04/11/2011 Daily Politics


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Afternoon, folks. Welcome to the Daily Politics on Friday. Greek


tragedy descends into farce with profound implications for the


future of the eurozone and the world economy. As Prime Minister


Papandreou faces yet another vote of confidence, EU leaders and the


Treasury think the unthinkable - Greek departure from the euro. Can


it be avoided, should it be avoided and what would it mean for the rest


of us? As G20 leaders scratch their heads and wonder what to do, we'll


have the latest from Athens, the City of London and one of the most


powerful British members of the European Parliament. And remember


this? Was the ban on fox hunting really worth the fight? We talk to


the man who pushed the controversial legislation through


Parliament and a Tory MP who wants David Cameron to keep his promise


And with me in the studio is Bronwen Maddox, editor of Prospect


magazine, and the Mirror's Prospect is for intellectuals and


So George Papandreou is still the Greek Prime Minster but for how


long is anybody's guess. This time yesterday we reported that he was


on his way to the President to offer his resignation. We even


named a likely successor. But those reports turned out to be wrong.


He's still there. Though for how long is another matter. Until


yesterday afternoon we thought he wanted to hold a referendum - but


it turns out he doesn't. And yesterday there was talk of a


government of national unity. But there isn't one. Confused? Join the


club. So where now for this Greek tragedy? Yesterday, and forgive us


for the togas but we had to do it eventually, the key players were


working frantically to find a way out of the mess. Mr Papandreou


offered to abandon the now infamous referendum and instead proposed a


coalition government. The markets rallied on the news but his offer


was rejected by the leader of the Greek opposition who called on him


to resign. So far he's staying put - no referendum vote. But he faces


a vote of no confidence in the Greek Parliament tonight. Meanwhile,


in Cannes, the G20 leaders are left like spectators at the feast. Jose


Barroso, who's President of the European Commission, has admitted


that there is a possibility Greece could leave the euro and that


preparations are being made if that happens. Last night, as fears


increased that Italy could be the next country to implode, key


European leaders and President Obama met to discuss the crisis.


One possibility gaining ground is a proposal to increase the firepower


of the International Monetary Fund, something that would see Britain's


liability in the fund increase. Indeed, beefing up the IMF looks


like being the fig leaf G20 leaders will don before leaving Cannes.


Speaking this morning George Osborne, the Chancellor, said that


was something the British Government was pushing for. I think


we've got a day apart negotiating ahead of us here in Cannes. The


eurozone have to face up to their responsibilities and have to stand


behind their own currency. No one else can do that for them,


including Britain. Then the rest of the world, which includes Britain


but also China and Japan and the like, have to make sure that the


international economic system that is stable and well funded. And that


includes the IMF. That was George Osborne. The eurozone doesn't


really seem to know what it's doing. Can you imagine a bigger mess?


can. So far, this is what muddling through looks like. We haven't got


a complete disaster. Just disaster. Just disaster. There needs to be


degrees of disaster. That sounds like a good joke but distinguishing


between the euro falling completely apart, Greece in a very disorderly


way, not paying any of its debts. That may still happen. Yes, but


that's different from what we've got now, which is a test of whether


the Greek government can hold itself together. Be set up to a


shambles -- it's an utter shambles. There's no guarantee it could get


better, it could get worse. Trying to second-guess what the Greek


political a leader to wing is impossible because they don't even


know themselves. We don't know what's happening to the euro, the


impact on Britain, we don't know what's happening on the world


economy. One thing is certain, the eurosceptics on the Conservative


benches have already clocked that Britain, David Cameron, George


Osborne giving money to the IMF, rather than the European financial


stability fund. He is just using the middleman to possibly bail-out


the euro. The it's not just the Tory eurosceptics. Labour is not


keen on this either. They've stayed at arm's length from this. Ed Balls,


the shadow chancellor, has already said he thinks it should be the


European Central Bank which effectively is supposed to police


the euro, that should be putting forward the money and not the IMF.


No, he has said things which are very similar, not a world away from


George Osborne, of Britain needs to support the IMF, but being careful


about what commitments the IMF should make to Europe. I don't


think it does a lot of good to sit there and say it is all a shambles.


It could be worse. Anything could be worse. They could be a military


coup in Greece. It could be worse. Yes, but we haven't yet got a Greek


default. We haven't yet got a complete abandonment of the attempt


to patch it up. In Greece, they look at Argentina and what happened


to it when it defaulted, they are beginning to wonder if the best way


is to default now. If it only happened in Greece, that's fine.


But the contagion could spread across the entire eurozone. That is


the big point. Let's get the latest on the crisis in Athens from our


correspondent Mark Lowen. Let me ask you a couple of scenarios. If


Mr Papandreou loses the vote tonight, what then happens? Then


the government would collapse, Mr Papandreou would be forced to call


early elections. That is a strong possibility still because, as you


say, it is on a knife-edge. George Papandreou at the moment has a


parliamentary majority of just two. Yesterday, we had three of his MPs


threatening to vote against him in the vote of confidence, mainly


because of one reason. Because he called a referendum earlier in the


week on the latest debt deal for Greece negotiated in Brussels last


week. But within the last hour, the finance minister here as officially


said that he has spoken to his European colleagues to inform them


that the referendum has been scrapped. That will reassure these


three rebel MPs, it will probably persuade them to vote with George


Papandreou. One of them has told me she will vote but George Papandreou,


so he could still come through this by the skin of his teeth. If he


does, does he then proceed, does he go back to plan B and Desi attempt


to implement all the reforms and cuts that have to follow from the


bail-out of the Greek economy agreed on 27th October? What we


think would happen is this. That George Papandreou would get through


the confidence motion and would then, there are indications that he


may then tried to initiate proceedings to form a national


unity government involving his party, PASOK, and the main


opposition New democracy party. The opposite party say they want Mr


Papandreou to resign, they don't want him to be leader. They want


fresh elections. Presumably, any unity government would not have


George Papandreou at the helm. If another leader took over, there


would then be an attempt to vote through the bail-out deal agreed in


Brussels last week to implement the measures. That would be a caretaker


government until fresh elections were called. The big question now


was whether that caretaker government could steady the ship,


could prevent even more political instability year and could allow


Greece to ride through this storm and then received perhaps the next


instalment of its bail-out, 8 billion euros this country would


need by mid- December in order to avoid bankruptcy, and then continue


to try to ride out the financial Thank you very much. We are joined


Quite a lot of ground to cover here. Let me put this to you. Even if the


Greek bail-out now goes ahead, even if the government in Athens


attempts to implement it, I suggest to you it won't work. Yes, I agree.


I don't think it's going to work. That is why the situation is so bad.


Even if what was agreed in the so- called magnificent bail-out deal


last week by the EU, even if that is agreed it would work, it's not


enough. That's because the amount of debt that will be written off


for Greece is just not enough, they would still have far too much debt.


This would only therefore delay the crisis a bit. Secondly, because the


other linchpin of this bail-out plan, the bail-out fund, I think


that has run into a lot of trouble. It was meant to tap the Chinese to


increase its capacity, that doesn't seem to be working. I don't think


that the situation looks very good. At the same time, you have mounting


fears for Italy that are getting worse by the day. Let me come to


you on Italy. It is a much more serious problem and a much bigger


problem. Italian yields are now over 6%. At one stage this week


they were heading to 6.5 % because of fears of the Italian sovereign


debt situation. If they had 7% of his game over, is it not? If they


hit back and stay there for a few days it is probably going to cause


a really big crisis because of the structure of the financial system,


the fact that the exchange on which these bonds are effectively traded


would require more collateral on. These technical reasons would mean


it would precipitate quite a bad crisis. I really think that the


eurozone has to try and maintain this crisis in Greece. That is the


reason why I think there's been such a big psychological shift.


They are starting to realise it may be too late for Greece, regardless


of what happens tonight and tomorrow. It may be too late to


save Greece and keep Greece within the euro. Therefore, the only


chance of trying to avoid a much greater problem, a problem that


could engulf the whole of the global economy, is to cut graceless


and try and do something about Italy and Spain. The problem is


they don't really have a plan to stop the rot from spreading. We've


seen the business about the IMF been called in to start looking at


what's going on in Italy. That is not enough forced a new mentioned


the IMF, let me bring you to my third proposition. It looks like


the IMF is now becoming everybody's get out of jail card, it's what the


G20 will probably concentrate on in their communique today. At my


proposition to you is, is -- it is not the 5th Cavalry. It's not. What


is even more frustrating about this is a week ago the big get out of


jail card was this bail-out fund. Now that the IMF it. I'm pretty


sure that in a few weeks' time it is going to be the European Central


Bank again. The pressure will be bound to -- mountain on them again


to become the lender of last resort for these countries and start


printing money. The problem is they made it very clear yesterday they


don't want to do that, and the Germans are adamant this must not


happen. So I don't see a way out at the moment given the current


structures. It's easy to say, we are going to get the IMF involved


and all of our problems will go away. But we can see from the


history of the IMF that it doesn't really work that way. Does


denouncing you are increasing the firepower of the IMF, that doesn't


achieve anything. We've seen this time and time again over the last


few years. Grand announcements at G20 meetings and so one about the


so-called massive bail-out funds and firepower. In reality, it never


really resolve the crisis, it just delays it. And we're joined by


Sharon Bowles, Liberal Democrat MEP and Chair of the European


Parliament's Committee on Economic and Monetary Affairs. Going back to


Greece, you told us in July that Greece leaving the euro would be


bad for everybody. Do you still believe that? I think if Greece


leaves the euro and the EU, then the fall-out of that and the


contagion could still be very bad indeed. Unfortunately, since July


we have had on going rumbling contagion and some of the things


that men were unthinkable on now becoming more -- more thinkable,


partly as a consequence of action not being definitive enough forced


to has it become the case for both the the German Chancellor and the


French President in particular, that have increased leaving in a


messy way would be bad. Greece staying in is bad. We are in a very


difficult position. They are both bad. We are between a rock and a


hard place. It is quite difficult to workout which is the optimal.


You could have cut Greece lose ages ago, one thinks about it now and in


retrospect maybe that would have looked better. But there is a great


concern that if Greece believes the euro that the markets would just


think, OK, now we will hand on to the next one. Any kind of measure


like that would have to be accompanied by something that was


the action will binding close-up of the rest. But what we are seeing


here is a failure of European leadership. It's not just that


Greece was a problem. The 27th October deal was beginning to


unravel before the ink had dried. The bond markets have already


started to put up the price of Italian yields before Mr Papandreou


had a rush of blood to his head. If the Europeans came up with a shock


and all bail-out fund, a crew euro fund that would be big enough to


protect the countries that are in liquid - Spain and Italy - as


opposed to the countries that are just insolvent, i e bankrupt,


Greece. I largely agree with you. If you look at my past quotes, you


will discover I was there with two trillion at the beginning of the


year. Why can't they come up with that? I think if they come up with


something like that at the beginning of the year it would have


been easier. The problem now up trying to come up with two trillion


is it would potentially undermine the creditworthiness of the


guaranteeing countries, even France would be at risk. Realistically,


they couldn't go beyond what they've already put in without


there being a mechanism to do it, such as these leverage or guarantee


schemes. But they are a little bit fancy and they didn't bring out the


detail at the same time as the announcement. We are still waiting


Is it sustainable for Europe to continue the way it does when quite


clearly behind the scenes you've had the leaders of France and


Germany interfering directly in Greek domestic policies? They have


clearly been at the Finance Minister. They've been speaking to


the opposition. They have been behaving with powers. Some of the


things with Angela Merkel and Nicolas Sarkozy behind the scenes


that we don't like that much, and many of the eurozone member states


don't like it very much, when they don't know what's going on either.


However, I do agree that you had to put some pressure on to the Greek


political parties. If you look at Spain and Portugal, even though


they were having elections, their political parties got their act


together and worked together for stability. In Greece they weren't.


They were always... Sure. But you were part of this project. You were


the one that wanted the eurozone to be created, and wanted us to join


it. You are part of the club class Europe while the Greeks are wall on


the ground in austerity. I don't think that's the argument of the


moment. Give us an apology. Just a small one. I said I made the


mistake of not recognising how our financial market legislation would


undermine the fact that we should have had a bond market that


exercised discipline. Whilst you have zero risk waiting on sovereign


debt you don't get it. You were warned about that at the time but


we were told it wasn't an issue. It seems to me the struggle here is


that, even if Greece proceeds this, problem doesn't go away. The Greek


economy is now 15% smaller than it was three years ago. They are now


asked to take even more austerity. This will just rumble on and it's


the single biggest depressant on the growth of this economy and


other economies around the developed world. If it really gets


serious about Greece leaving the euro, commercial life stop there is,


because because people can't work out what stock they are dealing in


and what it might be worth. point is, there is no resolution of


this, even if the bail-out fund comes back on to the scene. It just


rumbles on and continues to depress any chance of getting growth into


the economy. Italy has to be the point. This is the economic flaw on


the your open. I was always attracted by the political concept


but believed wait and see, prepare and decide, because you haven't got


labour markets Mobility around Europe. You can't move from one


country to another to get a job without the language skills. You


don't get a transfer big enough that you would in Britain if that


country goes down the plan. Maybe Greece would be better in the


medium and long term with a default, with their own currency that can


fluctuate, because they are now locked into a currency that's


making them massively uneconomic. final question to you. The European


Union hasn't been able to do it, the eurozone hasn't been able to do


it, Angela Merkel and Nicolas Sarkozy haven't been able to do it.


Did you really think the IMF is your saviour here? I think the IMF


can play a useful part in this early intervention. I've always


been one of those that believed that the ECB has to be the eminence


grise at the end of the day. Where there is a will there is a way.


Thank you. As I'm sure you know, this week is


the first of the hunting season. Obviously I know, that because it


! Tally-ho! I hear you cry. And no wonder, because six years on from


the ban on hunting with hounds, the practice is alive and well. But are


the foxes? And if not, was it worth it? Adam Fleming caught up with the


man behind the ban. In 2001 Alun Michael was phoned by Tony Blair


with the job offer of Rural Affairs Minister, and the job of banning


fox-hunting. I said I take it you want me the get the legislation


through quickly. He hesitated and said that wasn't quite what I had


in mind. I thought you could search for a compromise. I was taken


abarks because opinions had become so embedded on both sides of the


issue, nobody had been allowed to be neutral, there was such a


passion. Passionate is one word you could


use to describe the argument that followed. Culminating in this


protest outside Parliament by the Countryside Alliance, who claimed


the Government was attacking individual liberty and beating up


on the rural economy. It was very nasty. There was some very violent


people involved in the demonstration. I think the main


problem was that the Metropolitan Police had been given to believe


that these were nice people who were coming up just to exercise


their democratic rights without using violence. And on the day that


wasn't the case. Inside, just as much drama. Five protesters broke


into the chamber, the first non- parliamentarians since the days of


Charles I. It happened as hall lan Michael debated with his shadow.


James Grey was just about to let them through into the open space.


They seemed at a loss as to what to do with it. One stood in front of


me and said, "You, hunting, pension, it's all gone wrong." Sorry, could


you say that again? Also gone was the proposal for a tribunal to


licence individual hunts, replaced with an outright ban. The Bill


ping-ponged fruitlessly between the Commons and the Lords until the


then speaker forced it through using the Parliament Act. THE


SPEAKER: Very to tell the House that I have certified the Hunting


Bill under section 2 of the Parliament Act 1911. So from


February 2005 the hounds have chased fake trails laid by hands.


Some say it is a law often breached. I think over a longer time than my


original tribunal the legislation will have its way and this will be


something consigned to the darker days of our history. I'm not sure


his old boss Tony Blair would toast that. In his memoirs he says he


would have had less trouble if he had proposed euthanasia of


pensioners. Joining us now from Carmarthen is


the Conservative MP, Simon Hart, who used to be the chief executive


of the Countryside Alliance during the fox-hunting wars. Is it fair to


say that the hunts still continue? And that the foxes sometimes still


get caught? Since those days I think there've been 100,000 days'


hunting and it is all pretty confusing. Thing package


highlighted that. I think everybody's attempting to remain


within the law, confusing though it is. Sure enough, I don't think it


always works as well as it should. Is everyone attempting to stay


within the law? I think they are doing their best in the


circumstances but it's not easy. The police say it is very hard to


get evidence to prosecute. The dogs do pick up the scent. It is hard


then to stop them. It is pretty hard to know whether people really


are abiding by the law or are just getting round it? I don't think it


is just the police. The judiciary and the public are saying that it


is complicated and the people doing the hunting. It is a unique law in


that it has managed to upset and disappoint everybody who is


involved, whichever side of the ooct. David Cameron offered a free


vote to restore funding. I think it was a part of the Tory election


appeal. Do you think, do you feel let down he hasn't done that?


Should he do it? It is part of the coalition manifesto, and the


coalition... Why hasn't he done it? We've only been in office 16 months.


Everybody realises there are slightly more pressing concerns at


the moment. This is not exactly something that would be top of the


list of priorities. The PM has been clear, lit happen in the lifetime


of this Parliament, I have no doubt. This is not a satisfactory


situation for anybody, so let's sort it out, this time once and for


all. Do we need to go back on this and have another vote? There this


is an argument for tighten up the law. I remember him predicting the


end of rural life as we know it. That hasn't happened. How did you


know? When were you last in the country? I go there all the time.


You fly over it! I don't own any. Does David Cameron really want to


spend time on having MPs vote on setting dogs on deer and hares?


you have a vote on this? It is not pressing, but I'm a liberal on


these things. You have to set the bar high. I don't like fox-hunting


but I didn't like the legislation. It was a shambles. Let me go back


to our MP here. If you had a vote in the House on this you would


almost certainly lose it wouldn't you? I think there would be a small


majority. It is tight. The numbers are in the too bad. There are fewer


Conservatives who are against hunting than there were back then.


This is nothing to do with your outgoing Defence Secretary? He was


a bit of a blue fox. There are fewer now than there were in 1993.


Fewer foxes or MPs? Fewer Conservative MPs against hunting.


The argument is no longer really about the individual practice but


whether this is good law, whether it is appropriate, whether it works.


The coalition agreement says it, the Prime Minister says it,


everybody realises we are in a really unsatisfactory state of


affairs. Let's sort it out. Are you off fox-hunting this weekend?


I can't get time off from the whips. I didn't know they controlled your


weekend, but at least it will be a good weekend for the foxes.


Coming out of Cannes it looks like there is no real agreement on what


size the new IMF fund should be. They haven't been able to agree on


the scale of the increase. Time now to look back over the week


gone by. There's been a lot of Europe. This is the week in 60


It was all eyons Europe as Greek PM George Papandreou caused financial


shock waves on Monday with his plan for a referendum on the eurozone


bail-out. The chaos in Athens dominated G20 discussions in Cannes,


as France and Germany gave the Greeks a stark option, take it or


leave the euro. No wonder Mr Papandreou dropped his referendum


plan. Back at home, GDP figures were slightly better than.Ed. David


Cameron promised tough action on councils that fail to place


children for adoption quickly enough. The current situation isn't


working Work. And the protest outside St Paul's continued this


week. The Dean became the second clear Tokyo leave.


The offer over public sector pensions wasn't enough to convince


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