15:45.:15:54.

the society is in such a difficult situation it is very hard to get

:15:54.:15:59.

acceptance around necessary reforms, but reforms always have people who

:15:59.:16:06.

oppose them. You do need, and the troika is ready to give, and the

:16:06.:16:11.

European partners, thinking of Germany, because it comes down to

:16:11.:16:15.

that, certainly some leeway of the base on the fiscal side. And

:16:15.:16:16.

hopefully on some other issues as well.

:16:17.:16:20.

Thank you very much. Only a fool would predict precisely how this

:16:20.:16:25.

crisis will end, but Greece is far from the end of the story. The

:16:25.:16:28.

interest the Spanish Government has to pay to borrow money reached

:16:28.:16:32.

record levels today, because so many people who ought to know,

:16:32.:16:37.

seriously doubt whether it has the wherewithal to keep the country's

:16:37.:16:42.

banks afloat. Spain, the fourth- biggest economy in the eurozone,

:16:42.:16:45.

threatens the entire edifice, it is not about individual countries but

:16:45.:16:52.

whether the euro itself can be rescued.

:16:52.:16:56.

Imagine this, it is six months on from the Greek exit, it has been

:16:56.:17:01.

orderly, negotiated, there has been no euro crash. But on the housing

:17:01.:17:07.

estates of peripheral Europe, things are very bleak.

:17:07.:17:12.

I think six months after a Greek exit we would still be in a period

:17:12.:17:15.

of economic and financial uncertainty and weakness. Our

:17:15.:17:19.

expectation is that the economy would contract, fairly sharply, we

:17:19.:17:23.

would expect the eurozone GDP to drop something like 5%, on a par

:17:23.:17:27.

what we saw during the global recession of a couple of years ago.

:17:27.:17:30.

If all that looks bleak, it is possibly the best you could hope

:17:30.:17:34.

for if Greece exits, because a disorderly exit could, six months

:17:34.:17:42.

down the line, pose severe threats to the entire europroject. The

:17:42.:17:46.

biggest systemic risk is Spain, its economy is shrinking now, its

:17:46.:17:51.

sovereign debt already verging on unmanageable, its banking sector

:17:51.:17:56.

sitting on a mountain of bad debt that nobody wants to calculate.

:17:56.:18:04.

think there is a serious chance that the eurozone could break up.

:18:04.:18:12.

There are adverse economic factors on going. There are crippling high

:18:12.:18:17.

levels of debt and problems, one has to fear the exit process of a

:18:17.:18:22.

country like Spain, would effectively sound the death knell

:18:22.:18:27.

for the euro all together. Until now Germany insistence on austerity

:18:27.:18:32.

for Greece has been seen as a giant bluff. But if it does drive Europe

:18:32.:18:36.

to ruination, even stalwarts of the political centre, now see that as

:18:36.:18:41.

changing the debate over austerity versus growth. It may be that the

:18:41.:18:43.

approach of the Washington consensus, and George Osborne and

:18:43.:18:47.

Cameron, is simply wrong, and that Greece is one of the first people,

:18:47.:18:51.

because they have absolutely nothing to lose. The first groups

:18:51.:18:55.

of people putting their head above and saying, no, we are not

:18:55.:19:04.

accepting this. I think it might be totemic, for how the whole

:19:04.:19:07.

austerity project is seen. Economists find it hard to model

:19:07.:19:10.

what is coming. At least they are thinking about it. The problem is,

:19:10.:19:14.

for the centrist politicians and civil servants who run Europe, they

:19:14.:19:17.

don't even want to think about it. When you look at what is happening

:19:17.:19:21.

in Greece, on the streets, you can see why. The old split between left

:19:21.:19:27.

and right is still there underneath. It still simers, there is still a

:19:27.:19:32.

sense of families and political history. Your grandfather killed my

:19:32.:19:36.

grandfather, that could come back? Your grandfather killed my

:19:36.:19:44.

grandfather, it is already coming back. The political goss are from a

:19:45.:19:52.

past Greece thought it had put behind it. If it fails there is no

:19:52.:20:02.

shortage of specters to haunt Europe. Paul Krugman is still with

:20:02.:20:07.

us, with a similar enlike peedic knowledge of euroaffairs, we have

:20:07.:20:12.

Kenneth Rogoff in Washington. What is the problem here, is it one of

:20:12.:20:22.

demand for debt? Well, I think that fundamental problems is a huge

:20:22.:20:26.

overhang of doubt you have to deal with. You can't deal with it

:20:26.:20:29.

watching the periphery countries of Europe being in recession for ten

:20:29.:20:33.

years. That is not going to happen. There has to come a plan to bring

:20:33.:20:38.

the debt down. Growth is a piece of it. They need to write down debt

:20:38.:20:43.

and need inflation. They need plan for restoring competitiveness in

:20:43.:20:46.

the periphery. If they are not going to have their own currency,

:20:46.:20:52.

then the euro needs to go down. way I think about Spain, is for ten

:20:52.:20:58.

years they were seen as the golden boy of Europe, now it is safe

:20:58.:21:03.

because it is part of the eurozone, money flooded in. A lot of it the

:21:03.:21:07.

Germany banks lending to Spanish banks, which fuelled a huge housing

:21:07.:21:12.

bubble. A lot of inflation, they get uncompetitive, the bubble

:21:12.:21:15.

bursts, how do they get back to being competitive again? The

:21:15.:21:19.

current strategy is that they should cut their wages, and some

:21:19.:21:23.

how do enough austerity to pay that debt. It is impossible. The demands

:21:23.:21:29.

being placed on Spain are impossible. If Greece exits, then

:21:29.:21:32.

everybody says it is impossible, money starts flooding out of Spain

:21:32.:21:37.

and Europe has a choice. And the choice is? The choice is, Ken and I

:21:37.:21:42.

seem to agree, that credit has to be made available, open-ended

:21:42.:21:48.

lending, so when people pull their euros out the banks don't collapse.

:21:48.:21:58.

An unlimited supply of euros from frack further. More debt? It is

:21:58.:22:01.

temporary, because if the panic stops the money comes back. You

:22:01.:22:05.

have to have inflation in Europe, instead of Spain having to cut its

:22:05.:22:10.

wages, at least it is not solely through cuts of Spanish wages, but

:22:10.:22:16.

we will have rising German wages, which is an easier way for Spain to

:22:16.:22:20.

become competitive. It is a change in the vision of Germany policy.

:22:20.:22:24.

Instead of punishing the debtors and having price stability, they

:22:24.:22:29.

have to have something more liberal, they have to have a party.

:22:29.:22:35.

Rogoff, inflation and more debt, is that a solution? No, I don't agree

:22:35.:22:42.

with the more debt. I certainly agree about writing down debt. I

:22:42.:22:45.

think inflation is a piece of the solution, all over the world. I

:22:45.:22:49.

don't think there is really way to go forward here without having some

:22:49.:22:52.

political union, or vision of political union. I don't think this

:22:52.:22:56.

is all about Germany being stingy. It is also about not wanting to

:22:56.:23:03.

have -- st, ing ey it is also about not wanting to have an open bar for

:23:03.:23:09.

the rest of Europe. I'm not saying what they are proposing is

:23:09.:23:12.

necessarily nearly the end of things. I really think the only way

:23:12.:23:16.

this is going to end is either Europe starts to look like a real

:23:16.:23:23.

country, and I mean France and Germany, part of the same country,

:23:23.:23:28.

central Government with a lot of taxing power, or it splits up.

:23:28.:23:33.

Unless they start moving that way enthusiastically soon, I don't

:23:33.:23:38.

think anything will stablise the situation. I hope's wrong about

:23:38.:23:44.

that, if he's right it will be over. I have done Ireland versus Nevada,

:23:44.:23:48.

not the landscape, but everything else looks remarkably similar.

:23:48.:23:54.

Because the way the US fiscal system exists, Nevada is receiving

:23:54.:23:59.

de facto aid on the scale of 5-6% of GDP, from Washington. Try to

:23:59.:24:02.

imagine that Europe, that Germany would be willing to countenance a

:24:02.:24:09.

system where 5-6% of GDP, not in loans, but actual aid, is given to

:24:09.:24:12.

southern European countries at the moment, that is not conceivable.

:24:12.:24:16.

That is a generation's work. We don't have a generation, we may not

:24:16.:24:22.

have more than a few months here. By that analysis, the euro has had

:24:22.:24:29.

it? Some doubt write downs, that some default, plus some inflation,

:24:29.:24:36.

might make it, might make it manage gt, over a five-year d manageable,

:24:36.:24:40.

over a five-year period to get an adjustment. That is not good, the

:24:40.:24:43.

solution that the United States of Europe is much to be desired.

:24:43.:24:46.

it won't happen during my working lifetime.

:24:47.:24:51.

Ken Rogoff, you tried to get in? think that will be a problem. I

:24:51.:24:56.

think they need to lay out a vision, it could be 15-20 years, right now

:24:56.:25:00.

it is a moving 40-50 years. But they need to lay out a vision where

:25:00.:25:05.

it is going forward, not backward. I think the French election was in

:25:05.:25:09.

some sense a rejection of moving to a closer Europe, a rejection of

:25:09.:25:15.

having more interdependance. I certainly see that Germany, one way

:25:15.:25:19.

or another, is not going to get paid. Either because there is going

:25:19.:25:24.

to be default, inflation or it will make transfers t has to pick its

:25:24.:25:28.

poison. I'm very sympathetic to their wanting rules, at least

:25:28.:25:32.

trying to negotiate. That said, they may find themselves blinking

:25:33.:25:36.

again and again, simply because they are being gamed into making

:25:37.:25:41.

the big payments and transfers, because it is so catastrophic what

:25:41.:25:45.

will happen if they don't. What should western Governments be doing

:25:45.:25:55.
:25:55.:25:58.

now? They have to stop the panic here. That is the number one

:25:58.:26:02.

problem. I think over the longer term there is a huge overhang of

:26:02.:26:07.

debt, public, private, external debt, that gradually needs to be

:26:07.:26:13.

deflated out of the of the system. Some through growth, there are very

:26:13.:26:17.

few historical experiences where that has been very successful.

:26:17.:26:20.

Except in cases like Canada and Sweden, where the Governments were

:26:20.:26:23.

very large, and they were able to shrink them and make the economies

:26:23.:26:31.

much more efficient. I look at the European situation, as something

:26:31.:26:34.

impossible will happen. One that the euro will be allowed to

:26:34.:26:37.

collapse, that is unthinkable, impossible. The other is the

:26:37.:26:41.

Germans will accept lots of debt relief, plus inflation, plus

:26:41.:26:45.

temporarily large open-ended lending, which is impossible. One

:26:45.:26:49.

of those two impossible things will happen. It is an awesome choice. It

:26:49.:26:53.

is not something, they will not have years to dither over this,

:26:53.:26:57.

they have months to dither over this. It is moving very fast.

:26:57.:27:01.

Rather surprisingly a survey out tomorrow, of how confident British

:27:01.:27:04.

consumers feel, will show their slightly less gloomy than they were.

:27:04.:27:07.

But the facts about the state of the economy in this country, even

:27:07.:27:10.

without the collapse of the eurozone, are awful. The

:27:10.:27:16.

Chancellor's sticking to his line that there is no alternative to his

:27:16.:27:22.

austerity prescription. Not for him, the great economist, John Maynard

:27:22.:27:26.

Keynes, said when the facts change I change my mind, what do you do.

:27:26.:27:36.
:27:36.:27:37.

First let's have this. "To understand my state of mind",

:27:37.:27:42.

John Maynard Keynes wrote to his friend, George Bernard show, he

:27:42.:27:47.

said he would be writing a book on economic theory, that would largely

:27:47.:27:51.

revolutionise, not at once, but in the course of next ten years, the

:27:51.:27:54.

way the world thinks about economic problems. It was a bit of a brag,

:27:54.:28:00.

even to a friend, but as it turns out, even he was underplaying it.

:28:00.:28:05.

Keynes ideas are still in play, nearly 70 years later. In the

:28:05.:28:09.

summer of 2010, the Chancellor, George Osborne put in place his own

:28:10.:28:13.

theory. Massive spending cuts, driven by a need to placate the

:28:13.:28:18.

international bond markets. This Emergency Budget deals decisively

:28:18.:28:23.

with our country's record debts. It pays for the past and plans for the

:28:23.:28:29.

future. His opposite number, retaliated. With a modern day case

:28:29.:28:35.

for Keynesian spending. coalition should act quickly and

:28:35.:28:40.

decisively to reverse George Osborne's cuts and for household

:28:40.:28:45.

budgets this year. We should reinstate vital investment for jobs

:28:45.:28:51.

now. Here on the corner of John Maynard Keynes's street, is a

:28:51.:28:56.

building site that exsemplifies his ideas of yesterday, he believes if

:28:57.:29:00.

the economy isn't involved in the private sector, the Government has

:29:00.:29:03.

no choice, the Government has to intervene. He said, tongue in cheek,

:29:03.:29:10.

what you should do, is take bottles, and fill them with pound coins, and

:29:10.:29:14.

put them at the bottom of the large well and put it down there. The

:29:14.:29:19.

employment of getting the bags out would stimulate the economy. That

:29:19.:29:24.

is where critics of the Government say we are now. On the one hand you

:29:24.:29:28.

have �700 billion of public sector private assets that they don't want

:29:28.:29:32.

to spend. And there is historic low rates of borrowing that the

:29:32.:29:35.

Government enjoys and could be better used to stimulate the

:29:36.:29:42.

economy. That is what they think should be done and they are still

:29:42.:29:45.

Keynesian followers. The Government could actually restore some of its

:29:45.:29:47.

capital programmes that have been cut. For example, the school

:29:47.:29:51.

building programme has been cut by 80%. I think much of those cuts

:29:51.:29:57.

should be reversed. There are other programmes which would be better to

:29:57.:30:00.

be done by a national investment bank. Because that would get a lot

:30:00.:30:02.

of the spending off the Government's balance sheet, if

:30:03.:30:08.

people are worried that the Government is being profligate.

:30:08.:30:12.

Critics of neo-Keynesian sound warnings. They point out our

:30:13.:30:20.

economy has generous automatic fiscal monitor, spending rising.

:30:20.:30:23.

They say the Government is borrowing a fair amount, not much

:30:23.:30:26.

less than a Labour Government would have done. The Government is

:30:26.:30:32.

spending close to 50% of GDP, their plan is to get down to to 40% over

:30:33.:30:37.

the next couple of years. If they want to provide confidence in the

:30:37.:30:42.

economy, what they need to be doing is getting close to 30%. That would

:30:42.:30:45.

also allow tax cuts, that would encourage private investment.

:30:46.:30:49.

are many reasons why the Government doesn't think the time is right for

:30:49.:30:52.

apartheid of pronounced Keynesian spending. But there are two that

:30:52.:30:56.

stand out. The first one, according to the ideas of the man himself,

:30:56.:31:00.

you don't run a deficit during a time of economic boom. The current

:31:00.:31:03.

Government believe that is exactly what the previous Government did,

:31:03.:31:09.

and they are now dealing with the effects of it. There is also

:31:09.:31:12.

unfunded pension liabilities, that this Government is also trying to

:31:12.:31:16.

deal with. They believed Keynes didn't have them at the time of his

:31:16.:31:19.

writing, and you can't keep kicking a debt can down the road.

:31:19.:31:24.

Nonetheless, the Government is due to launch new programmes of

:31:24.:31:28.

infrastructure investment soon. The debate is shifting towards a

:31:28.:31:32.

different Keynesian insight, that monetary policy could do more heavy

:31:32.:31:42.
:31:42.:31:43.

lifting. The Bank of England should set nominal GDP rates, musing from

:31:43.:31:46.

the builders until then, they wonder where he buried the pound

:31:46.:31:52.

coins. Paul Krugman is here, Jon Moulton

:31:53.:31:56.

joins him, and Andrea Leadsom, a Conservative MP, who previously

:31:56.:32:01.

worked in finance for 20 years. You have given George Osborne quite

:32:01.:32:05.

a lot of ear ache about his handle of the economy. Have you seen

:32:05.:32:08.

anything while you have been over - - handling of the economy, have you

:32:08.:32:11.

seen anything while you have been over here to change your view?

:32:11.:32:15.

have had two years of austerity here and elsewhere. What we have

:32:15.:32:18.

seen, first of all, is austerity really does contract the economy.

:32:18.:32:22.

That the notion that it would inspire business confidence, and

:32:22.:32:29.

lead to expansion, not contraction, has been decisively proved wrong

:32:29.:32:34.

here and across the continent. Secondly, there is growing evidence

:32:34.:32:38.

that austerity, in these conditions, doesn't even work in fiscal terms.

:32:38.:32:42.

Because it shrinks the economy now and also shrinks the economy in

:32:42.:32:47.

future. It hurts the economy's long-run potential, which reduces

:32:47.:32:51.

future revenues, which worsens the long run budget position. I have

:32:51.:32:55.

used the analogy, it is like medieval doctors that thought you

:32:55.:32:59.

could treat a sick patient by bleeding, the patient got sicker

:32:59.:33:02.

and they said, bleed more. That is what is happening. You have a debt

:33:02.:33:08.

problem that is real, and the treatment is making things worse,

:33:08.:33:13.

even in fiscal terms. Why are you shaking your head, this is a Nobel

:33:13.:33:18.

Prize-winning economist? I find his view reckless, frankly, I can't

:33:18.:33:21.

believe that somebody as incredibly highly regarded could honestly

:33:21.:33:26.

think that the answer is to go and borrow more money. It is very

:33:27.:33:30.

simple mathematics, if you are in a hole, if you have overspent and

:33:30.:33:35.

overspent, spending more is simply not going to help. It will make

:33:35.:33:40.

things worse. You talk about austerity, in reality this is

:33:40.:33:44.

austerity light. If you really wanted to sort the economy, they

:33:44.:33:49.

would be doing it far faster with a shorter, sharper hit to get us

:33:49.:33:54.

rebounding sooner than we can. There are a lot of ways to answer

:33:54.:33:57.

that. The main thing to say, if you try to have a situation that

:33:57.:34:00.

everyone is trying to slash at the same time, which the private sector

:34:00.:34:04.

is trying to slash spending cuts, it feels it has too much debt, and

:34:04.:34:08.

the Government is also saying we have too much debt, we are all

:34:08.:34:11.

trying to slash. Then we run up against the fundamental fact that

:34:11.:34:15.

we are not a household, but an economy. And your spending is my

:34:15.:34:19.

income, and my spending is my income. And if we are both doing

:34:19.:34:23.

the slashing at the same time, what we end up doing is producing a

:34:23.:34:30.

depression that leaves us worse off. This is another thing, 1930s

:34:30.:34:39.

American economist, Irvine Fisher, Keynes plentor, he said if

:34:39.:34:43.

everybody tries to pay down debt, the more people save and the more

:34:43.:34:48.

they owe. We are worsening the debt problem by not allowing the

:34:48.:34:57.

Government to be the stablising factor. Even I struggle to attack a

:34:57.:35:02.

Nobel Prize winner, but I think you are seriously wrong. The issue

:35:02.:35:06.

about austerity is we have too large a state. We have let the

:35:06.:35:11.

economy go from 30 % odd, to pushing 50%, public sector. If you

:35:11.:35:16.

want growth you need a larger private sector, not a larger public

:35:16.:35:20.

sector. You are also ignoring, as your book does, I have just been

:35:20.:35:24.

reading it, waiting to come on, the very simple moral dimension of what

:35:24.:35:29.

you are recommending. That is we run up more debt. The only thing

:35:29.:35:33.

that debt does, it enables us to live better today, at the expense

:35:33.:35:38.

of those who follow us. That is a serious moral argument, and you

:35:38.:35:43.

cannot ignore it. I would put the moral argument in a different way,

:35:43.:35:47.

if I think about the future generation, the crime we are

:35:47.:35:49.

committing against the next generation, is not that we will

:35:49.:35:55.

leave them with more debt. That is a venal sin, the crime is all the

:35:55.:35:59.

students are graduating from college with no job prospects.

:35:59.:36:03.

Graduating with debts they have incurred to get an expensive

:36:03.:36:05.

education, and then there is no jobs. The damage we are inflicting

:36:05.:36:09.

on the next generation, by not having jobs for them. Which is the

:36:09.:36:14.

result of misguided austerity right now. That is the great sin. Those

:36:14.:36:18.

jobs will be generated when people move from the public sector to the

:36:18.:36:22.

private sector. What we need to be doing, is really making it easier

:36:22.:36:27.

for young people to start their own businesses, making it far easier

:36:27.:36:32.

for new entrepeneurs, you say we have to create jobs. We shouldn't

:36:32.:36:36.

be about creating jobs, but about enabling the economy to create jobs,

:36:36.:36:39.

low tax regimes, and opportunities for people to start up new

:36:39.:36:43.

businesses and so on. The average young person is not going to start

:36:44.:36:47.

a business. Why not? There has to be an expanding economy which is

:36:47.:36:50.

not happening, it is not happening because we are not providing the

:36:50.:36:54.

necessary support. By the way, I think you have just given me

:36:54.:36:57.

confirmation that something people like me tend to say. Actually none

:36:57.:37:01.

of this is at all about fiscal responsibility. It is about

:37:01.:37:05.

exploiting the current situation to pursue an ideolgical goal of a

:37:05.:37:08.

smaller state. You know, we can argue about whether the British

:37:08.:37:13.

state is too large, but look at Sweden. Which is weathering it very

:37:13.:37:17.

well, with a much larger state than you have. That is a great diversion,

:37:17.:37:21.

that is suggesting it is not sincere, it is not the budget

:37:21.:37:24.

deficit that is concern you, you are looking for a way to exploit

:37:24.:37:32.

the deficit situation. You accuse - - we accuse you of being wrong, and

:37:32.:37:37.

you accuse us of lying. You are mingling concepts that are separate.

:37:37.:37:40.

There is clear economic evidence, and you must accept as evidence,

:37:40.:37:45.

not they are hey, that, on average, larger public sectors grow slower

:37:45.:37:51.

than smaller ones. I don't accept that at all, we could have that

:37:51.:37:54.

discussion but we need equation charts for that. That is not true.

:37:54.:38:01.

So Mr Alfonso's study is rubbish. The question of size of the state,

:38:01.:38:05.

and the question of what one should be doing right now it deal with

:38:05.:38:08.

this crisis, ought to be separate. Surely there has to be a point that

:38:09.:38:13.

you can either expand your private sector, by making it easier for the

:38:13.:38:16.

private sector to expand. Or you can expand your public sec to and

:38:16.:38:20.

the only way to do that, is by removing wealth from the private

:38:20.:38:26.

sector, to put into the public sector. You are missing a point of

:38:26.:38:30.

what it means to be in a depression. We are not going into a depression.

:38:30.:38:33.

We are in a depression, there are vast numbers of workers idle who

:38:33.:38:37.

want to work. There is vast amounts of capital going nowhere, because

:38:37.:38:41.

there is no demand. At this point of time, the private and public

:38:41.:38:44.

sector are not competing for resources, there are unemployed

:38:44.:38:48.

resources, the point is to put them to work. Give me a recovery, in the

:38:48.:38:57.

UK or US, and I will become a fiscal, be happy to find ways to

:38:57.:39:00.

discuss about Government spending and raising revenue, in the US that

:39:00.:39:05.

needs to be part of the solution. Not now, not under these conditions.

:39:05.:39:09.

Don't you think efforts to reduce corporation tax, to deregulate, to

:39:09.:39:15.

make it ease your to start new companies, to -- easier to start

:39:15.:39:20.

new companies, and make it easier for banks to lend. To improve the

:39:20.:39:23.

private sector of the economy, that will have more impact than

:39:23.:39:27.

borrowing more money to create jobs and throw money at things. We have

:39:27.:39:31.

survey evidence in the United States about what it is that is

:39:31.:39:34.

holding private businesses back. Overwhelmingably the answer is lack

:39:34.:39:38.

of sales. There is not enough demand. Constraints on capital is

:39:38.:39:43.

not an issue. They would like to have more skilled workers, no more

:39:43.:39:47.

so than usual. Issues about financing are small issues,

:39:47.:39:51.

concerns about future Government regulation, they always complain

:39:51.:39:54.

about that, no more than usual. What has changed is there is no

:39:54.:40:00.

demand, there is no market there. That is what the austerity policies

:40:00.:40:04.

are worse, they are inhibiting the private sector as well as the

:40:04.:40:11.

public. Not all of the policies have failed. Every success story

:40:11.:40:14.

includes either high interest rates to start with, so you could bring

:40:14.:40:18.

them down. Or a situation where you have a large currency devaluation,

:40:18.:40:23.

that won't work now, you have to have some prosperous economy to

:40:23.:40:26.

devalue against, there is nobody out there now. There is, a clear

:40:26.:40:30.

example, Estonia. It doesn't fit the story at all. I don't think we

:40:30.:40:33.

have the evidence on the Estonia example, and we haven't time to go

:40:33.:40:36.

into it. I would love to. Come back and tell

:40:36.:40:40.

us all about it. The people of Ireland get to vote

:40:40.:40:43.

tomorrow on whether to swallow the medicine prescribed by Europe, it

:40:43.:40:46.

is a quirk of the institution constitution that it requires a

:40:46.:40:49.

referendum for the country to decide whether to accept a treaty

:40:49.:40:53.

that most of the rest of the eurozone has already agreed to. The

:40:53.:40:57.

Irish have a habit of rejecting EU treaties in referendums, and then

:40:57.:41:00.

accepting them when they are told to come up with the right

:41:00.:41:09.

conclusion. It was a Drome house, which turned into a nightmare

:41:09.:41:14.

mansion. Vacant and abandoned, after its owners' fortunes went the

:41:14.:41:20.

same way as the once booming island. Julia still work, but can't afford

:41:20.:41:25.

the mortgage any more, she survives by selling her furniture, and votes

:41:25.:41:28.

no in the referendum. This country is in a mess, because of the lack

:41:28.:41:31.

of regulation and the banks throwing money at people. Nobody is

:41:31.:41:35.

taking responsibility at the top, people like myself I lose my entire

:41:35.:41:38.

life earnings, and people in more dire situations, who are struggling

:41:38.:41:42.

to put food on the table. They are paying the penalty, the people at

:41:42.:41:46.

the top are being protected. That is wrong. Many of Ireland's middle-

:41:46.:41:50.

classes feel the same way, most of those voting no come from the less

:41:50.:41:54.

well off strands of society. People have seen their standards of living

:41:54.:41:59.

squeezed. And Sinn Fein, with less than 10% of the seats in Irish

:41:59.:42:04.

parliament, have stopped into that anger by urging a no vote.

:42:04.:42:09.

biggest thing the no vote would do, is to send clearly a signal to our

:42:09.:42:12.

own Government, but then to our European partner, that it is the

:42:12.:42:17.

considered view of the Irish people that austerity has failed. It is

:42:17.:42:20.

therefore the responsibility of democratically elected Governments

:42:20.:42:26.

and politicians, to come up with the Plan B. The yes side is

:42:26.:42:29.

represented by the vast majority of political parties in Ireland, they

:42:29.:42:33.

are warning voters if the Fiscal Compact is reject, Ireland might

:42:33.:42:38.

not be able to get a second bail out in 2014, if one was required.

:42:39.:42:42.

It is a tough sell, in any circumstance, where you have high

:42:42.:42:47.

levels of unemployment, and people are hurting. Aren't they voting yes,

:42:47.:42:49.

because they are afraid, rather than because this is the right

:42:49.:42:53.

thing, the right forward path? think they are voting yes because

:42:53.:42:56.

they want an insurance policy of funding there, if we cannot get

:42:56.:43:00.

back to the markets. They are voting yes because they want proper

:43:00.:43:04.

fiscal discipline, they don't want to go through the boom to bust

:43:04.:43:07.

nonsense we have seen over the course of the last number of years.

:43:07.:43:12.

They want certainty with this treaty. This treaty provides that.

:43:12.:43:16.

Dublin's Docklands symbolises the boom and bust that was the Celtic

:43:16.:43:20.

Tiger era. The bridges, banks, hotels that shot up in the last few

:43:20.:43:24.

years, showed aspiration and growth, it all ended badly, symbolised in

:43:24.:43:29.

the building over my shoulder, which would have been Anglo-Irish

:43:29.:43:34.

bank's head quarter, before it collapsed and taking with it --

:43:34.:43:38.

headquarters, before it collapsed and took the economy with it.

:43:38.:43:44.

House buying is non-existent, but the Irish export system is booming,

:43:44.:43:49.

with niches in pharmaceuticals and technology. This man runs one of

:43:49.:43:55.

the biggest exporters in Ireland. If we can manage our way through

:43:55.:44:00.

the next two years, combine that with certainty coming out of Europe,

:44:00.:44:04.

which will trigger economic growth and economic activity. Then I think

:44:05.:44:09.

you will see a very different Ireland. And that is why we have to

:44:09.:44:14.

vote yes tomorrow. We're not voting for tomorrow, we are voting for the

:44:14.:44:18.

Ireland of two years from now. We're voting for the Ireland of 40

:44:18.:44:22.

years, for our grandchildren. But Ireland's young people may not

:44:22.:44:27.

be able to wait a few years, they are already emigrating at a rate of

:44:27.:44:30.

1,000 a week, not all have lost their sense of humour. You find it

:44:30.:44:35.

interesting, you guys have seen the protests and the indignation in

:44:35.:44:38.

Spain, the people of Greece taking to the streets and burning down

:44:39.:44:43.

Athens. Part of you thinks, why doesn't it happen in Ireland, and

:44:43.:44:48.

you think, we just don't have the weather for it. I'm not paying any

:44:48.:44:51.

debt, people say that is irresponsible, what would happen if

:44:51.:44:55.

everybody stopped paying their debt? We would be debt-free.

:44:55.:44:58.

I decided to do my own little stand-up, afterall, how difficult

:44:58.:45:02.

with it be? The reason we are here is because we are looking at the

:45:02.:45:07.

treaty. And I was hoping to canvas your views, because unlike so many

:45:07.:45:14.

of your peers, you haven't emigrated, yet. So all of you, how

:45:14.:45:20.

many are "don't know", you will vote in the next 48 hours and you

:45:20.:45:26.

still don't know. Can I ask someone why you don't no. Did you raise

:45:26.:45:31.

your hand? Who raised their hand and said they did know. Why don't

:45:31.:45:37.

you know? No pressure? I haven't really looked into it. Despite the

:45:37.:45:41.

gallows humour, and the high number of undecided vote erts, even at

:45:41.:45:46.

this late stage, both sides of the debate agree that Ireland faces a

:45:46.:45:49.

few more years of austerity, irrespective of the outcome.

:45:49.:45:53.

Allegra Stratton is back with us to tell us what has happened with the

:45:53.:45:56.

Prime Minister's former head of propaganda, Andy Coulson. What was

:45:56.:46:04.

his former title? Head of Communications. He has been

:46:04.:46:09.

arrested? Before we went on air, he was charged and arrested. He was

:46:09.:46:14.

detained at 6frplt30am in his home in south London in Dulwich, they

:46:14.:46:19.

drove him, not train nor plane, they drove him to Glasgow, arrived

:46:19.:46:24.

at 3.30, six hours of questioning, then announced they were charging

:46:24.:46:27.

and arresting. It is down to the Scottish authorities to figure out

:46:27.:46:32.

what they will do next. offences? Related to his appearance

:46:32.:46:38.

at a Tommy Sheridan trial. charge? Perjury. That is serious?

:46:38.:46:42.

Taken very seriously up there, more so. The problem for the Prime

:46:42.:46:48.

Minister is twofold, firstly, it is something he is alleged to have

:46:48.:46:52.

committed while working for the Prime Minister. A different

:46:52.:46:57.

category of things he is accused of. It reminds us ahead of the Jubilee

:46:57.:47:00.

weekend, that no matter how hard the Government tries to disentangle

:47:00.:47:03.

itself from News International, every time they try they get

:47:03.:47:07.

dragged back by forces beyond their control. Thank you very much. It is

:47:08.:47:11.

on most of tomorrow morning's front pages, of course, if I knew I had

:47:11.:47:15.

time to show you I would. I don't have time to show you, that is the

:47:15.:47:20.

Guardian there. He's on most of the others as well. That's all for

:47:20.:47:23.

tonight, James Bond is here tomorrow, but until then, good

:47:23.:47:33.
:47:33.:47:33.

tomorrow, but until then, good night.

:47:33.:47:37.

The heavy, thundery showers in eastern England is clearing away,

:47:37.:47:42.

only to be replaced by cloud and rain tomorrow, across the northern

:47:42.:47:45.

half of the UK. To the south it will be dryer and brighter, that is

:47:45.:47:48.

where we have the last of the warmth. The rain sets in for

:47:48.:47:51.

northern England, it will be a cool day here. A bit of raib from time

:47:51.:47:56.

to time in the Midlands, after a bright start East Anglia could see

:47:56.:48:02.

rain late in the day. Southern most parts of England, dry and bright,

:48:02.:48:05.

sunshine from time to time, here we have the last of the warmth.

:48:05.:48:09.

Temperatures 18-19, not as warm as today. South Wales doesn't look too

:48:10.:48:15.

bad, mid-and North Wales will see some rain at times, in the hills

:48:15.:48:19.

and mountains. In Northern Ireland a poor day, rain all day, some of

:48:19.:48:24.

which heavy. The rain in Scotland gets as far north as Inverness and

:48:24.:48:28.

Aberdeen. It will be heaviest late morning, early afternoon, the rain

:48:28.:48:32.

becomes lighter during the latter part of the day. A pretty poor day

:48:32.:48:36.

across many northern parts of the UK. It should be dryer and brighter

:48:36.:48:40.

for most areas on Friday. As you head further south, there is a lot

:48:40.:48:44.

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