Wed, 2 Nov 2011 CF99

Hello. Tonight as the Greek tragedy continues in Cannes,

what will the outcome be for the euro?

And God and Mammon in St Peter's.

The protesters receive a welcome here in Wales.

We are joined here by the AM Dafydd Elis-Thomas from Plaid Cymru

Suzy Davies from the Tories

and Economist Dr Martin Rhisiart from Glamorgan University.

Cannes is used to many an exciting script

but there is a live political drama unfolding tonight

which deserves the Palm D'Ore.

Politicians are trying to resolve the euro crisis.

G20 leaders are trying to solve the crisis.

The twist in the tail is George Papandreou's decision

to allow a reform on EU financing and endangering European economies.

Here's Elliw Gwawr.

It's film stars who are usually seen in Cannes.

Tomorrow it will be Nicolas Sarkozy who will be in the chair

as G20 leaders meet to discuss the international economic crisis.

I haven't been sent to Cannes

but what better place to come to follow the drama than the cinema?

I've even got popcorn.

There won't be a red carpet or parties for the politicians here

as they concentrate on trying to find answers

to the financial crisis in Europe and trying to find a way

of preventing the international economy from another recession.

But it won't be easy to get the cast of the G20 to perform as one.

Many leaders have their own views,

on how to deal with the economic crisis.

Greece's decision to hold a referendum on the latest offer

could undermine any decision made in Cannes.

We have had many attempts to try and reach a political which have failed.

Greece's decision to hold a referendum

has caused even more uncertainty. I am not very confident.

You can't carry on with the economy keep going one way

and then the other.

It makes plans as private companies more difficult to implement.

We have to have political stability therefore it's crucial

that we get stability as soon as possible.

America still rules the film world,

but in the financial world, things are changing.

The East is looking towards China to contribute a substantial

amount of money needed to save countries like Greece.

Again, there is danger that China will say

that it's willing to help but they are not prepared as much as needed.

For the big banks, let them collapse.

We can have proper banking not this speculation

in the public sector as they do in China.

That would ensure that the banks would act in a way

that helps the economy.

What happens in Europe and across the world affect us all

With people feeling the pinch, there are fears things could deteriorate.

We see prices rising

Every time you go shopping, you realise that you've spent more.

It makes you feel worried about the future.

Next year, the Eisteddfod is coming to the Vale.

We realise it's harder to raise money.

People who would usually give a £10 now only gives you £5.

When you mention the bankers, they have a lot to answer for.

With increasing problems in the euro zone,

reaching an agreement in Cannes is crucial.

But they won't be able to offer a solution overnight.

At present, it's hard to foresee how this drama unfolds.

Martin, words have lost their meaning over the last few years

Words like historical, crisis.

How important are these next few days?

They are crucial.

We saw the G20 have powers in 2008.

There were measures then to cut interest rates.

They had powers to implement international policies

and to put stimulus into the economy.

This time, the cupboard is a little bare.

There isn't definite measures that they can take.

Everything depends on Greece and the euro.

As far as I can see, only two things can happen.

Either there will be temporary measure

or we will have to face the crisis immediately.

Perhaps some would say this is better.

If the referendum takes place in Greece,

it won't happen until January. This is a long way away.

What is very worrying is what happens following the referendum

especially to Italy.

There is a lot of concern for Italy.

Their debt has risen to more than 5%

which makes it difficult for them to pay that back.

They have around 250 billion to repay in the next twelve months.

If there isn't a trillion euros on the table,

which was agreed last week, maybe things aren't looking good for them

How much of this depends on the standard of the leaders?

About a year ago, I was discussing Greece, Ireland and Spain.

Now we are talking about Italy, has all of this happen

because of political problems and the lack of leadership?

I think that's right.

If we look back on the euro, every country had a discipline

to keep to the rules, but we have seen the same weakness emerging

with Greece and Italy where they have huge economic problems.

We see the same problems, so it's not the euro's fault.

It's the same old problem.

Dafydd Elis-Thomas, Greece is a very strong democratic country.

Isn't the leader correct to have a referendum on this issue?

I don't think that it's right for a prime minister

to try and solve his internal party problems.

I know others have done it before him.

But the biggest problem is what faces Germany and France

as main bankers especially France in the case of Greece.

I foresee that they will have to move faster

towards a complete monetary union within the euro zone countries.

That would, perhaps, have to leave Greece behind

because I can't see how else to solve it.

What, they go back to using the drachma?

That's a matter for them to work out.

But if the politics, and this is the democratic question,

if the local politics cannot live with the financial arrangements,

then they are likely to cause significant change.

That will weaken their situation in the future,

but remember, we are members of a state

which has refused to be part of this for one reason alone,

which is to continue a financial system which is failing in itself.

Is it worth, considering the importance of eurozone countries,

and the importance of the eurozone to the world's economy,

is it time people said that Greece is a small country

which doesn't work effectively and is not governed officially,

it's time to drop it?

That's a matter for the eurozone.

But the decision will affect us.

Of course. That's why it's important.

In my opinion, it is not possible to discuss this

and think about what could happen in the future

without considering whole world thinks about this.

Greek debt affects the eurozone,

and they're our partners in the market.

Our partners from outside the eurozone

are affected by our reaction to this debt, as well,

so it is important to have some kind of agreement in the G20.

It's going to be hard to reach an agreement

as to what Greece should do.

You have spoken about Italy already,

but that would be the big story.

It is already a Greek tragedy,

but if this problem moves to Italy and they can't pay their debts,

we are talking about a sum of more than ten times that of Greece.

Yes, we are. They have a debt of 1.9 trillion.

It was 1.8 trillion last week. I don't know where that is heading.

The cost of servicing that debt for them increases every week.

It will continue until they have a settlement over Greece.

If something similar happened in Italy,

it would be over for Italy in the euro,

and I see a Europe working at two speeds.

A much smaller euro pass

with Germany and France leading, as they do now,

and the smaller countries worse off.

And countries like China refusing to invest.

They have already said they won't invest a penny

until the Greek problems have been sorted.

Exactly. Even the IMF and the EU,

who promised to give Greece £8 billion within the fortnight,

and they are refusing to pay out at the moment

in case something happens.

It is also a moral question?

China is a country that is growing fast

with a lot of very rich people,

but on average, living standards are much lower than they are in Europe.

Is there way of justifying asking a country

which has much poorer people than us to save our skin?

Well, China is having a boom, in a way.

Although there are many bad debts there at the moment.

One of the problems with what is happening now in Cannes

is bad debts are becoming more obvious,

and people are asking if China is in a situation

to contribute in response to this?

But morally, should it, or should Chinese wealth

be spent to improve lives of Chinese people,

rather than maintain our standard of living?

But the boom has come suddenly.

Like with all attempts to raise people's living standards,

it takes time.

I don't think China has persuaded the world they can do this.

Would China's investment safeguard the European market?

Exactly. That is the situation we're in.

What this shows very clearly

is you cannot have a free market.

We have been suffering for years in the UK

as a result of regulating markets.

The same thing has been evident in the United States,

with all these bad debts.

And for me, from a green and sustainable point of view,

coming back to the idea that with every financial challenge,

it affects on real resources and the real economy.

I am very interested in the possibility

of moving towards the situation

where any movement in the financial market

is truly reflected in the cost and resources of the earth.

That is the biggest lie in capitalism.

Another word on the euro, Dafydd Elis-Thomas.

Looking at what's happening in Cannes,

do you acknowledge William Hague was right in his Save the Pound campaign?

Of course he wasn't.

The euro was part of a development in the EU

which, to me, was sacred.

-Are you glad we're not in the euro?

-No, not at all.

There are financial reasons which I mentioned earlier

due to the importance of the financial markets in London.

Would you like to be in the euro?

There is no other way to go.

Thank you very much.

Anti-capitalist protestors are still campaigning

outside St Paul's Cathedral tonight.

The last few weeks have seen Church officials

in total confusion about what to do about them.

Today, the Archbishop of Canterbury, Dr Rowan Williams,

said he sympathised with their cause.

Earlier, we spoke to the Reverend Glyn Tudwal Jones to get his opinion

on the Church's response.

In one sense, the response has been untidy,

and there has been disagreement amongst those who have resigned,

but the principle is strong in that the Church stands in favour

of those trying to save the poor and disadvantaged in society.

They have been put in a difficult position

with this square that belonged to them and what was going on there.

The nature of the situation has changed, so it was difficult.

But on the other hand, today, the Archbishop has given clear

leadership to turn the focus away from the Church

and back to the point of the thing.

And he has done that very successfully today.

It might have been a good thing had he gone down on the first day,

but it has drawn attention back to the protest

and shown where he stands.

You cannot be a Christian and a member of the Church

without getting involved in a situation.

Not in any political party,

but in a political situation, and an economic situation.

That's the leadership we have been shown by Jesus Christ.

Reverend Glyn Tudwal Jones.

Can I ask you, Dafydd Elis-Thomas,

as a former member of the Church of Wales leadership,

what welcome would protestors have received here?

There wouldn't have been a problem. The doors would have been open.

I can't imagine members of any churches in Wales

would have acted in the way in which those in St Paul's have done.

But I understand where it comes from.

They're part of a large establishment.

The Church of England is part of the establishment,

even in positive times.

Suzy, what was your response? I think it was the Bishop of London

who said that there's no worse image for a church than a closed door.

The church has come out of this badly.

It has been a surprise, I must admit,

because the problems were a health and safety issue.

That's what they said.

Having seen what was going on on those steps,

I didn't see a problem.

It's a shame because I think the church has a voice in this matter.

I don't see why it shouldn't.

I don't know if it's an overreaction,

but it's a shame to lose two men as a result.

When we think of Christianity

we think of things like helping the poor and the vulnerable

but the church seemed to do almost the direct opposite.

And not just the protesters

because a lot of people in London use the cathedral as a local church

and the doors were closed to them.

I'm glad that it's come to an end.

Martin, the City boys were very fortunate

that all the attention was on the Bishop of London and his deacons

rather then the original target of the protest, the stock market.

Yes. The protesters had been denied access to there they wanted to go

so I think it was a temporary camp

but it has kept the attention on the main issues.

The protesters and the public feel there's something seriously wrong

with the form of capitalism we currently have in Britain

and in many countries across the world.

Rowan Williams has written about that in the FT today.

He's put forward a different direction for the economy.

Everyone's asking what the Plan B is.

Well, Rowan Williams, quoting a document from the Vatican,

has come up with one with the Church offering a Plan B.

Yes, it's interesting to see how institutions have evolved.

The Catholic Church, for a long time,

has said a lot about the economy

and how we should respond in business, in society.

What's happened reflects what has been happening

with new economic organisations and green economic organisations,

which have been saying for decades

that we should follow a new direction of development.

Suzy, one of the ideas is this Tobin tax.

Why isn't David Cameron going for it?

He has explained that he's not against it in principle.

It's important to get the whole world to buy into it.

Why don't we set a precedent?

Because it doesn't effect the whole world. It can have an effect...

If London did, everyone night follow.

If London can't,

the other countries in the eurozone will be looking for it.

We trade with countries in the eurozone

and if it effects them, it effects our discussions in London.

But there could be problems if the discussions go beyond the eurozone.

They would loose more money.

Dafydd Elis-Thomas,

it seems to me that not everyone is part of the consensus

but that people want to keep the positive aspects of the markets

to raise capital and so on, but get rid of this casino element

in exchanging things just in order to gamble to make a profit

without any value in the economy.

How do you do that as one country?

Is that possible, or do we have to wait for it to happen elsewhere?

We have to do it on a regional level

and that's where the European Union remains so important.

But I'm looking forward to what will happen

at the summit next year.

There's a summit before then to discuss how we can improve

the governance of markets and capitalism and the green economy.

One of the problems I have is that the agreements

that have been discussed regarding climate change

haven't had a strong enough legal basis

so that they genuinely regulate the economy.

As I referred to earlier,

I want to see...I was inspired many years ago

by one of the gurus in this field, Amory Lovins,

and he talks about what he calls natural capitalism,

which means, when financial dealings take place,

that it's counted in terms of the Earth's resources.

I think we have to move in that direction

and the way to do that is by increasingly including

these market elements and natural elements

and their effects together and count the costs.

That is a fundamental change,

but it means creating digital wealth isn't true wealth.

That disappears.

Are the bankers going to listen, Martin?

No, I don't think so.

The only thing that will encourage them to change is regulation

or significant pressure.

I don't think it will happen on its own.

The threat is that they will move to Singapore

or anywhere else that is willing to give them more freedom.

The City has contributed a lot economically,

but what the British Government and the governors in Britain did

during the '80s and '90s became increasingly extreme.

During the last three years,

we've seen that we need to re-balance the economy

away from financial services and more towards manufacturing again.

Countries like Germany continued with the old tradition

even though their financial services were strong.

I think we're seeing a sensible response now

and we're retuning to a more sustainable system.

But the markets are important

because the free market can do things that governments can't.

Suzy, isn't the truth that Governments of all colours

have been afraid of the City?

They've been afraid of the City's power

and have been weak in dealing with these problems?

I don't think "afraid" is the right word.

There's a lot of respect, of course.

The financial sector remains a place

where we can achieve growth in the economy.

The relationship between the City

and a government of any colour is still important.

There has been too much emphasis on the financial sector.

That's why it's important the economy

has more successful sectors

and there's less emphasis on the financial sector.

We have to leave it there.

The protestors will be able to stay until the New Year.

I'm sure we'll discuss this again.

We'll be back at 10.20pm next Wednesday.

-Until then...

-Good night.

-Good night.