17/12/2011 Dateline London


17/12/2011

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nothing for the temperatures. I Welcome to Dateline London. This

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week we look at the eurozone crisis. The state of the coalition

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government, the US pull-out from Iraq, and protests worldwide.

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Joining me today are Tim Montgomery, Ashish Ray, Mustapha Karkouti, and

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Catherine Mayer, of Time magazine. Welcome to what used.

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The eurozone crisis continues with the outside looking in, with the

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French Prime Minister calling Britain and obstinate kid. The top

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credit agency is considering downgrading Belgium, Spain,

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Slovenia, Italy, Ireland and Cyprus. Tim Montgomery, David Cameron

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seemed to have some success in his own party by using his veto. But

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what does it mean for a coalition government when the other half does

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not agree? It was a boost for David Cameron. It was also in the mind of

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the British people that he had shown strength, and honesty. He

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said what he was going to do if he did not get agreement, and he did

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exactly that. That is why he has enjoyed a bonus. The danger for him

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is what you say, the coalition is not such a happy thing as it was

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just two weeks ago. My own view is that if Nick Clegg wants a retreat

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on the veto, he will not get it because of the political bonus that

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David Cameron has received from exercising it. Where the cost will

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be is when the Conservatives ask the Liberal Democrats for action on

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growth, they will find a coalition partner who is less agreeable.

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Catherine, one of the things Nick Clegg, who is the other half of the

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coalition, the Deputy Prime Minister, one of the things he said

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was David Cameron using the veto would mean the United States would

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think less of the UK, that perhaps we would not have quite a special

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relationship. Was he right? There is always an idea of the special

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relationship which I always want to do this with my fingers. It is such

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a nonsense phrase in so many ways. The idea that Britain was the

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bridge to the rest of Europe, which was so much difficult to do

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business with because they did not speak the same language and they

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were not as close. That notion has been unravelling for years. But if

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you look at these things the other way around, yes, it is quite clear

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that in Washington there is consternation about the eurozone,

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about different people's roles within it. I would say there's a

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lot more consternation about Germany bringing out what Cameron

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turned the big bazooka. But did you not find it ironic that the euro

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zone was told to line its ducks and a row? This was at the. The US

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government was facing a complete shutdown because they could not

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agree the Budget. So what you are actually seeing is a vacuum in

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power, a lack of control in all of these different capitals. I do not

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think there are many of things to worry about at the moment, but the

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idea that Britain and America will permanently alter their

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relationship at the stage where who knows who will be in next year, in

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the US elections in 20th November 12. Many of these eurozone leaders

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are facing elections, the coalition is looking a rockier than it was,

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but if I had to take a bet, I would say that they did Cameron and Nick

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Clegg will be in power long after some of these other leaders we are

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talking about. I think to a certain extent it is much ado about nothing.

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The coalition will remain. The Lib Dems have know where to go, with

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about 10% to go. They are not in a position to cut loose. Even if they

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were to leave, it would be very difficult for the rest of

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Parliament to muster up 55% of support, and thereby defeat the

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Government on the floor of the Commons. That said, I think it is

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fairly clear that whatever Cameron did, good, bad, indifferent, has

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been fairly popular with the British people. I have noticed

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three opinion polls and the last are the days that have indicated

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the Conservatives are marginally ahead of Labour. That is a fairly

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significant indication of how people may be thinking. It is

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possibly more Middle England than anywhere else, but it is also

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possibly people thinking more emotionally than with their heads.

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At the end of the day, the fact is that Cameron has emerged from this

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decision of refusing to sign up to the treaty as rather more popular

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with the British people than what he was a week ago. I would like to

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continue on that. I would also like to say that will we see really is

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political theatre. This is on all sides. Nick Clegg is trying to

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satisfy a his ground roots, and his party and all that. David Cameron

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is trying to address the domestic background, by talking about Europe.

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So does President Sarkozy. Everyone has got a domestic issue, and they

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need to satisfy that. There is political theatre. But is that

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getting in the way of progress? We have heard of some of the credit

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agencies saying that there is no political solution to this.

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doubt about that. If you look at the Europe summit, it is a disaster.

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What they need to focus on, the whole world, by the way, are

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worried about what is going on in the euro-zone. What they need to

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focus on his the eurozone problem. No one is talking about that. The

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whole summit failed to address the issue, and now when you listen to

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these politicians, whether it is Nick Kavanagh David Clegg or

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President Sarkozy. This theatre is not deliberate. The country that

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was the most isolated at the summit was Germany, not the UK, but then

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David Cameron did what he did, and it unleashed this particular war of

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words. The one phrase I would take issue with that is much ado about

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nothing. This is much ado about something absolutely fundamental,

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and truly terrifying, and I do not think there is any sign of...

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am not underestimating the seriousness of the crisis. Nothing

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will change in before a nation that there is at the moment. What would

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worry Britain is the fact that 10 countries, out of the 27 who are

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not part of the euro, Britain was the only one who refused to join

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the new treaty. The isolation of Britain therefore is a worrying

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factor for the Forum of this. Britain has isolated itself.

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worrying factor for the Foreign Office. No one went along with

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Britain. But it is hard to say that at the end of this process that

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Britain will be isolated. Those who signed up to the treaty did it

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quickly, and I actually think it is perfectly possible that in a few

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weeks we will see the treaty as having failed to address the

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central issue of the euro. Britain's isolation might look like

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wisdom and foresight to stand away from this. I think you are right up

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until the point where you talk about what Britain is going to look

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like. I think everyone is going to come out of this looking bad. The

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whole thing is a tissue. But never dealt with the whole issue about

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the role of the European Central Bank, for example. There was

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nothing substantial there. But it is not as though the deal was

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inadequate to save the euro, it cannot be said of. Is that your

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view? It has to. We have seen bad economic data from island in the

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last 24 hours, and that was supposed to be the country that was

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coping best with austerity. -- from island. Until the countries have

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exchange rate flexibility, which is the way that every country has

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dealt with the crisis, they will not recover. The euro has not dealt

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with this. Britain will now have observers, we are told, is Britain

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now impotent within Europe? We have vetoed one thing, and we will be

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sitting on the outside of another. If you go to a negotiation table,

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people also know -- or was no at the end of the day you will always

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be there. Because Britain walked away once, we have now shown that

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our negotiation tactics matter. In the last few days we have got an

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agreement on fisheries. That has happened since the veto was

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exercise. That might have happened anyway. It might, but the key point

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is that since we exercise that, we have won a major agreement with

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Europe. I think the exaggeration of the isolation argument has been

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Provan. -- has been proved. Over the past years, the governments

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have always have disagreements with Europe. But it did not reach this

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level. We all know what Cameron wanted, he wanted to protect the

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city of London and the UK to continue being able to regulate its

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own city and to stop you up from interfering in that. That is a

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national issue, and no one heard the debate before the summit, and

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suddenly we're reaching a point at the end of the summit to the

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surprise of so many that David Cameron was the only one against

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the stop I agree that Cameron has come across looking strong to the

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British public for the moment. people will see this was not a

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demonstration of strength, it was a demonstration of weakness to his

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backbenchers, and that every single leader involved in the process

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looks impotent. This is a year where we look around and do not see

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anyone who has control of the situation. Do you agree with Tim

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Montgomery? Will the euro go down? I think he is probably right.

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Probably by the middle of next year. It is a possibility. It will be

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catastrophic if it does take place. The European countries,

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particularly Germany and France will not allow it to happen easily.

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This is my feeling. But if you look at the figures, what has happened

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today with the credit rating agencies threatening to downgrade

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the creditworthiness of six countries, including Italy, and

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with the other bad news about the euro, it does not look good. I can

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see that. I still feel that Germany in particular will not allow this

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to happen easily. It is still possible they may cut adrift one or

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two countries who are in a position of weakness, and therefore may not

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be part of the euro or in future. But for that to do so good --

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disappear altogether, I am not sure. Let us leave that for the moment.

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The United States formally ended its involvement in Iraq this week.

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The troops may be on the way home but what is being left behind? Mr -

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- Mustapha Karkouti What do you make of this? There will be no

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writs on the ground for the next few years, but the American

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influence will remain there in so many forms, no doubt. Financially,

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economically. Running Iraq after what has happened over the past

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eight or nine years... Was it a success? It is not really a success,

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it is a disaster. From the invasion in 2003 up to now. The loss of

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human life, the loss of finance and all that, you cannot call at a

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success, and now leaving Iraq with a huge vacuum in the country, being

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filled by probably other regional areas, like Iran and Turkey, there

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is a competition between them over the influence in the region itself.

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Whoever controlled Iraq at the end of the day would certainly

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An election year next year. Or would you agree with Mustapha

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Karkouti, a disaster? It was gracefully done to the extent it

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was possible a withdrawal was absolutely inevitable. I thought

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the ceremony itself was actually done very moving. The important

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part was that the tribute was paid to the servicemen and women, which,

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whatever you think of the conflict, and I think it was a disaster and a

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bad idea and everything else, you have to pay tribute to the people

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that served there. What does Obama game in the public? I? He does and

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lose from it but it is not an election winner. This entire

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election is going to be fought on the economy. That is a truism in

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many ways, but at this particular time, the tea party influence,

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everything else, this is going to be big government versus small

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government and who you can believe will dig America out of a whole, to

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the extent that the expensive foreign wars that have uncertain

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outcomes are even more unpopular than they were, then the more you

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can find an exit, the better. have always believed it was an

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unfair, unjustified, illegal war. Illegal invasion of a country. But

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violated the United Nations Charter. At the end of it, the proof of the

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pudding will be from here onwards. The Iraq that has been left behind,

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I am not sure whether it is as stable today as it was before the

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Americans went in. It has happened at a great cost. It has cost $800

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billion to the American Exchequer. It has weakened the United States

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economy. I have always felt that the better way of tackling the

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Saddam Hussein problem would have been a peaceful and diplomatic

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approach through the United Nations. That process was never allowed to

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be completed and instead a violent approach was taken and I am not

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sure the solution has been a pound. Tim, given we were coalition

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partners with the United States in this, what fall-out will be on the

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UK, looking bat at -- looking back at these various conflicts. We have

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heard the argument about the justification of the war many times

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and the key thing, the judgment that needed to be made over recent

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years, particularly the decisions that President Obama has made, we

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have invested so much in this war, the deaths, that was enormous.

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After having spent so much money and blood to ensure that Iraq moved

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to stability, when a bummer inherited Iraq, it was getting

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better. The key thing he needed to do was to do what Americans have

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achieved in places like Korea and Germany and Japan after similar

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conflicts, which was a continued American presence. He did not

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deliver that. What concerned him was to get the troops home in time

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for the American election. It means now the Iraqi army say they are not

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able to protect their airspace, they are not able to undertake

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counter terrorism, they are not equipped to look after Iraq. They

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needed the United States to stay and Obama sabotaged an agreement so

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that troops could stay for domestic political reasons and that is why

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we will see Iraq incredibly vulnerable to Iranian and other

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nations in Florence. I think history will judge Obama very badly

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for his judgment. -- and other nations influence.

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Reports from Egypt this weekend that the island still continues on

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the streets. Where are we? Well, it is the time of revolution, and this

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is what is happening in the region. And the revolution is not overnight,

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it is not one week or one month. It will continue in this situation for

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I really don't know when, it might take a few years. Whether in Egypt

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or in Syria, everywhere in the region. There is a huge tide coming

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into the region. Change will happen. What is the role of other countries

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looking in, Ashish Ray? What should we do to support these emerging

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democracies? I think support for democracy right across the border

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is necessary. A country like India, a good example in terms of a

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developing country, having had democracy from day one, and that is

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of great benefit for any country to have the freedom to have the rule

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of law and such like, to encourage the developing world, including

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China, to encourage... China might not be a great case itself, but the

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fact that democracy encourages stability, we need to see the Arab

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Spring actor the results in democracy which is durable. We are

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witnessing the first shoots, I guess, and therefore, there is some

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time to go before it can really mature. Even in Egypt, there are

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signs that the military there doesn't seem too keen to be

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dislodged from their exalted position. I think we have to wait

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and watch and watch it very carefully. And encourage the

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process from outside, more than anything else. Catherine. I am not

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even sure about what process it is that we think we are encouraging.

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What is obvious is take a look at that region widely. What we have

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seen around the world is protest happening everywhere. The Arab

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Spring sparked protests in China, you mentioned China. You have had

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Russia, you have had, you know, Kazakhstan, where they have managed

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to keep the lid on things for a long time, you are seeing this

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everywhere. I talked earlier about the sort of impotence of leadership

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across the world at the moment, and this is an interesting moment. And

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little advert for time. We chose our person of the year, and our

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person of the year is the protester. It is the protesters because we are

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not looking across the Arab Spring, but the occupied movements, the

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indignant ones in Spain. This is a moment where there has been a

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movement where the political process is not moving. Things like

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the eurozone crisis, the political leaders are like rabbits in the

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headlights. People are coming out onto the streets. But we don't know

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what it will end up like. With that sort of protest, it can end up with

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something great and wonderful, and democracy the way we want to see it,

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but it can go in a completely different direction. You say time

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has chosen the generic protest of. Normally, it is a strong leader

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that we choose. But what you're saying is that the strength is

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lying with the be bought. Looking at the runners up, you look through,

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there may be an argument for Angela Merkel to beat a runner up, but she

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has been more decisive through what she has not done than through what

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she has. And the other runner up, I wake, the Chinese dissident, and I

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profiled Kate Middleton, and some people don't think she should be

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there, but people went on to the streets. There were people cheering

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this institution. It is exactly one year ago that fruit seller in

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Tunisia set fire to himself, which then started this movement. What

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the editorial team had in mind when they decided this simply they would

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have a figure, head of state or somebody, but this time they had

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the street on the cover. People are sick and tired of their leaders.

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This is a fact in the entire region. That is why an Tunisia, for example,

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huge demonstrations, and in Egypt, and Syria, people are tired. They

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want to change the leaders. Their leaders are not fit to lead any

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longer. Tim, politically across the world, leaders are having to think

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not just about their own issues but issues such as this, what people

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want in their own countries and in developing countries. How are we

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handling it? Politicians realise this is a phenomenon of the

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internet age. Previously, scattered people were not able to connect

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with people of a like mind, but social media and the internet means

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that small groups of people geographically disparate can come

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together and create a storm, particularly true of the protests

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we have seen against Vladimir Putin in Moscow. I think what the trick

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of a politician, the art of a politician is to distinguish

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between a mass movement, a protest which signals something deep in a

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country and something which is a small number of people perhaps that

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are extreme and bent on violence. There is a common theme of violence,

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but it is more important for politicians to know when these are

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unrepresentative. If you can quickly tell us what do you think,

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Ashish Ray. One of the pit bulls is they could be right wing hardline

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religious elements. It is a pitfall we need to be prepared for.

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future? Optimistic? No. At side of the West, the world is flourishing.

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I think the euro crisis is a worry for the whole world, but I think in

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a year, year-and-a-half, we will be in better times. Thank you for all

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