23/05/2012 CF99

Hello and welcome to CF99 for half an hour of political discussion.

Tonight, the euro is in peril

and what is the effect on the Welsh economy?

And does the way we elect Assembly Members need to change?

We will discuss the Welsh Secretary's comments.

Joining us tonight is the AM and former Plaid Cymru leader,

Ieuan Wyn Jones. Economist Dr Martin Rhisiart,

and Conservative MP, Guto Bebb, who joins us from our Westminster.

Welcome.

The leaders of the eurozone countries are in Brussels

to try to ease the strain on the euro in Greece and beyond.

It is quite a task bearing in mind the OECD warns the euro crisis

is the biggest threat to the global economy.

But what are the possible repercussions here in Wales?

James Williams reports.

The Greek Orthodox Church in Cardiff.

Congregants here are seeing their country suffer in the distance.

After uncertainty, they say it is difficult

for the country to keep its faith in the euro.

I'm concerned about the situation.

I don't want to see what happened in the '30s

happen again to the country of Greece.

We have to make sure that people can turn against each other.

The danger is what happens in Greece

could cause a domino-effect in Europe.

David Cameron has said he is considering the general election

in Greece as a referendum on being part of Europe.

The prime minister is worried that if the people of Greece

don't make a clear point in the elections,

it could cause problems for other economies.

The eurozone countries are dependent on other economies.

As a result of this, Welsh meat export is booming.

Exports in Britain are at their highest ever point.

But for other industries which have had problems in the past,

this is not a time to rest on their laurels.

Looking to the Far East and the Middle East, Canada,

we have been very successful exporting to those countries.

It also means that we are less dependent on eurozone countries

and that will become more and more important as time goes on.

But what about those not in the traditional businesses?

But what about new industries?

Starting up a business is always going to be a risk.

With the current economic climate in Europe,

we are not going to aim for European markets without being competitive.

With the UK in another period of recession

how do people in places like Carmarthen feel about the future?

I happen to be a farmer. It has a massive impact on us.

The strength of the pound and the euro

has a massive effect on what we get for our produce.

Everything has gone up in price apart from our wages.

I think instead of the austerity measures,

we need to put more money into the economy.

We have two problems, people are earning less money

and so they are spending less.

They are starting to pay back their debt rather than take out loans.

So that makes it difficult for companies to plan for the future

and it is harder to take on staff and to expand

which makes the problem even worse.

These decisions over the future of the euro won't be made lightly.

These congregants are hoping their country could be resurrected.

That report from the Greek Orthodox Church in Cardiff Bay.

Guto Bebb, you have been cynical about the euro from the start.

But nobody could have predicted this. Is that right?

-Do you hear me, Guto Bebb?

-No.

I'll ask the question again, as a euro doubter,

You are not happy with what's happening?

No, not at all.

What's frustrating is that we had foreseen this.

Many people in Britain and beyond thought that they knew better

than us eurosceptics.

But the truth is, if the eurozone continues as it is,

it's very difficult to see where economic growth

is going to come from.

If the situation remains the same in Europe

interest rates are going to rise and become less competitive

because banks are holding on to their funds.

It is a very dangerous situation,

but the sad thing is that some people did foresee this.

It's sad that the European Union is going to be split by this.

Do you think we will have to split,

Do you think Greece and some other countries

will have to leave the euro?

Greece isn't really the biggest question.

Greece is the same size in Europe as Bath is in the UK.

Greece is not the problem by now.

But if Greece leaves the euro, the question is

whether or not Italy, Spain and Portugal can remain.

It has a knock-on effect.

And the debts of those countries make the Greek debts

look like child's play.

We have to ensure that the future of Greece within the eurozone

is secure.

The effect of seeing Greece leave the euro would mean that

Spain, Italy and Portugal would fall like dominoes.

Martin Rhisiart, the leaders are currently meeting in Brussels.

This is being portrayed as a choice between Angela Merkel's

austerity measures and Francois Hollande's spending for growth,

but don't we need both?

We do need both.

They do have different points of view and Germany has more to lose

by going towards eurobonds for example,

which would spread out these debts.

It is not a choice between one or the other because we need both.

But we need some positive and creative options

to make sure that there is economic growth.

All of these options basically deal with moving wealth

from the north to the south.

Especially the wealth from Germany

and spread it out among other countries?

Yes, if all these countries had followed the rules

we wouldn't be in this situation.

Britain has been able to use quantitative easing.

We have dealt with some of these debts in those ways.

In the eurozone, that isn't possible.

We have to move wealth from the north to the south

and that is where political difficulties arise

because Greece are being forced to accept these financial packages

or face dire consequences.

Ieuan Wyn Jones, if you were there tonight,

would you be encouraging Angela Merkel

to open those purse strings and spend?

It is possible to spend because there isn't the money.

But maybe we need to take a more soft approach to Angela Merkel.

If this is going to work, we need to keep Greece within the euro.

But if countries within the euro start to vote against it,

we will see the political pressure increase on Greece

to leave the euro.

Guto Bebb and I haven't agreed over this euro question,

but I would agree with him over the fact that it was a mistake

for Greece to join the euro in the first place.

It wasn't for economic reasons but for political reasons.

I don't think they or many other countries were prepared to join.

Would you and other politicians across Europe

let this ideology trump common sense?

There were people as Guto Bebb said,

saying at the time that these countries weren't ready.

Everything is going to turn into a complete mess.

I agree with the statement

that some countries joined when they weren't ready.

I was surprised when Greece and Spain joined when they did.

Some argued that Italy shouldn't have joined at the start.

The project was too important to be influenced by political pressures

and I think Germany then was eager to see this happen

for reasons beyond economics and finance.

Let's bring this back home.

Guto Bebb, looking at France, they haven't had much growth

but no recession and they are in the euro.

There is growth in Germany and they are in the euro.

But Britain isn't in the euro

and yet we are in a double-dip recession,

so it's a recession created in Downing Street.

Labour were right?

No. I think the reason we are in the trouble we are in

is because there was reckless spending during New Labour.

Half of Europe's credit card bill is in Britain.

A third of all European mortgages is in Britain.

The situation here is, the public has such a high level of debt

it cannot sustain the economy in a growth situation.

We see that we the economy is exporting more

and we are creating more private sector jobs.

So where is the plan for growth?

Christine Lagarde said we needed to perhaps consider Plan B?

She didn't say that it was definitely time for that yet,

but she was doubtful about the success of the current plan.

I would say that our decisions have saved

Britain from a catastrophic situation.

We have lost our ability to pay our way in the world.

I find this plan for growth ridiculous.

Are you really suggesting that this Westminster Government

doesn't have a plan for growth? That is a silly suggestion.

We are trying to take control of the debt

and invest in the country

and public spending isn't falling at a dramatic rate.

It is being treated sustainably

so that Britain can borrow money at rates that countries such as

Italy, France and Spain can only dream of.

In Europe, Germany is the only country borrowing

at better rates than Britain.

That is as a result of the current plan.

Ken Clarke said that only a fool would say they wouldn't want growth.

The problem is how to achieve growth in view of what is

going on in the eurozone.

Yes, Christine Lagarde suggested more quantitative easing.

There are suggestions that another round of that will

happen in coming months.

She suggested we dropped interest rates which is currently at 0.5%

so it can't go down much more.

There isn't any certainty the banks would transfer that cut

to companies anyway.

And for many people, especially older people who depend on savings,

that lowers their savings.

They will have less money to spend to feed back into the economy.

Yes, it is quite a grim picture at the moment.

About 40% of our markets in Wales deal with eurozone countries.

If there is a drop in the euro there will be a run on the banks,

and it's nu surprise some British banks would go bust.

Stress tests have been released by the FSA

and banks would have less money to lend to consumers.

Ieuan Wyn Jones, as the man who was responsible for the economy

what should Carwyn Jones do about this?

Another thing that Christine Lagarde said -

and what the UK Government hasn't agreed to - is about infrastructure.

You can stimulate the economy that way.

-And the Government here isn't doing that?

-No.

Not in the way I would like to see it.

The Westminster Government isn't doing that either.

Part of the UK Government's problem is,

when they published this plan,

they predicted a growth of 2% and it is at less than 1%.

What about the government here?

The macroeconomic issues are in the hands of Westminster.

The Assembly Government has a peripheral impact on this.

The Westminster Government hasn't got a Plan B.

Their plan has failed because growth is at half the rate

than they expected and people will as a result lose their jobs.

The Welsh Secretary has launched a consultation which looks at how

Assembly Members should be elected in future.

At its roots are plans to reduce the number of Welsh MPs to 30.

If the plans see the light of day, Cheryl Gillan recommends the Assembly

election system should be changed to ensure across-the-board fairness.

Elliw Gwawr has been looking into this.

In 2004, the Richards Commission suggested increasing

the number of Assembly Members to 80.

The recent One Wales Convention

said the current number is sufficient.

What will this consultation offer?

One option is to create 30 new constituencies

to match the number of Westminster seats,

with the number of regional seats increasing from 20 to 30.

Another option is to remain with the 40 constituencies

and the 20 regions but change the boundaries

so that they are more equal in size.

I think the people of Wales should have a say in this.

We shouldn't feed people the system from Westminster.

It should be put to the vote.

The Conservatives in the Assembly say that the current system works

and they will campaign against any changes.

But if there are to be changes, Peter Hain has already said that they would

favour 30 constituencies with two elected through first past the post.

Cheryl Gillan has rejected this suggestion.

It looks to me as though a Westminster agenda

is taking priority here.

I don't think that there is an appetite or mandate in Wales

for this kind of change.

Perhaps this is a matter which excites political anoraks,

but what about ordinary people?

Guto Bebb, why should we change the current system?

A good question.

I think that there is evidence to suggest a Scottish situation

can create complexities.

The Scottish Parliament have different seats,

different constituencies to the Westminster constituencies.

I do wonder why the green paper didn't include the status quo

as an option.

If it's a paper looking for people's opinions

I think it should be at least one of the choices.

I'm not comfortable with the idea of having 40 seats

being made equal in terms of size because I think one of the problems

we have in Wales is the feeling in North, Mid and West Wales

is that the Assembly is quite Cardiff-centric.

I think that change the boundaries to create 40 equal sized areas

would be a mistake.

I sympathize with the argument that the Assembly needs

to have a say in this.

You're not happy with Cheryl Gillan?

The Green Paper has been published to create a reaction.

I will respond to it in that spirit.

I feel as though the Liberal Democrats and the Conservatives

have a mandate to change the boundary changes in Westminster,

it was in the Conservative manifesto but it didn't mention the Assembly.

I think forcing a change without Assembly backing

would really raise some questions over whether or not

the Assembly should make its own decisions over such matters.

That's what I'll say.

So you think they should keep their nose out of it?

-Sorry?

-They shouldn't interfere.

No, I think it is important to encourage debate,

but if they want a response, it is important that Conservative members

and all other party members should have their say.

I'm sympathetic to the idea of having 30 seats

and 30 regional seats, but it is not my decision as an MP.

Carwyn Jones made a similar argument.

Ieuan Wyn Jones, if Labour were to win 31 seats here,

which is quite possible, and the changes had been introduced,

there would be nothing to stop Labour from introducing

a first past the post system and Labour will be in power forever.

There are dangers in changing the voting system

without some kind of referendum beforehand?

I disagree with that.

I think it should be for the Assembly to decide.

-A simple majority?

-No, we would need a consensus.

We would need a consensus in favour of it.

I don't think for a moment that Labour would in reality

consider pulling out of proportional representation.

It has happened here.

Peter Hain suggested the exact same thing.

The people of Wales just wouldn't accept

that as an option in the same way as they didn't accept

it as an option that the Assembly were to be dismantled.

It is something we have to tackle.

Guto is right. This Green Paper is very narrow

and it doesn't consider every possible option.

We should look at other options.

The Richard Commission suggested we look at the STV system.

That's what my party wants to see happening.

That has to be part of the discussion.

It goes back to the '90s when the Richard Commission was set up.

Do you think people are concerned about this?

We were talking about the economy and now there is another Green Paper

on the constitutional matter?

Is this what people are more likely to be talking about in the pub?

No. I don't think many will be talking about this.

I think they're most likely talking about jobs,

I don't think they'll be talking about the euro either,

but this is a topic of discussion for the political anoraks.

It is important to look at who should decide in this matter.

I would prefer to see something similar

to what the Richard Commission suggested.

We need more Members.

But is there potential for confusion if constituency boundaries

differ between these elections and the ones in Westminster?

Not really.

It works in Scotland. I don't think people like the result,

that the SNP is in power there.

It is clear that the people of Scotland can differentiate.

People are fairly sophisticated

and they understand what is going on.

When you have fought certain in constituencies

I don't think there is any cause for concern.

Another point in this Green Paper is the idea of this five-year

Assembly term, the same as Westminster.

Would you welcome that change?

I have no strong feelings on this matter.

I don't think there's much difference between four to five

or a difference between five to four.

I don't think that's being discussed in pubs either!

I think there are other interesting matters in the paper.

For instance I think it is a sensible suggestion

for people to stand for a constituency and a region.

I think Peter Hain's decision in 2006 had been created

to undermine the opposition parties. That's a step we should welcome.

It's three years in Australia.

Lord help us if that should happen here!

The important thing is not the length of the term,

but that it doesn't clash.

You don't want the Assembly and Westminster elections

on the same day. We have to avoid that.

We need to discuss this now.

From a Green Paper to The Western Mail newspaper

and today saw a backlash over the editorial on the front-page

of yesterday's paper.

The article attacked the suggestion by the committee overseeing

the Language Bill that all Assembly meetings should be

translated into Welsh at a cost of £400,000 a year?

What did you think of the paper when you saw this headline?

I was surprised.

Whatever The Western Mail is trying to argue

this is going to be seen as an attack on the language.

They are trying to argue that it wasn't.

That is how it is being taken and I think that is unfortunate.

This paper is seen as an important thing in the promotion

of the Welsh language.

-You'll still buy it?

-I will still buy it.

But I know some people are talking about boycotting it.

This brings up a basic question about supporting the language.

It is very unfortunate that The Western Mail is being portrayed

as an anti-Welsh language newspaper now.

It was interesting from a business point of view.

This will alienate some of its readership?

Surely this was a mistake?

I think it was a tactical error

because consensus isn't always healthy in politics.

Somebody has to oppose the accepted status quo,

but I think it was the style and way in which it was done

that shocked people.

To put it on the front page, I think, was a poor tactic

and I think they will realise

that from the opposition they have received.

-Guto Bebb, was it a mistake?

-Absolutely.

People from The Western Mail have been writing to us

asking us to persuade the Assembly to advertise in the paper.

It seems that advertising jobs in the paper is all right

but translating minutes into Welsh isn't.

I think that speaks volumes about The Western Mail.

Thank you.

That is all for tonight. See you at the same time next week.

Until then, goodbye.