13/12/2011 Daily Politics


13/12/2011

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Afternoon, folks. Welcome to the Daily Politics. Our high streets

:00:23.:00:26.

are in crisis - that's the verdict of the government's retail tsar,

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Mary Portas. So what can be done to regenerate them?

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After last week's deal, are European politicians any closer to

:00:35.:00:45.
:00:45.:00:47.

discovering the elusive solution to the euro-zone debt crisis?

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France blackballed Britain from the Common Market.

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Do you get a sense of deja-vu? After Britain wields its opt-out,

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President Sarkozy says there are now "two Europes" - it is the

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latest cross-Channel spat that has lasted - well, centuries.

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And do shrikes leave strikers any All that in the next half-hour.

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With us for the whole programme today is the general secretary of

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the PCS union, Mark Serwotka. And no Andrew this afternoon. He

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decided his presence next to me in the studio today would be a

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distraction. But don't worry, a bit like Nick Clegg, we are hoping he

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will pop up a bit later on to explain himself.

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First this morning, our high streets are in crisis. That's the

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conclusion of a report for the Government by the so-called Queen

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of shops, Mary Portas. She says many high streets will be lost

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unless councils and shops work together to regenerate them.

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Whereas the high street was always just about shopping, that shopping

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has shifted into new areas. We have the internet, we have these out-of-

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town malls, the hypermarkets and supermarkets. We have not redefined

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what the high street is. We have let it go and neglected it. We have

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not had a vision. I propose that we look at a high street in a

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different way, as a multi- functional social and shopping High

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Street, so that we create ft fall back on the high street for other

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uses other than shopping. Mark Serwotka Hamas -- how important is

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the high street? Is important not just to the high street, but to the

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communities we live in. But the first thing to do is make sure

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people have money to spend it in shops anyway. Part of the problem

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at the moment is that many are having a cut in their living

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standards. And therefore, there is not much disposable income to spend.

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It does not help when in many communities, the Government is

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withdrawing from high streets. We have seen Jobcentres closing or

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licensing offices. 39 of those are closing. It is about jobs, I take

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your point about consumer spending and people needing money in their

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pockets. But in terms of getting to the shops, should the Government

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focus attention on the retail sector at this time of year? It has

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to do what it can to regenerate our economy. What support can be found

:03:19.:03:24.

for small businesses and shops, we have to find it. But at the end of

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these -- at the end of the day, for these businesses to be a success,

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they need people coming through the door with money to spend. That is

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the real issue at the moment. We need to create jobs, create demand

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in the economy and make sure people can spend. That is the best way to

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regenerate the high street. Now, we are expecting a crucial

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press conference in Europe this afternoon. After all-night sessions

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and passionate disagreements over the details, scientists at the

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Large Hadron Collider in CERN are expected to announce the answer to

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life, the universe and everything - the discovery of the famed Higgs

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boson particle. Unfortunately, despite claims that the euro-zone

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debt crisis had been solved after press conferences in Brussels last

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week, doubts are beginning to surface. While particle physics has

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relatively few unknowns, economics, especially that of the euro-zone,

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seems to be a far more inexact science. European politicians have

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spent months rushing around in a circular motion, colliding with

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each other in the hunt for the Holy Grail of euro salvation. The latest

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experiment involves a new fiscal compact, with new rules as

:04:24.:04:29.

immutable as Newton's Third Law of motion. This new compact will be

:04:29.:04:32.

combined with an application of physical force - a 200 billion euro

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bail-out fund provided by national central banks via the IMF to prop

:04:35.:04:42.

up countries at risk of default. But at the moment, this is more

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theoretical than the Higgs boson, with only the German Bundesbank

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pledging EUR45 billion. And that sum is a mere fraction of the

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galactic 600 billion that would be needed to bail out both Italy and

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Spain. But the markets continue to exert their own inevitable logic,

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with bond yields in those Club Med countries creeping up again and the

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euro sliding against the dollar and the pound. So can Europe's leaders

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finally re-write the laws of economics and save the euro and

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avoid a catastrophic big bang? Andrew's at the European Parliament

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in Strasbourg, from where he joins me now. It sounds like this deal

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:05:34.:05:36.

that has been put on the table is unravelling? Yes, it is. We have

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already had a minister in France, the man the polls say will be the

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next President, saying he wants to renegotiate the deal agreed last

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week. The Austrian Chancellor does not like it. The president of the

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German parliament does not like it, and thinks it may be

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unconstitutional. The ratings agencies are talking about

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downgrading every European Union credit ratings. So the sense that

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the deal that was done last week has anything to do with the current

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sovereign debt crisis, they are far apart and it is beginning to

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unravel. The Americans have also made it clear that they will not

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put any more money into the IMF. A source in President Obama's White

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House said to me, if you think the president is going to Congress to

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get money for the Europeans in an election year, you must be on

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another planet. Be if no one is going to put more money in and

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everyone says it is not enough at the moment, not the big bazooka

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that is needed in terms of bailing out a country as big as Spain and

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Italy, where do they go from here? They go to another crisis. Word

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reached me from Berlin today that the Chancellor is even talking

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about another summit before Christmas. We have already had six

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this year. If not, there will be one early in the new year. While

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they talk about all sorts of things to do with fiscal union and 3%

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budgets and balanced budgets and so on, the markets are having their

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way. The Spanish and Italian bond yields are under pressure again,

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the euro is at a recent low against the dollar, and there is no

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firewall, as the Austrian Chancellor said. There is no

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firewall big enough to protect Spain or Italy at the moment. Last

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week's European summit did nothing to put one in place.

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I am joined now by the former Foreign Secretary Jack Straw and

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from Paris by Jacques Myard, an assembly member in President

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Sarkozy's party. Jacques Myard, talking to our colleagues in

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Strasbourg, it does sound like the deal that was done will not happen.

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Is that your sense as well? It is not that the deal will not happen,

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the question is how the deal can solve the problem. Frankly, I have

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great doubts that we will find a solution to save the Eurozone. We

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are going to put the Eurozone in a straitjacket by controlling and

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cutting expenses. But that is not the solution. The solution is a

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lack of competitiveness of some members of the Eurozone, like

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Greece, Spain and even France. We are facing a wall, which is that

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this Eurozone is absolutely inadequate for the strengths of our

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economies. So what is needed to happen? If you say this is not

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going to be enough to stem the Eurozone crisis, you are talking

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about competitiveness, what do these countries need to do?

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short-term needs, if there is no militarisation of the debts, that

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means genuine aid coming from the central bank to those states, they

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will pay their debts more expensive live. In the long term, we have to

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think, is this single currency adequate for our economies? Of

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course, I have always been reluctant towards the euro. I think

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we have reached the end of it. We have to face the reality. I am

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sorry to say that in many terms, the French political classes and

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European political classes are in a kind of religious belief, saying

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that the euro is Europe, and there is no future apart from that, which

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is wrong. We need to face reality. Listening to that, Jack Straw, no

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one thinks it is enough. No one thinks it will work. The Eurozone

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crisis is going to lurch on, isn't it? Running a single currency

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outside a single country is inherently difficult, and that is

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one reason why I was never in favour of it, but that is what many

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countries opted for. If you are going to do that, you have to have,

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as George Osborne has acknowledged, a fiscal union, which was at the

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heart of the agreement formed last week. That is a necessary part of

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salvation, but by no means a sufficient part. As you and this

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gentlemen have just said, if you want to solve the immediate crisis,

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you have to monitor as centrally the debt of Europe. That is

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something Chancellor Merkel will not do. No, and without it, the

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Eurozone cannot move on. I think it will move on with great difficulty.

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It surprises me that the German Chancellor, although she has

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problems in her own backyard like every other head of a Government,

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she does not acknowledge and lead her people to say, we are the

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people who have month -- most benefited from the euro. Why can't

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we now assist in keeping the euro together? Jacques Myard, do you

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agree with Jack Straw that the Germans have to make the central

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bank come up with the goods now and without it, this crisis will get

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work? I have always said we need to monitor rise the debts. That means

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we need strong help from the central bank. The treaty forbids

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that. But this can only work if you transfer money from the strong to

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the weak countries. And Germany knows that if they do that, they

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will have to pay up to 4% of their gross national product in transfers

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to Italy and Spain etc, which is more expensive than the

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reunification of eastern Germany and western Germany. Even in France,

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Mr Sarkozy is now looking at the prospect of downgrading from the

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credit ratings in France. But the French economy is not strong either.

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You can't expect it also to come up with that kind of money, because it

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itself is vulnerable. Yes. A downgrading of France is not so

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awful, because I think all countries will be downgraded. The

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only point is that our -- it will be more expensive for France to

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borrow. So I think we have to change monetary policy. As Mr Straw

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just said, we need to monitor as that. If we do that in the short

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term, we will be facing a wall and it will be more expensive and it

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will be the end. Jack Straw, is it the case that Britain's position

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outside not only the 17, but the 26, if we were at that table, would we

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be able to influence more to persuade the Germans to let the

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central bank by government bonds and let them rescue the Eurozone in

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a way that we can't now? Yes. If you read the conclusions of the

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European Council last Thursday and Friday, you will see that a number

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of countries in the EU -- in the EU but outside the Eurozone said they

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reserved their position. David Cameron could have done that. He

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could have completely preserved all his negotiating position. He was

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not signing up to anything formal, but he would have been in the room.

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His difficulty and now the country's difficulty is that

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gratuitously, he has lost influence. Would it have made a difference?

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course. I have seen these negotiations. It is a fact of life

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that heads of government have very large egos. Tell us something we

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don't know! It is about national interest, but it is also about

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their interest. This matters, because these guys are very

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powerful. John Major understood that how you deal with it makes a

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reunification. The result was that when he needed something,

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Chancellor Kohl said to him, what can I deliver for you? In this

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situation, we need a resolution to the euro crisis. Schadenfreude is

:14:32.:14:42.
:14:42.:14:44.

not a policy. Our future depends on Of course, the British did not sign

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up to the agreement in Brussels last week. Nicolas Sarkozy rejected

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outright Britain's demands for an opt-out on City regulation, which

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he said was not acceptable. He added that there are a now clearly

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two Europes. Is this just another salvo in the centuries long tiff

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with our neighbours? Let's start in the 17th century, when this French

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bishop is one of the first to be recorded using the phrase,

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perfidious Albion. In other words, cheating Brits. Fast forward to the

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1960s, the news reels were fretting about vetoes then, too. Charles de

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Gaulle had denied Britain's application to join the group which

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was to become the EU. We finally got membership in the 1970s. Then,

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along came this lady, in a fetching jumper. They will be keeping an

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all-night vigil under the statue of Winston Churchill, the first person

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to have the great vision for working together for peace in

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Europe. Instead, war was waged by the Sun against the French man in

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charge of the European Commission in the 1990s. His request for more

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powers begat this famous soundbite. No, no, no! Tony Blair's language

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was warmer, but the relationship was spoiled by the French banning

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this, British beef, and disagreeing with this, the Iraq war. Now, the

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theory is that the French are trying to pinch business from the

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City. President Sarkozy, normally famously shy about speaking English,

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knows that money talks, as demonstrated by this clip from a

:16:35.:16:45.
:16:45.:16:46.

few years ago. You are welcome to invest in France. We will be happy

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to help you make money in France. And of course, to make some money

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with you - for us. There we go. And the two Jacks and Mark Serwotka are

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still with me. Is the entente cordiale dead in the water? It is

:17:08.:17:12.

not dead in the water, it is damaged. Don't forget they were our

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great allies in the First World War, and they are then faced German

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occupation in the Second World War. We are two similar-sized countries,

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both on the Security council, have remarkably parallel although

:17:27.:17:31.

different histories, very proud of our nations, but we need each other.

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My experience of dealing with the French, sometimes they could drive

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me mad, but I daresay I could drive them mad. But you could co-operate

:17:40.:17:45.

with them. As far as the current commissioner is now concerned, the

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commissioner on business regulation, I had a lot to do with him. He was

:17:48.:17:52.

the French Foreign Minister. He's French, I'm British, but this guy

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is not gratuitously going to damage European businesses. You can get

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alongside these people. I'm not naive at all. But I do not believe

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you need to damage diplomatic relations in the way that we have

:18:07.:18:14.

done, as David Cameron has done. Jacques Myard, Nicolas Sarkozy

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accused David Cameron of shouting from the sidelines about the

:18:17.:18:20.

eurozone crisis - is the relationship damage in that way, as

:18:20.:18:25.

we have just heard from Jack Straw, or is it all politics? I do not

:18:25.:18:29.

agree with Jack Straw. Our relationship, our diplomatic

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relationships, are much stronger than these last events. I tell you

:18:35.:18:40.

this morning, the French are more interested in Jonny Wilkinson's

:18:40.:18:44.

decision to retire than David Cameron and any comment like that.

:18:44.:18:50.

So, don't worry. No, in fact, in the view of Sarkozy, there are two

:18:50.:18:55.

kinds of Europe. There is the euro Europe, that he is trying to save

:18:55.:19:00.

with Germany, and there are other relations, especially in terms of

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defence, and world powers, which we do with Great Britain. We signed a

:19:05.:19:10.

treaty in the last few months on Nuclear Corporation, and this is

:19:10.:19:18.

very important. This has all been a bit of a sideshow, Mark Serwotka,

:19:18.:19:21.

saving the eurozone from its crisis is the most important issue, not

:19:21.:19:24.

this treaty - how do you see the relationship between Britain and

:19:24.:19:29.

France, is it important as far as the unions are concerned? My only

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beef with the French is that they beat Wales in the Rugby World Cup,

:19:33.:19:37.

with a very unjust outcome. The European trade unions, in France,

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Britain, Germany and Greece, have issued a statement in the last 24

:19:42.:19:46.

hours. What we say is, the people who are suffering in Europe are

:19:46.:19:49.

working people - people losing their jobs, having their incomes

:19:49.:19:55.

cut, their pensions slashed. None of what has happened over the last

:19:55.:19:58.

few days, it seems to me, has really been about addressing the

:19:58.:20:02.

needs of working people. They're trying to save these countries from

:20:02.:20:07.

a debt crisis. They say they are. But the view that we have is that

:20:07.:20:11.

it is the wrong answer to the problem. We need to grow our

:20:11.:20:15.

economies, and we want to grow our economies and deal with the deficit

:20:15.:20:20.

over the longer term. What we want to do is open the debate up and say,

:20:20.:20:24.

why aren't any of these European leaders talking about the role of

:20:24.:20:28.

the markets, the fact that the markets are unaccountable, are now

:20:28.:20:32.

picking governments in parts of Europe, setting social policy,

:20:32.:20:35.

effectively? We know that the markets do not care about the

:20:35.:20:39.

welfare state and the NHS, like we do. So we need a more fundamental

:20:39.:20:47.

discussion, not fiddling while Rome burns. A couple of weeks ago,

:20:47.:20:51.

members of Mark Serwotka's union, the PCS, were striking over the

:20:51.:20:55.

Government's proposed pension reforms. A fierce battle has raged

:20:55.:20:58.

over whether public sector workers were right to go on strike. But

:20:58.:21:02.

there is another issue. Our strikes in general effective means of

:21:02.:21:08.

getting your own way? Here's Giles. It is a fact of modern industrial

:21:08.:21:11.

relations that both unions and managers have started to see the

:21:11.:21:15.

strike as something of a last resort. Unions have discovered more

:21:15.:21:19.

sophisticated ways of industrial action, short of a strike, and

:21:19.:21:22.

private sector managers have discovered the economic value of

:21:22.:21:27.

compromise. So, is it time to ask the question, what do strikes

:21:27.:21:32.

achieve? The range of outcomes and his wide, from the success of women

:21:32.:21:36.

workers at Ford's Dagenham, whose strike led to laws on equal pay, to

:21:36.:21:41.

the failure of the miners to keep pits open. Most end with compromise,

:21:41.:21:47.

or compromise comes first. Bylaw, disputes are more specific, strikes

:21:47.:21:51.

are harder to call. There is more concession bargaining, less big

:21:51.:21:59.

causes. We deal with about 900 disputes per year. When I went to

:21:59.:22:05.

work for ACAS in 1976, we were dealing with 7,500. The threat of

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strikes is very often effective, and that is one of the more recent

:22:08.:22:12.

developments, with changes in the law requiring unions to ballot

:22:12.:22:16.

their members. They can then say, we have balloted our members, and

:22:16.:22:20.

they are willing to come out on strike, now, what more have you got

:22:20.:22:25.

to offer? Clearly, in the recent pensions dispute, things have come

:22:25.:22:31.

to a head. Militants, itching for a fight. They want families to be

:22:31.:22:35.

inconvenienced. We are not itching for a fight. But we do need

:22:35.:22:39.

ministers who want to reach an agreement with us. Despite the

:22:39.:22:42.

disappointment of the party opposite, it looks like something

:22:42.:22:47.

of a damp squib... But from experience of conciliator in many

:22:47.:22:51.

disputes, it may seem like two sides are at war, but it can be

:22:51.:22:53.

very different behind the scenes. The difference between the

:22:54.:22:58.

collective dispute, trade union and employer, and an individual dispute,

:22:58.:23:02.

is that in the collective dispute, the union and the employer have got

:23:02.:23:08.

to cope with tomorrow. Whereas genuinely, with an individual, the

:23:08.:23:12.

relationship is ended. So, there is much more of a meeting of minds

:23:12.:23:16.

than perhaps the public rhetoric would suggest. Increasingly, old

:23:16.:23:19.

unions have taken a lead on new tricks, with more sophisticated

:23:19.:23:25.

options, short of strikes. strike is a nuclear option. It will

:23:25.:23:28.

only do that if there is really nothing else that can be done. It

:23:28.:23:33.

is expensive, it is difficult, quite often unpopular, and unions

:23:33.:23:37.

use strikes as a last resort. I cannot think of any union which

:23:37.:23:40.

would simply go on strike for the sake of it. The strike in itself is

:23:40.:23:44.

not a principle, it is a tactic. There are does politically who will

:23:44.:23:49.

say strikes achieve nothing whatsoever. But there is one

:23:49.:23:53.

undeniable answer to that. You're never going to know what would have

:23:53.:23:57.

happened had there not been a strike, you're trying to measure

:23:57.:24:00.

something which is unmeasurable. If there had not been a strike, what

:24:00.:24:05.

the employer have offered more? You do not know. Mark Serwotka is still

:24:05.:24:10.

here, and we're also joined by the Conservative MP Dominic Raab. Mark,

:24:10.:24:14.

can you give any recent examples of where a strike has had a positive

:24:14.:24:19.

effect? In the last few months, PCS, employed in a private sector

:24:19.:24:23.

company, a multinational company, offered a derisory pay rise, went

:24:23.:24:27.

on strike and it ended up getting an 11% pay increase for the lowest-

:24:28.:24:32.

paid. Very interesting, because what it said is that if industrial

:24:32.:24:36.

action in the private sector is going to make a company realise its

:24:36.:24:41.

profits may be effective, they will come round the negotiating table.

:24:41.:24:43.

What do you say to that? private sector it rather different,

:24:43.:24:47.

you have got far less strike days lost in the private sector, the

:24:47.:24:51.

whole dynamic is very different. The whole issue with effectiveness

:24:51.:24:56.

is that if your aim is to cause damage, a strike will do that. We

:24:56.:24:59.

saw in the most recent strikes damage done to parents with schools

:24:59.:25:04.

closing. If your aim is to carry public opinion, I think they have

:25:04.:25:09.

failed. If you look back Mark's union, just one in five of his own

:25:09.:25:15.

members backed the strike, which is why, if I'm a finish, you seek

:25:15.:25:19.

instantly suddenly consistently from June to November, the polls

:25:19.:25:27.

are showing that they had lost the support of the public. Strike

:25:27.:25:31.

ballots only need a majority of those who take part, not a majority

:25:31.:25:35.

of those eligible to vote, and that is a real problem with the public,

:25:35.:25:40.

is it not? You're talking about far smaller numbers than the unions try

:25:40.:25:44.

to paint. I disagree. You cannot disagree that it is with the

:25:44.:25:48.

majority who take part. If we start talking about thresholds, we would

:25:48.:25:52.

not have Boris Johnson in his current post. It is an unnecessary

:25:52.:25:56.

hurdle. We have the most restrictive union laws in any

:25:56.:26:00.

Western European country. It is fantastically difficult. I have

:26:00.:26:03.

said to the government, and I will say it again now, if they want

:26:03.:26:07.

bigger turnout in ballots, we have made numerous suggestions to make

:26:07.:26:11.

it easier to vote, telephone, online, in the workplace - they do

:26:11.:26:15.

not want to know. Do you think that would make a difference? Of course

:26:16.:26:22.

it would. The public will not thing strikes are credible if you have

:26:22.:26:30.

such low numbers voting... I think actually, in all strikes, the

:26:30.:26:36.

times bigger than those who actually cast the vote. The turnout

:26:36.:26:41.

which matters is on the day. In the strike we have just seen, two

:26:41.:26:45.

million people on strike to stop a raid on their pensions, it was one

:26:45.:26:48.

of the most effective demonstrations of opposition to the

:26:48.:26:51.

Government which we have seen in recent years. Except, the

:26:51.:26:54.

Government make concessions on the threat of strike, not the strike

:26:54.:27:00.

itself. Since then, there has been nothing. Actually, it was the

:27:00.:27:04.

tiniest concession. I have just come from the TUC this morning, and

:27:04.:27:07.

we have started discussing further industrial action. The reason for

:27:08.:27:10.

that is to get the Government around the negotiating table. They

:27:10.:27:14.

have not met us since the 2nd November. We want a negotiated

:27:14.:27:18.

settlement, but if they are not even in the room, it becomes

:27:18.:27:24.

impossible. What do you say to that, Dominic? Will this mean the

:27:24.:27:27.

Government will feel it has to make another concession? Well, they have

:27:27.:27:32.

already made a massive concession. If you're a carpenter, a cabbie or

:27:32.:27:35.

a hairdresser, you will be looking at the reformed pensions which

:27:35.:27:43.

public sector workers will be getting, and it is way out of the

:27:43.:27:46.

League of what the vast majority, the hard-working majority in this

:27:46.:27:51.

country, will be able to access. I think if we have a further threat

:27:51.:27:55.

of strikes, you will see more ebbing of public opinion, and I

:27:55.:28:00.

think the unions have lost it. The real question is this - the

:28:00.:28:03.

government is out of touch with ordinary, hard-working people. I

:28:03.:28:06.

think it is the militant minority of hardline union leaders, who have

:28:06.:28:14.

not accepted a cracking offer on the table, though, with their

:28:14.:28:18.

inflation -- inflated salaries and pensions, are looking increasingly

:28:18.:28:22.

out of touch themselves. I think you should not be able to have

:28:22.:28:25.

hundreds of people paralysing the infrastructure in London, which

:28:25.:28:30.

disrupts millions, on the votes of a few hundred people. If ever there

:28:30.:28:33.

was confirmation of a government being out of touch, it used to

:28:33.:28:39.

describe as a cracking offer, work eight years longer, pay thousands

:28:39.:28:43.

of pounds more in, it is robbery. But equality of misery is not a

:28:43.:28:49.

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