:00:32. > :00:42.How does the EU looked to the rest of the world?
:00:42. > :00:45.
:00:45. > :00:50.What to do about Iran's nuclear ambitions?
:00:50. > :00:54.Welcome, everyone. The G20 summit in France this week was supposed to
:00:54. > :01:00.pr pratform for economic recovery. Proceedings were hijacked
:01:00. > :01:05.by the bizarre going on is in Greece. China, the United States
:01:05. > :01:12.and other big parties were looking on - how does the EU looked to the
:01:12. > :01:18.outside world? Cannot put its house in order? I don't see any crisis.
:01:18. > :01:26.(LAUGHTER). Greece is getting a new government,
:01:26. > :01:30.it has a bail-out plan, Italy is under IMF supervision. It has a
:01:30. > :01:34.good industrod industrer countries which had troubles are implementing
:01:34. > :01:42.austerity measures. The German economy is doing very well. France
:01:42. > :01:46.political impetus to the euro. The euro is very stable, it is all in
:01:46. > :01:53.the imagination of the outsiders. (LAUGHTER).
:01:53. > :01:58.Your glasses are rose-tinted, I mean, come on! On the whole, there
:01:58. > :02:05.is a road map for the future. In
:02:05. > :02:10.what to whom. I think in the end, the Chinese will give the money to
:02:10. > :02:20.the Europeans, which is provoking a lot of American indie.can indie.
:02:20. > :02:20.
:02:20. > :02:30.afraid that the Chinese will not finance American interests any more
:02:30. > :02:33.
:02:33. > :02:42.-- jealousy. The problem is that now there is a real eurozone,
:02:42. > :02:47.Germany does not have the same interest rate to finance its
:02:47. > :02:52.debt.... I think you should go to Beijing and give a speech, because
:02:52. > :02:57.they are not convinced there. you think they will cough up some
:02:57. > :03:05.kind of money? Investment? Bail- outs, what yts, what yhey will do?
:03:05. > :03:08.They already hold $600 billion in Euro bonds. They have a strong
:03:08. > :03:17.interest in Europe. They are completely unconvinced by what is
:03:17. > :03:22.on offer. They are saying - if you can get your act together, we will
:03:22. > :03:29.cough up. Were they convinced before the Greek referendum
:03:29. > :03:35.possibility? It was not that that put them off? That did not help. I
:03:35. > :03:38.think even before the extraordinary events in Greece I think it was a
:03:38. > :03:48.triumph of hope and expectation to believe something would come out of
:03:48. > :03:50.
:03:50. > :03:56.this. The American economy is doing badly, it has an enormous deficit.
:03:56. > :04:03.It is not providing the sort of hope that the Euro is providing.
:04:03. > :04:13.an outsider I could say that it is a Greek tragedy.
:04:13. > :04:16.
:04:16. > :04:24.(LAUGHTER). You said there is a road map - yes,
:04:24. > :04:34.but there is no road. This is the problem. These communications have
:04:34. > :04:37.
:04:37. > :04:42.been Declarations of intention, but there is no decision.... President
:04:42. > :04:52.Sarkozy has been next to Obama, they are a duet on French TV, which
:04:52. > :04:56.has helped him. Europe is in crisis. People do not share the idea of the
:04:56. > :05:03.bureaucrats. They have nothing to offer. They have created what was
:05:03. > :05:12.supposed to be a common currency, but it became a single currency.
:05:12. > :05:19.Between the two they find it difficult. I would not dismiss it
:05:19. > :05:28.so easily. Anglo-Saxons are always conspiring - the Americans are
:05:28. > :05:32.always plotting, things like that. I think Obama is going to have some
:05:32. > :05:39.second thoughts about appearing on stage and in photographs with this
:05:39. > :05:43.particular group of European leaders as his election draws close.
:05:43. > :05:51.He does not want to be seen on stage with these people who are
:05:51. > :06:00.perceived in the US as being rather a farce. This group of leaders is
:06:00. > :06:05.not taken seriously. Is it their fault, or at is it that nobody can
:06:05. > :06:11.actually do it? What you have is 27 different electorates with 27
:06:11. > :06:15.different mandates and they are trying to produce common ground.
:06:15. > :06:25.They can't actually do it. When you are Germany, you think one way,
:06:25. > :06:38.
:06:38. > :06:45.when you are Greece, using a knot. -- you think are -- are off....
:06:45. > :06:50.this all came together, we knew the figures were being fudged, this was
:06:50. > :07:00.not a unified 27 nations. You could see it being fired at the time, but
:07:00. > :07:06.
:07:07. > :07:13.we thought it would work. Now it may all fall apart. -- fine. Half
:07:13. > :07:21.of these countries are doing well, half are doing badly. The euro is
:07:21. > :07:28.stable on the market, it is a reserve for many central banks. It
:07:28. > :07:34.is a very difficult question for the Anglo-Saxons, the British and
:07:34. > :07:40.the Americans. They are against the euro because it is bad for their
:07:40. > :07:45.own interests, they can't understand the notion of solidarity.
:07:45. > :07:48.But does solidarity extend to the French and German governments
:07:48. > :07:54.trying to change the composition of the Greek and Italian governments,
:07:54. > :08:00.which has been going on this week. They do not want President
:08:00. > :08:10.Berlusconi all present and Papandreou. -- Prime Minister
:08:10. > :08:11.
:08:11. > :08:15.Papandreou. Italy needs the money. With Greece, we are heading towards
:08:15. > :08:22.a much better government francs to external pressure, it is such a
:08:22. > :08:30.mess of there. And that is how democracy works, is it? No. It is
:08:30. > :08:37.in Europe's interest... In most other countries, the left and the
:08:37. > :08:46.right is together. What matters is that Germany, France, benevolence,
:08:46. > :08:56.God countries who are helping the others -- of the Netherlands, the
:08:56. > :08:56.
:08:56. > :09:00.good countries who are helping the others. There is talk about not
:09:00. > :09:04.rewarding bad behaviour. President Sarkozy talks a different kind of
:09:04. > :09:08.language - about printing money. They have a problem with their own
:09:08. > :09:13.electorates about the limits of solidarity. I think what Germany
:09:13. > :09:18.and China have in common is that they have benefited hugely from
:09:18. > :09:24.curious currency arrangements, shall we say. The Chinese are
:09:24. > :09:32.undervaluing their currency, and Germany is inside the euro which
:09:32. > :09:35.has allowed the German currency to be undervalued. I do not detect a
:09:35. > :09:45.willingness in the German electorate to acknowledge that
:09:45. > :09:46.
:09:46. > :09:50.ought to make the kind of transfers that are required. The Euro was
:09:50. > :09:59.supposed to unite these countries. Now it has divided them into good
:09:59. > :10:09.ones and bad ones. We have already seen that there are two locks
:10:09. > :10:14.
:10:14. > :10:17.within the Euro, -- blocks. Those who rule and those who are ruled.
:10:17. > :10:23.You cannot have a European Union without a political union. The
:10:23. > :10:26.British make it impossible to have a political union. You need fiscal
:10:26. > :10:33.harmonisation, monetary harmonisation. You need political
:10:33. > :10:41.harmonisation. This is impossible now. We only have the euro with no
:10:41. > :10:49.political solidarity. That is putting the cart before the horse.
:10:49. > :10:52.Having the currency before you have the union? Yes. The currency
:10:52. > :11:00.doesn't work without single governments. What is the point of
:11:01. > :11:06.having a single currency? You can see in Greece already we have wiped
:11:06. > :11:10.out up to 50% of what they borrowed. Maybe someone will have to pay it -
:11:10. > :11:17.French taxpayers, German taxpayers. You can see Nicolas Sarkozy and
:11:17. > :11:27.Angela Merkel saying that Greece could be kicked out of Europe.
:11:27. > :11:27.
:11:27. > :11:32.could be a disaster for Greece, and a disaster for Germany. There are
:11:32. > :11:42.currency would have value upwards very strongly. Economically, it is
:11:42. > :11:43.
:11:43. > :11:50.like shooting yourself in the fort. But in 17 feet, in this case.
:11:50. > :11:55.sorry, how is the British economy doing at the moment? We are not
:11:55. > :12:04.talking about the British economy... I think it is very important. When
:12:04. > :12:12.you are outside the eurozone you should have a good economy. The
:12:12. > :12:21.problem is that the eurozone is doing well, but the moral hazard is
:12:21. > :12:27.not in the eurozone. It is the refusal... You are in favour of
:12:27. > :12:33.these taxes? Yes, it will make less austerity for the people of Europe.
:12:33. > :12:37.How is that tax seen in the United States? It is seen as a joke. It is
:12:37. > :12:47.not taken seriously. All these Ben date approaches that have been
:12:47. > :12:48.
:12:48. > :12:56.tossed around this week are not taken seriously -- bandage. Let's
:12:56. > :13:02.accept that the eurozone is doing great, for the sake of argument.
:13:02. > :13:10.How will you regard Greece - it is a gangrenous limb that needs to be
:13:10. > :13:20.amputated? Why are you all obsessed with Greece? Go to Holland, go to
:13:20. > :13:25.
:13:25. > :13:31.France, go to Italy. As you know, the difference between... It is
:13:31. > :13:36.nothing to do with... The Anglo- Saxons did not want the euro, they
:13:36. > :13:44.want free trade. That is the problem. They might get it in the
:13:44. > :13:49.end, because the euro might end up a pile of nonsense. No, because
:13:49. > :13:54.this marvellous enterprise will be a success at the end. I know you
:13:54. > :13:58.will throw a fit here, but where does this leave the Euro-sceptics
:13:58. > :14:08.in the Conservative Party? They see this as a great opportunity to
:14:08. > :14:10.
:14:10. > :14:16.renegotiate British terms of being I think that is the danger for the
:14:16. > :14:21.UK. Let us assume that the euro survives this. It will only survive
:14:21. > :14:28.in the long-term with a much stronger a union. That would give
:14:28. > :14:36.Euro-sceptics their excuse to call for a referendum.
:14:36. > :14:44.Marc Roche's point is there. That makes things potentially difficult.
:14:44. > :14:49.Extremely difficult. If the UK were to vote to leave their EU I do not
:14:49. > :14:54.think the UK would move very long. I think Scotland would make its bid
:14:54. > :15:04.for independence and go back into Europe. It could precipitate a
:15:04. > :15:12.series of crises. Greg Katz? They used to be the perception of so
:15:12. > :15:18.much strength, Winston, economic power, old world art and science. -
:15:18. > :15:24.- strength and wisdom. Said that tidy made sense. If you were in
:15:24. > :15:29.Brazil or China or one of the other strong Asian countries where there
:15:29. > :15:35.is so much growth you would look at these people with their wealth and
:15:35. > :15:40.questionable standards of behaviour and think it was a joke. Where
:15:40. > :15:48.would she like to leave? What you like to leave in Brazil or China we
:15:48. > :15:57.do not have a welfare state and will you have such inequality.
:15:57. > :16:06.Europe is a wonderful place to live. It is a group which has a political
:16:06. > :16:10.and economic vision which the Anglo-Saxons are trying to....
:16:10. > :16:15.Something about 40%. This is not a market place for a lot of people
:16:15. > :16:25.any more. You have the very dissolution directorates and anger
:16:25. > :16:27.
:16:27. > :16:35.amongst people. -- disillusioned electorates. We will return to this
:16:35. > :16:40.topic. With the exception of public statements from the government of
:16:40. > :16:45.Iran everyone else thinks they are building a nuclear bomb. How
:16:45. > :16:52.serious is this and will it led to nuclear conflict? Thursday, is in
:16:52. > :16:58.building a bomb? It is building the wherewithal to make a bomb. This
:16:58. > :17:04.does it under the Shah and it has continued. Iran wants to become a
:17:04. > :17:12.nuclear power and nothing can stop it. Nothing? Unless there is their
:17:12. > :17:21.racing change and the new regime changes things. -- there is a
:17:21. > :17:27.regime change in around. Under the present regime they will not
:17:27. > :17:32.abandon it. What he think other consequences of that? We will get
:17:32. > :17:41.to US and a moment, but in the region, Turkey and Saudi Arabia in
:17:41. > :17:47.particular. This is immensely destabilising. He started his own
:17:47. > :17:54.nuclear project with the help of the Gulf co-operation Council
:17:54. > :18:01.countries. This is the first step and Francis helping them. The
:18:01. > :18:06.Turkish government has appointed a commission to study yet. They say
:18:06. > :18:11.they talk about a nuclear umbrella thanks to their membership of NATO.
:18:11. > :18:16.That well known longer be operational when we wanted. You
:18:16. > :18:23.could have nuclear arms in the Middle East. And of course Turkey's
:18:23. > :18:30.centre of gravity is shifting from NATO to some degree of leadership
:18:30. > :18:40.within the Muslim world. Absolutely. Iran and Turkey are vying for
:18:40. > :18:42.domination of the Middle East. The chaperone of the Arab Spring. The
:18:42. > :18:52.Turkey's Prime Minister and Foreign Minister have been all over the
:18:52. > :18:53.
:18:53. > :18:59.place. -- Turkish. Whereas the Iranian politicians are not welcome.
:18:59. > :19:07.Noting Tunisia and, not in any of the Arab Spring countries. Welcome
:19:07. > :19:12.in Damascus, I suppose. A years. In Damascus the regime is divided.
:19:12. > :19:22.Iran as a government does not went to stand behind Bashar al-Assad
:19:22. > :19:23.
:19:23. > :19:27.forever. This has paralysed Iran's Syrian... Given that background,
:19:27. > :19:34.what he think that make the options? On the assumption that
:19:34. > :19:38.there is not regime change. Even if there is, given the his to root of
:19:38. > :19:45.Iran, you may have another government that still wants to
:19:45. > :19:49.pursue this nuclear programme. -- given the history of Iran.
:19:50. > :19:55.becomes another issue because this makes the Republicans look strong
:19:55. > :20:02.and a oriented toward national security. They can argue that
:20:02. > :20:10.others are weak. The options, sanctions or a military strike,
:20:10. > :20:18.none of them makes sense Bolwell have much impact. What people are
:20:18. > :20:21.dreaming about his a clean missile strike that has a desired result.
:20:21. > :20:27.Any analyst with a good understanding will say that is
:20:27. > :20:35.highly unlikely to have any success. This is why the situation drifts
:20:35. > :20:44.along. I am not sure it can drift for 15 years. We have not mentioned
:20:44. > :20:51.Israel yet. And it was reported this week that Netanyahu was trying
:20:51. > :20:58.to get more people than the Cabinet to -- in the Cabinet to approve a
:20:58. > :21:06.strike. That is a wild card. What he make of it? All the options have
:21:06. > :21:16.failed. Pressure has failed. I think they military strike is the
:21:16. > :21:22.
:21:23. > :21:32.only option. So is the? Yes. seriously? Unless the Iranians show
:21:32. > :21:38.us the nuclear power is for purely Pacitti queues. -- peaceful use.
:21:38. > :21:43.Electricity, for instance. Is there was an individual target that is
:21:43. > :21:53.one thing. If it is dispersed as people think it is, it is difficult
:21:53. > :21:53.
:21:53. > :22:03.in military terms. The politics RMS given what happened in Iraq. -- the
:22:03. > :22:07.
:22:07. > :22:10.politics are a mess. The opposition in Tehran is completely repressed.
:22:10. > :22:18.They are Keneally impossible government to have a relationship
:22:18. > :22:26.with. For patriotic reasons. Without achieving its military
:22:26. > :22:34.objective. I think it would be catastrophic. And do you see any
:22:34. > :22:39.appetite for that in this country? Absolutely not. Before there is a
:22:39. > :22:44.military strike, let's do the minimum that one could do. That is
:22:44. > :22:54.to apply punishments or sanctions that already exist any non
:22:54. > :22:55.
:22:55. > :23:03.proliferation treaty. A candidate for Egyptian President SEA is now
:23:03. > :23:13.backed by Iran. Every cup the years they put another 20 questions to
:23:13. > :23:15.
:23:15. > :23:22.Iran and wait for an answer. There are sanctions in the NPT applying
:23:22. > :23:28.to the Islamic Republic. This is an important issue because part of the
:23:28. > :23:38.Iranian leadership wants to stay in and the other part does not.
:23:38. > :23:38.
:23:38. > :23:43.ever the case in Iran. But I wonder: Iranians have prospered in
:23:43. > :23:46.every continent and country on earth. How were they doing at home?
:23:46. > :23:55.Given the price of oil and the strategic location, shouldn't they
:23:55. > :24:05.be doing better than they are? Orang mac his under-achieving. --
:24:05. > :24:05.
:24:05. > :24:15.of course, Iran is under-achieving. Spain is much richer than Iran now.
:24:15. > :24:17.
:24:17. > :24:25.We saw those problems. At the same time Iran is now an... Bangalow
:24:25. > :24:30.just because it is self-sufficient in food and has a diverse industry.
:24:30. > :24:40.It does not depend entirely on oil. It is a huge country and most
:24:40. > :24:41.
:24:41. > :24:48.people have very little contact with their government anyway.
:24:48. > :24:55.think it is important also that the Israelis come clean about their
:24:55. > :25:05.nuclear situation. We do not know where they are. They are not in the
:25:05. > :25:15.
:25:15. > :25:24.MPT. -- NPT. That is a big problem. Iranians want to be accepted by the
:25:25. > :25:33.outside world. Psychologically they want that. We created the world's
:25:33. > :25:39.First Empire. We do not want to be a pariah. It would have a beaky
:25:39. > :25:44.impact on the Iranian public opinion and the leadership.