19/05/2012 Dateline London

for the club. Those are the headlines. Now it is

Welcome. The very existence of the euro appears under threat. If

Greece least, what for Greece and the eurozone and Britain? The head

of the Bank of England says we are about to be hit by a euros storm.

And the latest wheeze in the phone hacking scandal. Joining me today

are Steve Richards of the Independent, Thomas Kielinger of

Die Welt, Maria Margaronis of the Nation, and Dame Ann Leslie of the

Daily Mail. Good to see you. Greece first and

the people of Greece, not surprisingly, seem to hate the

austerity forced upon them and has put them out of work. But the

opinion polls say they want to stay in the euro. Is that possible?

Ahead of more elections a political crisis on top of an economic crisis

should they get out of the euro? Is that right? The people of Greece

want to stay in the euro but don't but the conditions? Yes. Absolutely

right. 80% of Greeks want to stay in the euro but in the last

election about 70% voted against what are known as prone memorandum,

the memorandum that supports the bail-out agreement voted against

the pro Merrin and -- memorandum parties. There are the other

parties that got them into the mess. The austerity programme is not

working. People hate it. They are miserable. One thing I think is

definitely not going to happen is that we are not going to continue

with his programme. Right. The question is, can you then stay in

the euro without the austerity? Some people say, OK, you want the

benefits but card except the rules, including paying taxes. Come on.

This thing about Greeks not paying taxes is exaggerated. There are

many wealthy Greeks who do not pay them but the entire public sector

which we always hear it is so overblown has to pay their taxes.

Leaving aside taxes for a minute, I think, really, what happens depends

on what happens in the eurozone. It is not just a great crisis. It is a

general European crisis. -- a great crisis. There has been pressure

from President Obama and Francois Hollande even from Mario Monti.

There is also pressure from IMF saying we have to change tack.

Germany has to change tack. Thomas? I don't like to be the wise man of

last resort. Germany may be the main creditor nation. We are as

bereft as everyone else how to solve the crisis. We don't like to

call this thing austerity. David Cameron corset efficiency.

There you are. It is a savings programme, one of the translations

of the germs, isn't it? It is a good thing. -- of the Germans.

Angela Merkel is supposed to have suggested the jerk Van -- the

Greeks should have a referendum, not such a bad idea. The problem

with democracy in debt-ridden countries, if you elect politicians

that nobody trusts, you have to go one step further and get a

plebiscite, asks the people themselves what they want. The

problem its ears, the people governed by them do not trust. Why

not us the people? It may be a sensible idea. But it is Angela

Merkel who said it. If a great politician said it... George

Papandreou it suggested such a thing. Went hysterical. There is a

problem about framing the referendum that way. Take what you

offer -- what you were offered, or leave. The Greek are saying, we

can't do it. It is blackmail. it reasonable? Even if they do all

of the right things according to this by 2020 there will still be in

a mess. Yes. They had been in a mess for a very long time. Whatever

you say, the public sector, which you agree, is terribly over blind.

It's -- over bloated. The ratings were managed. They were paid for 14

months in a year. No, no. That is not right. The Greeks have

brilliantly created bits of accounting. Nobody wanted to pay

tax. This was how pay rises were given. I know. That is a problem.

am not saying the great state has been well run. Reform is necessary,

but not this one. We always blame the Government's... The whole

business of the eurozone... I have been against it ever since I went

to Maastricht at the signing. I thought, it won't work, and I was

right. People and your newspaper used to call people like me

lunatics. We knew that it would not work and it hasn't. Of course it

has worked in a sense for Germany. You have had the cheap money.

that is not good enough for one country to benefit. We have to have

prospered for all. I feel like... am of the view that the euro is the

great red herring in this debate. Everybody is light, it is all about

the euro. It the Greeks believe the euro, everything will be all right.

What has happened is interesting. After the first crash of 2008, the

eurozone and Britain recognised that Rose was the priority and they

all agree to a fiscal stimulus, even Angela Merkel. -- that grows.

It is to the credit of Gordon Brown and President Obama who pressed and

pressed and pressed. There was a co-ordinated attempt to get roads.

It worked. The economy started growing here and in most of the

eurozone countries. There was a big shift. We can't carry on, we must

cut. Austerity. And that happened before Rose had been fully re-

established. There has been a policy broke -- problem. -- the for

growth. Until they were up a way of getting the economy going, I agree

with the metaphor, it is the equivalent of war in the economy.

We must find a way of getting this economy growing again, that is, the

whole of the EU. Until we do that, everything else in a way is

irrelevant. Saif Greece goes out of the euro and devalues and all the

other things, they will still have these problems. I wonder how

significant the euro is in all of this. I think it is more about the

economic policy. Do you agree? The United States is proving better

than Europe. Moral hazard. If you keep borrowing to stimulate growth,

it means that you keep on going on the old scene, which is, keep

spending money and then somehow everything will come right. But it

is knowing when to stop. If Greece falls out of the euro or it is

driven out it is not necessarily a bad thing for them. When you think,

in the 1990s, Argentina, Russia, South Korea, had to devalue and

they started to thrive. It might have been Greece -- it might have

been better if they never went into the euro. But they're dependent on

imports now. There will be tremendous political upheaval. Of

course it depends how it will come out. It the eurozone breaks up,

which it might, break up or make- up... But to come out now will be

devastating. Great people are already on the edge. In comparison

to other countries, they were one of cases, Greece is different. It

is part of a larger union. If one member leaves then the Union itself

is up for grabs. For Angela Merkel there is no good choice. She either

has to bail out the Greeks and therefore, quote, reward bad

behaviour, which is a political problem in Germany, or not do that

and face Greece leaving and the humiliation of that. She will have

did to her sons and asked to sell, what is the worst? Still have to

pay more for them leaving, or is the bill higher if we continue to

support them? Create a bit of inflation. Let me remind you that

40 years ago, 5% inflation, I prefer 5% unemployment. Those days

are long gone. But she will have to come claim about these strict

attitude. -- come clean. Maybe if they keep Greeks and what it will

be cheaper. Let's move on. Where does this leave Britain? The

Governor of the Bank of England warned of the storm heading our way.

David Cameron in effect told the eurozone to get its act together.

But outside Britain does anybody care what they think? What do you

think? When you heard, make up or break up, it may be sound advice,

but he is on the outside, spending Other People's Money. He is on the

outside. It takes butt Britain it is in itself in recession. To

proclaim on a sort of, follow last and you'll be better off... Britain

is in a position of incredibly limited influence. It could make a

difference, if its economy started growing. That would have a positive

impact on the neighbours in Europe, and vice-versa. What is interesting

about this is that those of us who could see the case for the euro a

few years ago said, all the economies are so interconnected

there is a case for an economic union that recognises that

interconnection. What this crisis proves is just how committed they

are. In other words, if Britain could change its rigid approach to

the crisis and started growing, that would help the eurozone. But

the lectures from British Chancellor or prime minister will

be virtually ignored. ridiculousness of David Cameron

lecturing Europe! What has gone wrong with their sanity? It wasn't

so much a lecture that was the problem. It is what he said for the

domestic audience. If he loses the export market, if the eurozone in

close, then he has a problem. the content of what he had to say

was effectively, they should be eurobonds, more fiscal

centralisation. He is talking about a European superstate, isn't it?

But not with Britain? It is rather like those people who are pro

European superstate who say, it was the idea of -- promoted by

Churchill. We forget, or choose not to remember that he said, except it

or not include us. It is fair enough of David Cameron to express

a view about how the eurozone should get out of it. It can only

work with more political control. He is right. There are slightly

separate issues. And again, he doesn't have to be part of it. But

there is not -- another reason why he is doing it. And Mervyn King. If

the British economy does not start growing soon he wants the story to

be, this is all to do with the collapse of the eurozone. He would

not be the first British Prime Minister for when things are going

well to say, I am doing it. That is true for 50 years? The past 250

years! But are nonetheless that is part of the reason he is doing that.

He is also playing a game where he is on the one hand promoting growth

in Europe and then doing whatever he can to protect the city of

London which is the main reason he did not sign the fiscal treaty.

And why yesterday he completely stumbled Francois Hollande of an

I can understand. Britain is so dependent on the financial sector.

There is a lot of talk about balancing the economy. But it will

not do it overnight for 10 years. Anything that stifles the financial

sector even more, where does the Greece come from? -- Rose. They are

hoping to export their way out of the debt. That is a shocking

realisation. I can understand. G8 summit is happening. People will

be leaning on Angela Merkel. Barack Obama is suggesting that petrol

supplies should be released. There are a few kinds of things that can

be used. I am a great believer in democracy. But people to mess

things up. You cannot actually get people to do what you think is wise

without doing these grandstanding nonsense that others are doing. One

of the things that Europe has been blind it to is the rise of Asia.

That is where exports should have gone. But they are lazy. The

English are lazy. The Germans, less so. The in thing is to own a

Mercedes in China. On that, it is a slightly worrying element that

every now and again we all think, these wretched collections are

getting in the way. -- elections. Angela Merkel would not be able to

do what she needs to do because she is facing an election. President

Obama is out of this because he wants to win an election. And you

start thinking, we could do without these elections. That is what has

happened in Greece and Italy. flak that phrase, democracy is the

worst form of government except for all others. Perhaps you could

extend the duration of Parliament. There is another problem. We have

allowed the financial markets to become far more powerful than the

national democracy. Suddenly, greet debt and the interest payments and

great debt shot up. There was nothing political, it was purely

financial. It happened because they missed the boat on the American

loans crisis. The why do people take the ratings agencies seriously.

Does anybody know? I think there is a lot of corruption involved. The

ratings agencies often have offices in the companies they are waiting.

They drink together, fornicate together, smoke together. There are

absolutely a branch of the company. They are supposed to be auditing

them. There is a kind of corruption. Once they come up with these new

issues, everyone is shouting from the rooftops. I was watching the

last election on the television. There had been a market report

coming in parallel with them. As if that was what we are actually

interested in. The great people seem to be in 10 minds at the

moment. -- greet people. There seems to be a couple of front-

runners. We are going to end up with some sort of coalition

government. I do not know what it will be. It depends on the next few

weeks in Europe. There has been a terror campaign in Greece. A lot of

people feel, at last, that some people are talking about the anger

and despair. He is playing a massive game of chicken. He is

saying, this is my position. We all have a stake in this. Rebecca

Brooks was charged with obstructing justice this week. -- Rebekah

Brooks. It could end up with a years in prison. She is Rupert

Murdoch's former right-hand woman. How serious a moment is this for

the British press? Also, for the British politicians. There is a

revelation of closeness. It did not surprise me. Because of what I was

saying about the ratings agencies. You get very close to the people

you are supposed to be reporting on. If you start getting ridiculous

legislation saying every time you have a talk with a minor official

in the government you must record it. This will actually be very bad

for news. Here is somebody who spends a lot of his life chat in to

government. You would not be able to do your job if there was some

gatekeeper saying, you have already met the Leader of the Opposition

three times in the last seven months. How do you justified his? -

- justified this. It will not work anyway. People will get a round all

of this. Another thing that David Cameron did wrong was cover the

whole problem over. In the olden days if you have an inquiry, if you

send the people into the long grass. It is very dangerous. I wish it had

not happened. I do not think you can teach human beings morality.

Will it change the way you do your job? I suspect it might. But it

would be absurd if journalists cannot speak privately to

politicians. Four police officers. -- for police officers. This has

gone on for hundreds of years. There is a naivety that will be

driving the Levison inquiry. I keep on reading that voters are not

interested in this. I think historians will look back on this.

-- Leveson Inquiry. It will change the media culture in Britain. It

was out of control. Phone hacking remains extraordinary to me. It was

shocking. It was an industry that was partly out of control. It used

to be in control. That will change for ever. No journalists will do

this again. Politicians will be far more wary about dealing with

proprietors and editors. Rupert Murdoch's summer party is coming up

shortly. Half the Cabinet were there last year. None of them will

be there this year. that would be such a bad thing.

Newspaper proprietors and politicians have a lot to hide.

Unless the press are watching them and analysing. The people are going

to be left out of this incompletely. I am more interested about how this

will affect politician culture. I believe there has been far too much

stock in this relationship with the media. Everyone knew that after 18

years of Conservative Mac Power, at a time for change was coming. The

same happened in 1992. It was not because the Sun won it for them, it

is because the people it. We have been assaulted by newspapers for

the entire period. People may end up their mind irrespective of the

newspaper. Newspapers are still powerful mediators. People do not

watch newspapers -- politicians around the clock. It was an issue.

There is no question as to the powers of the newspaper. I think

that one of the problems here is the status of the media. There is

no proper Freedom of Information Act. The media is reduced to

competing for scandals and celebrity stories. There is no

sense that they are happier watchdog it. And we have a Freedom

of Information Act. What they were killing, the hacking of phones, was

wrong. I cannot understand why the Murdoch press seems to think that