29/10/2011 Dateline London

has said it will lock out its employees until they agreed to a

deal. Welcome to date line -- Dateline

London. Kings and queens - women's rights in the British royal

family.... Good to see you all. One trillion euro, plans for closer

eurozone unions, has this summit in Brussels saved the eurozone? Is the

worst over? Where does this leave Britain? Has encouraged the

markets? Briefly. It hasn't resolve the central contradiction which is

that it is perfectly appropriate for a democratically elected

governments to put their own electorates first. The political

imperatives for Germany, Greece and all the other countries that are in

trouble in the European Union is to put the political considerations,

being loyal to their own constituents' interests first. That

is not consistent with the kind of coercion and the policing of

budgets. We have lost the basic democratic principle here, which a

lot of people seem not to have noticed. A budget of individual

European countries will have to be submissive to the European Union

before they are submitted to parliament for policing and

inspection. That means that, as a voter, you do not have direct

control over your Parliament's budget. You could also say that it

exposes all of the philosophical divides between the French and the

Germans.... Germany has a very strong historical prohibition on

printing money. They have memories of the Weimar Republic. Quantative

easing from Germany would be a temporary solution to the bail-out

problem. Instead, we are going to the Chinese. A totalitarian country

will be funding the democracies of Europe, which have sold out on

their basic principles. If you are not voting on fiscal policy in your

own government, what are you voting for? You could also say that the

Chinese are backing an American democracy in a different way.

Before we get into the philosophical connotations of what

is going on, I think, fundamentally, the markets did not rally for that

long. It was very short-term. The Italian debt bonds... As somebody

who works in financial markets, it was incredible to see how short

lived the euphoria was. There tends to be some momentum with good

feeling and confidence in the market. I suppose there was some

some immediate relief. The moment the cold light of day struck...

Berlusconi is still the leader of Italy. Yes.

(LAUGHTER). It hasn't filled people with

confidence. Greece has defaulted on half of its debt. The markets took

a good look at that and thought - now, wait a minute. There is a

degree of economic reality. There is a degree of economic reality.

Part of that economic reality is that the other formative experience

of Germany. What happens if there is no union? This is what

Chancellor Angela Merkel was alluding to. I'm sure it reads more

forceful than she is capable of delivering. She said - do not

presume to think they will be another 50 years of peace in Europe

at this whole thing falls apart. That is something that they worry

about. And they are right. There are two things about the whole

situation. There is a Government's problem in Italy, which is one of

the reasons that I know the market rally was short lived. --

governance. This is the way the EU works. There is a real crisis of

government in the country that is poised to bring the whole thing

down - that is Italy. Silvio Berlusconi is reported as saying he

will resign in January. Who will replace him? This is a frying-pan

and fire dilemma. I rely very heavily on reporting over the last

month - a report that came out over the summer, what with the cost of

dismantling the Euro be? It is even more dangerous to contemplate

blowing the thing apart than it is... It has to be a managed

disassembly. Not blowing it apart. Would you volunteer to be on the

disassembly committee? There is no good news. We have bought six

months at best. The whole deal is dependent on a lot of conditions

that need to be met. The bail-out fund - there is no money there yet.

Going to China and India... What will be the consequences? Then

there is the economic policy - will austerity deliver economic growth

on which the success of the euro depends? The opposite is true.

Austerity is leading to recession. The budget deficits are getting

bigger. That is the situation in Greece and the United Kingdom.

There is no growth pushing the eurozone... Let me find one or two

and -- one or two bits of good news. Why should the Spanish and the

Portuguese be entitled to have their debt written off? Angela

Merkel's warning - there is just as much danger of creating

international hostility in Europe by closing people into closer and

closer will fiscal union - I have never heard more anti-German

feeling, even among moderate Greek politicians. The hostility that is

developing. When people discover that their own democratic

institutions have been rendered irrelevant, they take to the

streets. You saw in the modern state of Yugoslavia when you come

worse individual nations into a federation they are not comfortable

with. It can end in wa end in waif there is protection and every

nation can protect itself... That is not the only alternative. I am

not saying it is. There is potential for even more conflict if

the European Union is dismantled. There is always potential for

conflict, but there is no reason why they couldn't be a free trade

area without fiscal and political unions, which is what a lot of us

wanted in the first place. That brings us back onto where Britain

stands on this, if Britain stands anywhere. We are all affected by it.

There is also the debate within the Conservative Party as to whether

they should be a referendum. would have thought, tactically,

that they might have waited and enjoyed the sensation of sour

grapes - it is a very logical position... The first time you hit

a trough, there will be problems. That is what has happened. I think

this is so localised within the Conservative Party. I barely

reported on it because it didn't seem to... 70% of people say they

want a referendum! And 90% of people want to bring back hanging.

(LAUGHTER). It is mainstream. You work in the

media and you know that if it was for real, if there was a real

referendum being held and a real question that had been properly put

together, put to the people, it would not quite be the same numbers.

There were three options - one of them was renegotiating our position.

That is what most people would vote for. This is the reality, you are

either in or out. Britain will be losing out. This is what every

Euro-sceptic and MP and politician knows. This is what David Cameron

knows. The British economy will suffer, Britain will suffer. This

is what they all know. They know that Britain can't move away.

not sure how much of a voting issue this is. I think the timing was off

and I thought David Cameron looked pa pa be honest, and a bit

hoisted by his own petard, because he has been cosying up to the Euro-

sceptics. Now it has all come back home to roost. He has got the Lib

Dems, the most pro-euro party in the UK, then he has Nick Clegg who

referred to them as a group of NT's the mites, nutters, climate change

semi its and home of are. I don't think this will filter down.

think the fact that it will not filter down to the voting public is

the essence of the problem. There this relentless progression towards

ever-closer union. That is what people are so angry about. I am

so som the odd one out here, but the Euro-sceptics have won back

his argument. Every prediction they have made abve made ab 10 ability

of this position have come true. -- instability of this position. The

mechanics of parliamentary life - it is not always possible to time

your intervention to win it would be optimal. The point is that they

knew it was a purely rhetorical registering of their argument. My

goodness, it had resonance with the public. It got enormous amounts of

public attention and forced to this debate about Britain's role in

Europe. -- forced this. David Cameron looks undermined. Britain

does not want to fully participate in the European project, but it

also wants to lead. Well, you can't have your cake and eat it.

Newspapers are full of articles - David Cameron was having dinner

with the Polish, the Swedish, Danish, while the Italians, the

German and the French were somewhere else. The big guys were

in another room and David Cameron was with the little ones. Why would

They met at 4pm, at 4:30pm the meeting started. It was quite

prompt by EU standards. The real deals were made among the 17. Fate

might have an impact on David Cameron's political position. -- it

might. What I'm talking about, being in the room when the real

decisions were made. It is entirely possible that one year from now,

two years from now, there will be a two track Europe. That is possible.

Being in the room is the last place you want to be in, especially that

room. Tunisia, the Arab Spring began, this week they went to the

polls to vote for a new government. Are there lessons for other Arab

countries? Absolutely. It has been incredibly inspiring to watch

Tunisia over the past 12 months. Over the past two weeks it has been

really moving for Arabs to watch. 90% turnout of registered voters.

The second thing is, the number of women on the ballot box. Women

voting and women up for re-election. Remarkably, even though this has

been a police state for the better part of three decades, very little

disturbance. There was the Sevens in one town. -- disturbance. Yes,

in one town where Mahmood -- Mohamed Bouazizi. The martyr of

that town. We have an Islamic party in charge of the state. They have

managed to negotiate and keep secular laws that were negotiated

before the election. Fingers crossed? Absolutely. This is a

perfect demonstration of why it was necessary for Western countries to

be on the right side of history. The countries entering the modern

world. It would have been outrageous for Western countries to

appeared ambivalent about these revolutions. It is understandable

why they -- there should be fears about security of Israel and

Western interests. But democracy has to be the answer to that.

Democratic freedoms have to be the answers to those problems. It has

been a good week for the Arab world, therefore it has been a good week

for the rest of the world. Absolutely. Very inspiring. Not

only did the elections go very well, they had an election on the

constitution, there will be new elections. Everything is going in a

very thoughtful way. If we can extrapolate from the situation in

Tunisia to Libya, or Syria. I think it is asking a bit too much. We are

talking about very different countries. Libya will might have to

renegotiate with the old guard. We hear very worrying noises in Libya

that the leader of the transitional council would like to re-establish

Sharia law and polygamy. These are very worrying signs coming from

Libya. In Egypt there are going to be elections later in November. In

the past months the news has been very dire. The military is

controlling all of the opposition parties. There is no guarantee it

is going to be a real democracy. The nature of this whole year has

been to show that the theory of an Arabist and has been a bit of a

sham. -- Pan-Arabism. We have to be a little worried about each

individual country as they progress. What I was thinking about, I

thought we were going to talk about, what I hope for the West, the

election of an Islamist government in Tunisia opens up a sense of

dialogue of what we mean by... It gets thrown around a lot.

Particularly among policy makers on the right in Washington. You have

an Islamist government here, this is something we have to be careful.

There I Islamists and there are Islamist. None is almost means

Western friendly. -- non-Islamist. There is a lot of hypocrisy in the

West. There is good Islamist and bad Islamist. That is not how I

would describe Recep Tayyip Erdogan. A future monarch cannot marry

Catholics and there will be equal rights for women in the monarchy. -

- can marry. I think the idea that David Cameron is trying to appeal

to the women vote, not many women are going to be terribly excited

about this. They would prefer to see a reduction in the electricity

bill. I cannot believe that in this day and age we are having this

conversation. It is not a good look. This is not a good look for the

British Government. This is an important issue for ordinary people

in the 17th century. I agree. What is interesting about this, finally

this prescription on a Catholic taking the throne, it is consigned

to the dustbin of history. You can marry a Catholic... It does not

quite say, as far as I am concerned, because they at the head of the

Church of England... This is a barbaric tradition. We see this

next week with a guy Fawkes night. I am not a Catholic, I am a non-

believer. I find it strange that a country like Britain will burn

effigies of the Pope. I am not sure. There is certainly a connection.

goes back to the terror... So many centuries. The fact that anyone is

getting exciting -- a Saturday about this is really pathetic. --

excited about this. Kate Middleton's daughter is going to be

Queen, this is a little bit worrying. What about establishing a

republic in Britain? The idea that the monarchy is modernising itself.

What is the point? It is an ancient tradition. It is a bit strange.

the end of this century... They change in a traditional way. That