Browse content similar to 08/06/2012. Check below for episodes and series from the same categories and more!
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Tonight, Spain is reported to be on the verge of formally seeking a | :00:14. | :00:17. | |
multibillion euro bail out. The details are muark year, but the | :00:17. | :00:22. | |
consequences are grave. Will it be enough to end the problems in the | :00:22. | :00:26. | |
eurozone's fourth-biggest economy, where does it leave the EU, and is | :00:26. | :00:31. | |
it just a start of a new phase of the mess. We will hear live from | :00:31. | :00:35. | |
Madrid and Athens. While the US and UN try to figure out way forward | :00:35. | :00:41. | |
for Syria, a BBC correspondent travels to the scene of the latest | :00:41. | :00:43. | |
massacre. I have seen appalling things, there are bits of people's | :00:43. | :00:47. | |
brain lying on the floor. In the corner there is a mass of congealed | :00:47. | :00:51. | |
blood. The from the world economy, to war and peace, we will ask if | :00:51. | :00:56. | |
the failure of leadership lies with our institutions, our economic | :00:56. | :01:06. | |
model, or maybe even our ideas of democracy. | :01:06. | :01:09. | |
Good evening, the eurozone's fourth-biggest economy stands on | :01:09. | :01:12. | |
the brink tonight of asking for bail out of its banks. It was | :01:12. | :01:17. | |
reported today on a conference call of eurozone finance ministers, | :01:17. | :01:20. | |
tomorrow Spain will formally ask for financial help. The problems | :01:20. | :01:24. | |
for the Spanish banks and Government are profound, and could | :01:24. | :01:27. | |
lead to problems for the whole world. We will hear the view from | :01:27. | :01:31. | |
Madrid and Athens in a empt mo, and consider whether the failures of -- | :01:31. | :01:37. | |
in a moment, and consider whether the failures are a wider problem of | :01:37. | :01:40. | |
financial institutions. What is going on, it is counter | :01:40. | :01:46. | |
rumour and rumour today? It is more than rumour. The Reuters news | :01:46. | :01:51. | |
agency at noon reported, this is a quadrupled-sourced report, a | :01:51. | :01:56. | |
Spanish request for an aid package, the announcement expected Saturday | :01:56. | :02:00. | |
afternoon, the Government of Spain has realised the serious of the | :02:00. | :02:04. | |
problem it is said by a senior German official. This is followed | :02:04. | :02:07. | |
by denials by Spanish ministers, they don't need a bail out and they | :02:07. | :02:11. | |
are not asking for one. More or less the whole of the pro- | :02:11. | :02:14. | |
Government Spanish press accuseded the news agency of spreading false | :02:14. | :02:21. | |
information. But I think my best guess is come 1.30 tomorrow | :02:21. | :02:24. | |
afternoon there will be a conference call and Spain will ask | :02:24. | :02:30. | |
for a bail out. The size of it we don't know, we know the IMF will | :02:30. | :02:36. | |
publish a report on Monday that they need at least 40 billion. That | :02:37. | :02:40. | |
is probably a severe under estimation. What will be | :02:40. | :02:46. | |
significant for the rest of us in this bail out? It is about how much | :02:46. | :02:50. | |
Germany it prepared to move. Most people in the international | :02:50. | :02:55. | |
community believe Germany is about to move, make concessions, not just | :02:55. | :02:58. | |
to Spain, but ultimately in the next nine days, to Greece as well. | :02:58. | :03:04. | |
But the form it takes has to looks a minor and meagre as possible. It | :03:04. | :03:08. | |
is about what conditions German tax-payers' money moves to the | :03:08. | :03:12. | |
south to underpin the rescue of these southern economies, as I have | :03:12. | :03:22. | |
:03:22. | :03:29. | ||
# Down down # Deeper and down | :03:29. | :03:36. | |
With Spain's economy plummeting confidence collapsing, what they | :03:36. | :03:40. | |
are waiting for in Brussels is a request, in Washington they are | :03:40. | :03:43. | |
getting tired of waiting. These decisions are fundamentally in the | :03:43. | :03:46. | |
hands of Europe's leaders, fortunately they understand the | :03:46. | :03:51. | |
seriousness of the situation, and the urgent need to act. | :03:51. | :03:57. | |
Here is why it is urgent, the ratings agency, FITCH, just slashed | :03:57. | :04:03. | |
Spain's credit rating, citing policy mistakes at European level, | :04:03. | :04:09. | |
predicting it will take up to 100 million euros to save them, pushing | :04:09. | :04:14. | |
the country's debt to 90% of GDP, and they don't just need a bank | :04:14. | :04:20. | |
bail out. For the banks alone we are looking to 250 billion euros, | :04:20. | :04:26. | |
that is quadruple what the IMF is saying. On top of that you need to | :04:26. | :04:32. | |
plug the gap on the public and external debt positions, that will | :04:32. | :04:37. | |
be a few hundred billion more euros. The money exists to bail out Spain, | :04:37. | :04:42. | |
but up to now, to get that kind of money, you have to cut spending, | :04:42. | :04:49. | |
raise taxes, and Spain is already looking fra,, and -- fractious, and | :04:49. | :04:57. | |
while Europe is haggling over, that the there is fears of a pan | :04:57. | :05:01. | |
Mediterranean Northern Rock. People are worried their country is | :05:01. | :05:04. | |
leaving the eurozone and their savings will be devalued away. The | :05:04. | :05:08. | |
only way poor countries could stand behind a bank guarantee and say | :05:08. | :05:13. | |
your deposits are worth the same in the new currency as in euros, is | :05:13. | :05:17. | |
you have a Central Bank willing to print unlimited funding. | :05:17. | :05:21. | |
temperature is rising because of the upcoming Greek election, a left | :05:21. | :05:26. | |
victory there could spark a eurok sit crisis. | :05:26. | :05:31. | |
-- exit crisis. That has put Germany's Angela Merkel under | :05:31. | :05:35. | |
intense private pressure to lay off southern Europe to relent on the | :05:35. | :05:39. | |
austerity conditions. Today, President Obama, dispensed with | :05:39. | :05:48. | |
private diplomacy. If you are engaging in too much austerity too | :05:48. | :05:53. | |
quickly and that unemployment rate goes up to 20-25%, then that | :05:54. | :05:58. | |
actually makes it harder to then pay off your debts. And the markets, | :05:58. | :06:05. | |
by the way, respond in this when they see the downward spiral | :06:05. | :06:08. | |
happening, they are making a calculation, if you are not growing | :06:08. | :06:11. | |
at all, if you are contracting, you may end up having more trouble to | :06:11. | :06:17. | |
pay us off, we will charge you even more. All permanent solutions | :06:17. | :06:23. | |
involve German tax-payers putting their euros, either at risk, or | :06:23. | :06:28. | |
effectively on a conveyor-belt to southern European Governments in | :06:28. | :06:32. | |
large amounts. They are saying, you are asking us to put our own | :06:32. | :06:36. | |
solvency on the line, to underwrite southern Europeans who we don't | :06:36. | :06:41. | |
completely trust, and with good reason. We have seen how they have | :06:41. | :06:47. | |
backsliden on various agreements. The German response is not, no | :06:47. | :06:52. | |
never, it is, we will do it if, in response, we get a political union | :06:52. | :06:55. | |
in Europe, in which we are guaranteeed that say the Spanish | :06:55. | :06:58. | |
and Greeks, there is a central control over how they spend. It is | :06:58. | :07:02. | |
logical for the Germans to hold out for a long-term solution. But the | :07:02. | :07:08. | |
longer they do, the greater the chances are that Europe hits some | :07:08. | :07:12. | |
short-term systemic crisis. For a crisis like that you need a | :07:12. | :07:16. | |
Government, a Central Bank, and a tight group of politicians, who can | :07:16. | :07:20. | |
make the rules up as they go along. All of which Europe just doesn't | :07:20. | :07:23. | |
have. And those who get to hear the inner | :07:23. | :07:27. | |
most fears of global leaders know the danger is rising. | :07:27. | :07:33. | |
I heard a senior American make exactly that point just over the | :07:33. | :07:37. | |
weekend. There was an American policy maker who said he speaks to | :07:37. | :07:41. | |
the Germans all the time, and they say that they understand it looks | :07:41. | :07:45. | |
like too little too late, but they will do just enough to avoid | :07:45. | :07:49. | |
catastrophe. The American response was, that is how you get a | :07:49. | :07:59. | |
:07:59. | :08:02. | ||
catastrophy. This new phase of crisis denial, | :08:02. | :08:10. | |
and microfoam diplomacy finally pushes Europe to a solution, we | :08:10. | :08:16. | |
can't go on with the status quo. In Madrid we have Schwartz swart | :08:16. | :08:21. | |
Schwartz, a free market economist and former -- Pedro Schwartz, a | :08:21. | :08:26. | |
free market economist, and joined by our guest in Athens. Professor | :08:26. | :08:32. | |
Schwartz, how do you think any bail out to Spain might work? Well, the | :08:32. | :08:37. | |
intention is to bail out some of the banks, those that were savings | :08:37. | :08:41. | |
banks, some of them should have been shut down totally. But they | :08:41. | :08:47. | |
are being kept alive, and so, those banks need money. The IMF has | :08:47. | :08:54. | |
spoken of 40 billion. A large sum, I must say. I think that it is | :08:54. | :08:58. | |
right that with 40 billion, and closing some banks, if possible, | :08:58. | :09:04. | |
the banking sector in Spain would be saved, because we have something | :09:04. | :09:10. | |
like seven large banks, the ones known around the world, Santander | :09:10. | :09:15. | |
and others, that are solid and can get out of the difficult them thems. | :09:15. | :09:18. | |
The problem is, how to get that money, because the Spanish | :09:18. | :09:23. | |
Government doesn't want to looks a if it is being bailed out itself. | :09:23. | :09:29. | |
So the money will have to go to some interimmediate institution, | :09:29. | :09:39. | |
:09:39. | :09:40. | ||
and that could be what is called a frog, a bank money a keeps banks | :09:40. | :09:44. | |
afloat and coming from the rest of Europe. Is Spain really any | :09:44. | :09:48. | |
different from Greece, Ireland or Portugal, in other words, why | :09:48. | :09:51. | |
should you get any softer conditions than any of these other | :09:51. | :09:56. | |
countries if you want the money? The plan that is being set in train | :09:56. | :10:00. | |
by the Government, could perhaps be taken a bit further down. Some of | :10:00. | :10:10. | |
:10:10. | :10:13. | ||
the awen tos me in Spain are doing pre-- autonomies in Spain are doing | :10:13. | :10:21. | |
that. To say we want -- the right recipe is to abide by the rules, | :10:21. | :10:25. | |
the Greeks, perhaps, cannot do it, but the Spanish can, and are doing | :10:25. | :10:31. | |
it. They are abiding by the rules, we are abiding by the rules. And I | :10:31. | :10:34. | |
think if you look at our foreign accounts, the deficit of the | :10:34. | :10:39. | |
balance of payments has been reduced and soon there are will be | :10:39. | :10:43. | |
a positive balance of payments for pain. I think that keeping to -- | :10:43. | :10:47. | |
Spain, I think that keeping to the same lines is the right thing to do, | :10:47. | :10:53. | |
and not to organise a super-Europe, with a super-politician in Brussels, | :10:53. | :10:59. | |
whom many of us don't trust. With the Greek elections little over a | :10:59. | :11:03. | |
week away, how do you think this will be seen in Greece, | :11:03. | :11:07. | |
particularly if the conditions on which Spain gets money are | :11:07. | :11:11. | |
different, perhaps softer than the austerity which you have gone | :11:11. | :11:16. | |
through? Can I first just say that the Spanish, are indeed abiding by | :11:16. | :11:21. | |
the rules. This means they have 25% unemployment overall, and 50% youth | :11:21. | :11:25. | |
unemployment, the rules are not working in Europe, austerity has | :11:25. | :11:28. | |
failed. The crisis has the same fundamental cause to it. Spain is | :11:28. | :11:31. | |
not different to any other country in the periphery. The way it will | :11:32. | :11:36. | |
play in Greece will be mixed. A lot of Greeks will be hoping that some | :11:36. | :11:40. | |
how this will mean that austerity will be lessened. That this will | :11:40. | :11:45. | |
lead to a softening of German attitudes across the eurozone. My | :11:45. | :11:48. | |
own view is this is misguided, I don't think this will happen. This | :11:48. | :11:53. | |
is wishful thinking. It is more like had hely that if Spain does | :11:53. | :11:58. | |
ask for -- likely that if Spain does ask for a bail out and it is | :11:58. | :12:03. | |
brought to pass, this will lead to an unravelling of the eurozone in a | :12:03. | :12:06. | |
big way. Do you think Germany is reaching a point where they are | :12:06. | :12:14. | |
thinking, Spain is savable, but let's cut Greece adrift, it is time | :12:14. | :12:17. | |
for you to be out of the eurozone? I think the situation has been | :12:17. | :12:21. | |
allowed to fester for so long, that things that would have happened two | :12:21. | :12:26. | |
years ago and possibly rescued Spain, or stablised the situation | :12:26. | :12:36. | |
:12:36. | :12:36. | ||
as a whole, are now not possible. If Germany thinks cutting off | :12:36. | :12:40. | |
Greece and saving the rest they haven't thought it through. The rot | :12:40. | :12:46. | |
is going on too long. What is necessary to rescue the eurozone is | :12:46. | :12:50. | |
massive restructuring of the whole thing, it is not just letting the | :12:50. | :12:53. | |
Greeks go, it is a Marshall Plan, a bank reorganisation across Europe, | :12:53. | :12:56. | |
it is debt forgiveness, we are talking big things if the eurozone | :12:56. | :13:02. | |
will be resolved. Let's go back to Madrid. I'm glad to see there is no | :13:02. | :13:07. | |
power cuts in Madrid, we can now see you clearly? I'm very sorry, | :13:07. | :13:12. | |
I'm in my house. That is good news for the economy, at least. Do you | :13:12. | :13:17. | |
detect any significant change from Berlin, in the way that they are | :13:17. | :13:19. | |
approaching this, because that is the big signal that everyone, | :13:19. | :13:25. | |
particularly the Americans, as we know, are looking for? Apart from | :13:25. | :13:29. | |
the Americans, that is the President Obama, who believes in a | :13:29. | :13:34. | |
certain kind of economics. Here we need from the Germans help for some | :13:34. | :13:39. | |
banks, as I said, that is not as much money as people have said. The | :13:39. | :13:44. | |
Spanish Government, I think, can go on with cuts and at the end of the | :13:44. | :13:54. | |
year, can show that it is getting on the right way. I don't think | :13:54. | :14:00. | |
that recreating a Europe that intervenes everywhere, and having a | :14:00. | :14:03. | |
European minister of finance, in Brussels, whom many of us will not | :14:03. | :14:10. | |
trust, is the right way. The rot in Greece was started with the Greeks, | :14:10. | :14:15. | |
not with the union. It is the Greeks and the Spanish who changed | :14:15. | :14:24. | |
the way ...I Want to hear another word from Costas Lapavitsas? I find | :14:24. | :14:29. | |
it incredible that two years in to the crisis, it is the tired old | :14:29. | :14:32. | |
mantra, it is the fault of the Greeks. It is the structure of the | :14:32. | :14:35. | |
eurozone itself. We are going to have to leave it | :14:35. | :14:40. | |
there. We have run out of time. Thank you very much. | :14:40. | :14:44. | |
In Syria there was renewed fighting today in the capital, Damascus, an | :14:44. | :14:48. | |
apparent shelling of the city of Homs by Government forces. The grim | :14:48. | :14:52. | |
pictures and stories emerges have so far failed to prod the rest of | :14:53. | :14:57. | |
the world into anything resembling a solution, despite the next round | :14:57. | :15:01. | |
of diplomacy in New York. UN observers risked their lives to | :15:01. | :15:06. | |
enter the village of the latest massacre, Qubair. How significant a | :15:06. | :15:11. | |
moment was it that they were risking their lives and managed to | :15:11. | :15:14. | |
get there? In one sense, you could say they got there too late. | :15:14. | :15:18. | |
Because of the obstruction that took place yesterday, you see a | :15:18. | :15:22. | |
room covered with blood stains, is this a room in which a family was | :15:22. | :15:25. | |
massacred, or was it a room in which people were brought to | :15:25. | :15:28. | |
treatment by those trying to help those who survived what happened. | :15:28. | :15:33. | |
It is very hard to tell. The key point is they did get there. This | :15:33. | :15:37. | |
UN mission, however ineffective it may be, or seem to be, remains a | :15:37. | :15:41. | |
slither of hope, if you like, that there is some sort of diplomatic | :15:41. | :15:44. | |
platform around which the key countries with an interest in Syria | :15:44. | :15:47. | |
could still rally the Russians and the Chinese, afterall, agreed to | :15:47. | :15:53. | |
the mission going in. They are the leaders of the awkward squad in | :15:53. | :15:58. | |
this particular equation. That is a key point, the mission itself have | :15:58. | :16:01. | |
said it was critical they weren't allowed in yesterday, they want to | :16:01. | :16:05. | |
maintain their access. It could be one of the few breaks on the | :16:05. | :16:09. | |
gradual deterioration of the situation that they do. Gradual | :16:09. | :16:11. | |
deterioration, even from this distance, it seems obvious, that on | :16:11. | :16:15. | |
the ground, things are just getting worse? The pattern of the conflict | :16:15. | :16:20. | |
is shifting, I think. We are seeing certain evidence of escalation, | :16:20. | :16:24. | |
clearly these shabiha, these militia groups seem to be operating | :16:24. | :16:28. | |
in a more semi-autonomous way, there is a communal at this timeor | :16:28. | :16:32. | |
at that time building up between certain families and clans and | :16:32. | :16:34. | |
neighbouring villages, on a pattern that might have been seen in will | :16:34. | :16:38. | |
he be I don't know on the civil war and the Bosnian war in the 1990s. | :16:38. | :16:41. | |
There is some evidence of more advanced weaponry getting through | :16:41. | :16:46. | |
to the opposition, Syrian armoured vehicles, a lot of videos appearing | :16:46. | :16:50. | |
of armoured vehicles being destroyed. Sometimes by seemingly | :16:50. | :16:54. | |
advanced anti-tank weapons. All of that could mean the regime sub | :16:54. | :16:57. | |
contracts the war more and more to militia groups, more like a Libyan | :16:58. | :17:03. | |
pattern, armed men in pick-up trucks. All of that is a bad sign. | :17:03. | :17:09. | |
Are there still serious diplomatic options here? There do seem to be | :17:09. | :17:12. | |
some. There is still some scope, the UK and France clearly very | :17:12. | :17:16. | |
disappointed with what's happened in recent days. They seem to be | :17:16. | :17:20. | |
pinning their hopes still on trying to pressure the Syrian regime | :17:20. | :17:26. | |
through coalitions of the willing. The EU, the Arab League, have gone | :17:26. | :17:33. | |
further than the UN Security Council because they are not bound | :17:33. | :17:37. | |
by the same dynamics, they might explore further in that direction. | :17:37. | :17:41. | |
Mr Annan seems to be pushing the Contact Group, regional powers, | :17:41. | :17:45. | |
including Turkey and Iran, the Americans and British don't like it. | :17:45. | :17:49. | |
He is still thinking about it, as became apparent today in this | :17:49. | :17:54. | |
stream of consciousness. All these questions are now being discussed, | :17:54. | :17:58. | |
and we are also exploring how we can work with other Governments in | :17:58. | :18:05. | |
the region and around the world to achieve our goals. One thing which | :18:05. | :18:09. | |
Syria, the eurozone crisis, and a global economic slowdown have in | :18:09. | :18:14. | |
common, is a desire for leadership. Is the apparent lack of leadership, | :18:14. | :18:19. | |
inadequate institutions, flaws in the United Nations, and the EU, is | :18:19. | :18:22. | |
it inadequate politicians always chasing the next election, or a | :18:22. | :18:29. | |
design flaw in the way democracy works. Our guests are with me now. | :18:29. | :18:34. | |
Timothy Garton Ash is a passionate advocate of the ideals in the EU, | :18:34. | :18:38. | |
and Gisela Stuart is a former minister, fallen out of love with | :18:38. | :18:42. | |
the EU project. Tom, in terms of the institutions, | :18:42. | :18:45. | |
we heard our contributor from Madrid saying people don't trust | :18:45. | :18:49. | |
the people in Brussels, is this a worldwide phenomenon. The big | :18:49. | :18:53. | |
institutions just aren't working? really can't speak from a European | :18:53. | :18:57. | |
perspective, but from an American point of view, what we see is a | :18:57. | :19:00. | |
terrible combination of really deep holes, and really weak leaders. | :19:00. | :19:03. | |
Deep holes and weak leaders, you know, can really give you a | :19:03. | :19:08. | |
dangerous crisis right now. I think that, from the American point of | :19:09. | :19:12. | |
view, we have a new generation in power now, in the United States. We | :19:12. | :19:16. | |
have gone from a generation that believed in save and invest, our | :19:16. | :19:18. | |
greatest generation, to a generation that believed in borrow | :19:18. | :19:23. | |
and spend. My generation, the baby boomer generation, we're now paying | :19:23. | :19:30. | |
the piper for that. It is the people's fault? With the leaders, | :19:30. | :19:35. | |
we elect them and say what they can and can't do. There is a timidity, | :19:35. | :19:41. | |
I see the exact same thing, it is a bit of a howler to watch my | :19:41. | :19:47. | |
President lecture your President, my President who rejected his own | :19:47. | :19:50. | |
deficit commission. We're always good at spending other people's | :19:50. | :19:53. | |
money. I wondered if you thought, specifically on the EU, you are | :19:53. | :19:57. | |
obviously in favour of the project, do you think it has been totally | :19:57. | :20:03. | |
oversold bit political elite, it is just not living up to what people | :20:03. | :20:08. | |
said it would do? It is important to say the three biggest economies | :20:08. | :20:11. | |
and political countries in the world, namely, the United States, | :20:11. | :20:18. | |
China and the EU, are all in major crises of their political economy. | :20:18. | :20:27. | |
Tom described the American crisis, and Chinas a democratic crisis. In | :20:27. | :20:32. | |
Europe we have European Monetary Union and policies, our politics | :20:32. | :20:36. | |
are still national. These are democratic national politics, and | :20:36. | :20:41. | |
the biggest problem s the real question is, can you find a deal | :20:41. | :20:47. | |
that will be acceptable both to the Spanish voters and to the German | :20:47. | :20:51. | |
voters? That is the European crisis. There is way of positively looking | :20:51. | :20:54. | |
at that, which is saying, actually, that means we still like our nation | :20:54. | :20:58. | |
states. Broadly we trust them more than some other international body, | :20:58. | :21:02. | |
that may be a good thing in terms of how we get on in Britain, or how | :21:02. | :21:06. | |
French people think about France, but it is pretty bad if you are | :21:06. | :21:11. | |
trying to run 27 countries all together? The nation state has an | :21:11. | :21:14. | |
extraordinarily important function, arguably, with exception of the | :21:15. | :21:19. | |
Balkans, most 1945, Europe had functioning nation states. What we | :21:19. | :21:24. | |
now have is a construction of a financial union, without a | :21:24. | :21:27. | |
political union. Which is trying to overcome the nation state, it is | :21:27. | :21:34. | |
not taking its people with it, and above all, it is incapable of | :21:34. | :21:36. | |
regaining competitiveness. If it was the United States of Europe, | :21:36. | :21:40. | |
France, Spain, all these countries, would still have their economic | :21:40. | :21:43. | |
problems, because you have a single currency construction, which is | :21:43. | :21:49. | |
simply not working. Do you think that people simply distrust | :21:49. | :21:55. | |
eliteings in all the countries. -- elites in all countries. We | :21:55. | :21:59. | |
distrust international elites and elites in our own classes, because | :21:59. | :22:04. | |
they are not doing what we want them to do? You could look at it | :22:04. | :22:08. | |
broadly about not distrusting them, but individuals are so in power now, | :22:08. | :22:12. | |
there is so much transparency, to be in public life, everyone | :22:12. | :22:18. | |
blogging, tweeting, taking pictures. To be a leader now is a lot harder, | :22:18. | :22:23. | |
it is extremely noisy out there. it also, is it the leaders broadly | :22:23. | :22:27. | |
know what they should be doing, but they are terrified of the voters. | :22:27. | :22:30. | |
Because in your Congress every two years they have to be re-elected. | :22:30. | :22:35. | |
You can't take tough decisions if you have a two-year time frame? | :22:35. | :22:41. | |
think our leaders now, presidential and congressional, are misreading | :22:41. | :22:45. | |
the public mood. The public are away head, they understand the | :22:45. | :22:50. | |
problem, they want to be led. Good policy here is the best politics. | :22:50. | :22:52. | |
Do you agree with, that that the people are ahead of the | :22:52. | :23:00. | |
politicians? Can I pick up on that. The hod of the euro group says they | :23:00. | :23:05. | |
know what they need to do, they don't know how to do it and get re- | :23:05. | :23:09. | |
elected. That is the challenge. The key to this moment is one person, | :23:09. | :23:13. | |
Angela Merkel. If Angela Merkel from the beginning of the crisis | :23:13. | :23:17. | |
had said, my dear compatriots, we have to save the eurozone, because | :23:17. | :23:21. | |
it is in our own economic and national interest, we would be in a | :23:21. | :23:28. | |
different place today. So I think it is the challenge of persuasion | :23:28. | :23:35. | |
by democratic national leaders, and the eurozone will stand or fall on | :23:35. | :23:39. | |
democratic national politics. talks of Europe, but she thinks of | :23:39. | :23:47. | |
Germany, that is hardly surprising, that is what leaders do? It is | :23:47. | :23:51. | |
shocking that we said the politicians know what the right | :23:51. | :23:56. | |
answers are, but they can't do it because they can't take the nation | :23:56. | :24:00. | |
with them. The question is I as a politician take money out of your | :24:00. | :24:06. | |
pockets in taxes and do things, and that is what you elect me to do. | :24:06. | :24:11. | |
So-to-think that Germany could continuously rescue Spain and | :24:11. | :24:15. | |
Portugal, Angela Merkel knows, she knows that they have poured | :24:15. | :24:19. | |
millions into East Germany and it hasn't made them competitive. | :24:19. | :24:22. | |
don't disagree, because if she doesn't persuade the German people, | :24:22. | :24:27. | |
then the thing will go down. Actually the Irish have just voted, | :24:27. | :24:31. | |
in a referendum for a Fiscal Compact, let's agree you need to | :24:31. | :24:35. | |
ask the people. Ireland is still in recession, they have not resolved | :24:35. | :24:39. | |
the problem. Unlike places like Iceland, it has not been able to | :24:39. | :24:42. | |
devalue. Ireland hasn't been solved. Do you want to tell the Irish to | :24:42. | :24:46. | |
vote again, because they gave the wrong answer, they said yes? | :24:46. | :24:49. | |
need to allow countries to leave the euro, because the current | :24:49. | :24:54. | |
construct will not survive. We can either delay the day of reckoning, | :24:54. | :24:58. | |
or we can draw the logical conclusion and say this construct | :24:58. | :25:02. | |
doesn't work. I'm all in favour, if they vote for it. Do you see, while | :25:02. | :25:06. | |
you said the people may be ahead of the politicians, maybe not | :25:06. | :25:11. | |
everywhere. But to take Greece, for example, the fate of much of Europe, | :25:11. | :25:16. | |
and perhaps the world economy, depends on a very few voters in a | :25:16. | :25:20. | |
very small country, lovely though it may be, that seems rather odd, | :25:20. | :25:24. | |
does it not, that they decide how the eurozone should continue, which | :25:24. | :25:30. | |
affects all of us? It certainly seems odd to me. I agree with what | :25:30. | :25:34. | |
was said about competitiveness. Ultimately, can you make stuff that | :25:34. | :25:38. | |
other people want to buy? Can you have a currency and an economy that | :25:38. | :25:41. | |
is aligned with that? What worries me when I look at Europe today, is | :25:41. | :25:46. | |
not banks that are too big to fail, I say is this problem too big to | :25:46. | :25:50. | |
save. I do have sympathy with Merkel. I agree with what Tim said | :25:50. | :25:55. | |
too. She's damned if she does and if she doesn't. She needs Europe | :25:55. | :25:58. | |
for a thriving German economy. But at the same time, what confidence | :25:58. | :26:02. | |
would you have that the Greeks really get it and can produce a | :26:02. | :26:05. | |
competitive economy in this construct. I really think the | :26:05. | :26:08. | |
crisis retina, the choice for Europe today, they are going to | :26:08. | :26:13. | |
have a political crisis, as they inflict the pain, or they can have | :26:13. | :26:18. | |
an economic crisis, or maybe both. I'm fastening my seatbelt, I tell | :26:18. | :26:22. | |
you. In terms of Angela Merkel, you said | :26:22. | :26:25. | |
it is up to her, she could have played it differently, she could | :26:25. | :26:28. | |
indeed have played it differently, but in all the countries we have | :26:28. | :26:32. | |
been talking about, the U state and Germany, constitution -- United | :26:32. | :26:35. | |
States and Germany, constitutions are written so Angela Merkel can't | :26:35. | :26:38. | |
be a really powerful Chancellor, she has so many people to look | :26:38. | :26:42. | |
after and bring with her, it is very difficult? It is very | :26:42. | :26:46. | |
interesting, as Tom knows better than anyone, the United States has | :26:46. | :26:49. | |
an increasingly dysfuntional political system, because it has | :26:49. | :26:53. | |
almost too many checks and balances and lobbies. The German political | :26:53. | :26:59. | |
system was designed to ensure that no Adolf Hitler would ever come to | :26:59. | :27:02. | |
power again T has been immense number of checks and balances, that | :27:02. | :27:06. | |
makes it very difficult to move. That is indeed one of Merkel's | :27:06. | :27:11. | |
problems. That she's not in the position of a French President, or | :27:11. | :27:16. | |
a British Prime Minister. Nonetheless, I think if she started | :27:16. | :27:20. | |
to try to persuade her compatriots, three or four years ago, that it | :27:20. | :27:24. | |
was in their own national interest. Let me bring in Tom there, you | :27:24. | :27:30. | |
could say the American constitution was to prevent another George III. | :27:30. | :27:35. | |
You have gridlock, and a lot of people complain about, but it is | :27:35. | :27:40. | |
what makes America tick? We have divided powers, but what we didn't | :27:40. | :27:44. | |
anticipate was this level of money in politics, this kind of media, | :27:44. | :27:49. | |
that fragments it, politicians are finding it difficult these days any | :27:49. | :27:53. | |
way to trump the other. Do you realise what we are doing, we are | :27:53. | :27:57. | |
having an election, you have your crisis over here, we have an | :27:57. | :28:00. | |
election, and we are saying in five months when we finish the election, | :28:00. | :28:05. | |
you keep it on hold. After our election, and one party spends a | :28:05. | :28:09. | |
billion dollars smeerg the other, then we will get together and solve | :28:09. | :28:13. | |
the problem -- smearing the other, then we will get together and solve | :28:13. | :28:18. | |
the problem. Good luck, we are doing things so detatched from the | :28:18. | :28:25. | |
reality. The voters at the moment are ahead of uss, people know -- us, | :28:25. | :28:29. | |
people want to know what is going on. If you have to increase taxes | :28:29. | :28:32. | |
and reduce public spending, people are prepared to take the pain if | :28:32. | :28:34. | |
the result will get you competitiveness. What we have | :28:34. | :28:38. | |
currently in Greece and Spain, they can cut their public spending, they | :28:38. | :28:42. | |
can increase the taxes, but where they will not become competitive, | :28:42. | :28:48. | |
that is where democracy suffers. Coming up in a minute, the review | :28:48. | :28:51. | |
show, matter that is in Glasgow. Tonight's review show is a book | :28:51. | :28:55. | |
special, we're going to be looking at the latest offerings from a | :28:55. | :28:59. | |
quartet of literary big names. Martin Amis tackles the state of | :28:59. | :29:07. | |
England, we have the retail of the life of Roger Casement, and Lionel | :29:07. | :29:10. | |
Shriver creates her own corner of Europe in the new Republic, all | :29:10. | :29:17. | |
that and music from Paul Buchanan. That is all tonight, we leave you | :29:17. | :29:25. | |
with the final farewell from the Bee Gee RobinGibb. This is the song | :29:25. | :29:30. |