:00:24. > :00:29.Hello and welcome to Dateline London.
:00:30. > :00:31.Do the little people pay a fair amount in taxes?
:00:32. > :00:33.And America's voters begin the long process
:00:34. > :00:35.of auditioning for the most powerful person on earth.
:00:36. > :00:37.My guests today are Michael Goldfarb of Politico Europe.
:00:38. > :00:41.Annalisa Piras, who is an Italian writer and filmmaker.
:00:42. > :00:42.Rashmee Roshan Lall, columnist for The National
:00:43. > :00:50.From a British perspective, reinventing the European Union
:00:51. > :00:53.is all about David Cameron obtaining concessions or otherwise,
:00:54. > :00:57.But there is a much bigger game being played, with discontent
:00:58. > :01:00.in southern Europe over immigration, lack of solidarity
:01:01. > :01:07.With border controls being re-imposed, Schengen damaged
:01:08. > :01:09.perhaps fatally, the Greek euro crisis still rumbling on,
:01:10. > :01:12.plus rows over immigration and benefits, is the European Union
:01:13. > :01:19.reinventing itself or facing possible collapse?
:01:20. > :01:25.there was a very interesting meeting the Queen Italy's Prime Minister and
:01:26. > :01:31.the Chancellor of Germany this week. The Italian Prime Minister has been
:01:32. > :01:35.saying, why do you ignore me, basically?! Is that the basic
:01:36. > :01:41.feeling, what Germany wants, Germany gets? Yes, and the big news is that
:01:42. > :01:46.this is over. Everybody has been taking Italy for granted for a long
:01:47. > :01:49.time. But the Prime Minister has found the confidence and the
:01:50. > :01:56.boldness to say enough is enough, you have been ignoring us for 20
:01:57. > :01:59.years, basically because in Rome Silvio Berlusconi was considered
:02:00. > :02:05.unpredictable, unreliable. For a very long time the third biggest
:02:06. > :02:10.economy in the eurozone, eighth in the world, has been ignored. The
:02:11. > :02:15.Prime Minister says enough is enough and now you have to talk with us.
:02:16. > :02:21.The German domination of the European Union is not acceptable.
:02:22. > :02:26.While everybody is actually starting to be more assertive with their
:02:27. > :02:31.national interests, Britain is starting but also other countries,
:02:32. > :02:33.Italy is doing the same but the big difference, which is important, is
:02:34. > :02:48.that Italy is a founding member of the European Union. The Italian
:02:49. > :02:49.would be hard-pressed to find any news about that big meeting in the
:02:50. > :02:57.British newspapers. I read about it in the New York Times. Is every
:02:58. > :03:01.European Union ultimately parochial? In Britain we care about is
:03:02. > :03:05.immigration and what is going to happen about benefits, we do not pay
:03:06. > :03:10.any attention to the bigger picture. This is the problem. It is true. Not
:03:11. > :03:15.every country is as parochial as Britain! Other newspapers have been
:03:16. > :03:20.talking about this, as well as other important things happening in
:03:21. > :03:28.Europe. Italy is trying to break this kind of introversion at the
:03:29. > :03:33.moment and say, hold on a minute, we need to change things. It is very
:03:34. > :03:45.relevant in terms of significance, the fact that today the Prime
:03:46. > :03:52.Minister went to the birth of the European Union. Mussolini sent the
:03:53. > :03:56.dissidents, most of them were left-wingers. They wrote the
:03:57. > :04:01.manifesto that is considered the ideal birth of Europe, the manifesto
:04:02. > :04:07.for Europe. He sees a possibility of revitalising it if you take a big
:04:08. > :04:13.player like Italy seriously? Yes, he wants to launch the European dream.
:04:14. > :04:18.Schengen, every week we report a temporary suspension of Schengen. It
:04:19. > :04:21.looks pretty permanent for a temporary suspension. We have all of
:04:22. > :04:25.these other problems which are partly being addressed. Do you think
:04:26. > :04:32.the European Union is almost on its way out? What the founding fathers
:04:33. > :04:35.wanted is not what is happening. It has narrowed, if you like, because
:04:36. > :04:39.of the rise of the populist right parties, whether it that be the
:04:40. > :04:44.National Front in France, which is leading in the opinion polls, the
:04:45. > :04:48.Scandinavian far right parties, which are doing well, Ukip here in
:04:49. > :04:55.Britain. But at the same time there are new movements on the left which
:04:56. > :04:59.are very critical, for example, in Greece. The way that Greece was
:05:00. > :05:05.treated caused huge bitterness across Europe amongst parties of the
:05:06. > :05:09.left. They are very critical of the sorts of devastating austerity
:05:10. > :05:14.policies inflicted on countries like Greece, Spain and Portugal. The
:05:15. > :05:22.answer that we are hearing in Britain is less Europe. Is that the
:05:23. > :05:27.answer? I think the longer you have got a lack of good news from the
:05:28. > :05:31.European Union and about the European Union, the longer it is
:05:32. > :05:37.perceived as undemocratic, as ossified, not value for money, the
:05:38. > :05:44.longer they will be disaffection, there will be this discontent.
:05:45. > :05:52.Exactly what I1 has been talking about. On Friday I was reading about
:05:53. > :05:57.this east London council which voted in favour of leaving the European
:05:58. > :05:59.Union. These ridiculous, farcical, Theatre of the absurd things are
:06:00. > :06:08.going to happen as euro scepticism grows. Yanis Varoufakis, the former
:06:09. > :06:20.Greek finance minister, is launching a new movement in Berlin, trying to
:06:21. > :06:25.marshal the left across Europe. Vara FAQ is's slogan is either
:06:26. > :06:33.democratisation or disintegration. -- viral factors. -- Yanis
:06:34. > :06:38.Varoufakis. The investment partnership which gives big
:06:39. > :06:43.corporation responsibility for policies in secret courts etc. There
:06:44. > :06:50.is the populist right focusing on refugees and migrants. There is an
:06:51. > :06:57.attempt at the moment to galvanise movements trying to change the
:06:58. > :07:01.European Union. If he is right, I think many people would see the
:07:02. > :07:08.forces of disintegration as greater than the ability to democratise
:07:09. > :07:12.European democracy. The least favourite part of my career for the
:07:13. > :07:19.last 25 years has been the ups and downs of the European Union. We are
:07:20. > :07:25.still in it. These discussions that we have are all so far above the
:07:26. > :07:33.realities that affect people's opinions and views. The European
:07:34. > :07:38.Union is built to deal with political and economic crises
:07:39. > :07:42.amongst this group of 28 nations by fudge. It is designed to never
:07:43. > :07:48.satisfy all parties. And those carry on. The problem has been in the last
:07:49. > :07:54.year in particular. It started in Italy. You had masses of boat people
:07:55. > :07:58.coming over from North Africa and ending up in Lampedusa, Italy was in
:07:59. > :08:04.the front line. Suddenly the migrant crisis, the crisis, shifted to the
:08:05. > :08:12.east. There are plans on Greece. It is a much bigger problem. And here
:08:13. > :08:19.we see when Angela Merkel said the solution for the problems of Europe
:08:20. > :08:22.was all Europe, in fact, if you're going to stay together, that is what
:08:23. > :08:27.it is going to be. People will regret very much the slow
:08:28. > :08:35.unravelling of Schengen. I think the regrets will stop at unravelling.
:08:36. > :08:47.The minute people have to go from France to Luxembourg showing papers,
:08:48. > :08:50.people will step back. Really? We will wait until the BBC commissions
:08:51. > :08:55.another series of the bridge and we will see how many people in Sweden
:08:56. > :09:00.and Denmark are having to flash their passports at! It is very sad
:09:01. > :09:06.that we are sitting your 25 years after Maastricht, which brought into
:09:07. > :09:09.being what we now know as the European Union, and these European
:09:10. > :09:14.countries, whatever level of partnership they agreed to, their
:09:15. > :09:21.destinies lie together. Geography decrees it. We're one continent,
:09:22. > :09:25.obviously. But the mistakes on defenders of the European Union make
:09:26. > :09:31.is that they are defensive of it in its current form. What has been
:09:32. > :09:35.frustrating from a British perspective is the criticism of the
:09:36. > :09:40.European Union have been left to right, and it has often been about
:09:41. > :09:44.migrants and the rest. There is an argument be made about democracy and
:09:45. > :09:50.accountability. Ukip should not be dominating that but people from a
:09:51. > :09:59.different direction. Democracy and accountability, let's start at home
:10:00. > :10:03.in the UK. Very few people say that the European Union as it is is good.
:10:04. > :10:06.There is no doubt that almost everybody that takes an interest in
:10:07. > :10:18.Europe knows that things need to change. Michael is right. The
:10:19. > :10:21.European Union is always preceded according to what the architect of
:10:22. > :10:24.the European Union said. People accept change only when they see the
:10:25. > :10:30.necessity of it. They see the necessity of it only when there is a
:10:31. > :10:35.crisis. The European Union say that Europe will be the result of Olic
:10:36. > :10:44.crises and it will change with each crisis. -- all of its crises. Europe
:10:45. > :10:50.is going to change. The really big question for all of us is, is it
:10:51. > :10:54.going to change as the populists or the Nationalists are going to put
:10:55. > :10:58.towards disintegration, or to a better, more democratic and
:10:59. > :11:01.accountable union? That is the responsibility of people who are
:11:02. > :11:04.progressive and on the left. I would like to move onto a related area.
:11:05. > :11:07.American businesswoman Leona Helmsley, a serial tax
:11:08. > :11:09.avoider, once claimed that only the little people pay taxes.
:11:10. > :11:11.Google, one of the Big People, announced this week
:11:12. > :11:14.that they are going to pay more tax in Britain.
:11:15. > :11:17.For little people paying tax is not like this -
:11:18. > :11:20.a matter of making announcements - but of the tax collectors making
:11:21. > :11:26.Is the worldwide system for taxing enormous corporations unworkable,
:11:27. > :11:38.It is a big European problem. We had the investigation into Luxembourg
:11:39. > :11:43.which suggested that Jean-Claude Juncker was part of the network
:11:44. > :11:47.which is allowing certain people to pay legally less tax than many
:11:48. > :11:53.people think they should. Absolutely. I was in Jersey of all
:11:54. > :12:00.places this week, which is notorious for being a tax haven. The OECD
:12:01. > :12:06.group of nations gathered this week and had an agreement, a very limited
:12:07. > :12:10.agreement, and transparency. We are having some movement. It has to be
:12:11. > :12:19.done internationally for this to work because of the activists. In
:12:20. > :12:23.Britain we have accountancy firms who are succumbed to the Treasury,
:12:24. > :12:27.helped draw up the tax laws, then tell their clients how to avoid the
:12:28. > :12:31.very laws they have helped to write in the first place. Can you imagine
:12:32. > :12:35.benefit claimants going to the Department for Work and Pensions and
:12:36. > :12:41.drawing applause on Social Security? Not a bad idea in some ways. --
:12:42. > :12:46.drawing up laws. We are talking of international tax havens, a lack of
:12:47. > :12:50.transparency. What we need is what the tax Justice network and others
:12:51. > :12:53.call country by country reporting. That is where companies are obliged
:12:54. > :13:00.to say in every country how much tax they are paying. The reason this is
:13:01. > :13:03.important is that these companies depend on the state infrastructure,
:13:04. > :13:08.law and order, an education system that trains their workforce,
:13:09. > :13:19.research and development etc. They depend on this state but they are
:13:20. > :13:22.multinational corporation, that is how much they were expected to pay
:13:23. > :13:28.by the British government. One government figure said the figures
:13:29. > :13:39.were confidential and would not confirm the 3%. Italy did better
:13:40. > :13:44.this time. The problem is about governments and how they apply the
:13:45. > :13:48.laws. You do not need to change the laws in Europe necessarily to make
:13:49. > :13:53.corporations pay. Certainly an agreement at a European level would
:13:54. > :13:59.be very desirable. The commission estimates that tax evasion is about
:14:00. > :14:05.E1 trillion. Can you imagine what you could have done with that
:14:06. > :14:12.instead of austerity cuts? The core of this is that if you are running a
:14:13. > :14:18.big company, I talked to see EEO 1-2 said it was his traditionally
:14:19. > :14:24.responsibility to maximise profits. -- I talked to a CEO who said.
:14:25. > :14:30.Absolutely. The minute we talk about this Google tax, Eric Schmidt said a
:14:31. > :14:33.couple of years ago, the US senator at that time issued this report
:14:34. > :14:38.complaining about the fact that Apple was undermining the fairness
:14:39. > :14:42.of the US tax regime. Eric Schmidt was here in London and he said, no
:14:43. > :14:48.computer scientist is ever going to design an international tax regime
:14:49. > :14:52.as bad as the one that exists. It is not up to companies to really run
:14:53. > :14:55.around trying to get governments to take their money. It is for
:14:56. > :15:04.governments to do it. Governments don't want to do it. It is a cliche
:15:05. > :15:13.to say it, but it is true... It is not just a European company at all.
:15:14. > :15:19.Even moderate sized companies in the US are looking for Irish -based
:15:20. > :15:24.corporations to buy them. If your headquarters is in Ireland you will
:15:25. > :15:29.pay corporation tax and an Irish rate which is lower than the 15% you
:15:30. > :15:36.just mentioned in Italy. You will have governments desperately
:15:37. > :15:41.competing to lower business tax. Joseph Stiglitz says that it is of
:15:42. > :15:49.two politicians to accept that the legal fiction of multinationals not
:15:50. > :15:53.being single entities, they act like single entities, you have got to
:15:54. > :16:01.say, listen, this is a fiction that we are not going to buy any more.
:16:02. > :16:08.The point you made about traditionally responsibility for
:16:09. > :16:11.shareholders. The company also has responsibility to the community.
:16:12. > :16:15.That includes at the time of swingeing cuts when hundreds of
:16:16. > :16:21.billions of pounds across Europe are being cut from Social Security etc
:16:22. > :16:25.on the basis there is not enough money. Small businesses, they cannot
:16:26. > :16:30.afford accountants who can find any loophole in the law. They are
:16:31. > :16:35.expected to pay their taxes. They are at a competitive disadvantage to
:16:36. > :16:39.these multinational corporations exploiting any possible loophole. I
:16:40. > :16:45.know what you're saying about business responsibility but surely
:16:46. > :16:50.the buck stops governments. It is both. Some companies choose not to
:16:51. > :16:55.avoid tax. It is not like they are forced to. They have a gun to their
:16:56. > :16:58.head. We have other companies who reap their sales through Ireland
:16:59. > :17:02.even when their sales are taking place in Britain, where they charge
:17:03. > :17:06.themselves for using their own logo, so they borrow money from
:17:07. > :17:09.themselves. They get losses abroad and put them onto their balance
:17:10. > :17:18.sheet in Britain when they are actually making money here.
:17:19. > :17:24.Jean-Claude Juncker has promised that he is going to change it. We
:17:25. > :17:29.need to read the press -- raise the pressure all over Europe frame to
:17:30. > :17:32.keep his promise. Ireland has benefited massively from the
:17:33. > :17:36.European Union. They need to stop doing this tax competition with
:17:37. > :17:41.other countries. We need to get to the point where it is not that easy
:17:42. > :17:47.to go to Ireland. It is more than Ireland. Nepal has 5%. It is not
:17:48. > :17:53.like everybody's rushing to become a corporate entity there. It is really
:17:54. > :17:56.about highlighting the ethical dubiousness of not paying your fair
:17:57. > :17:59.share when you can afford it. In a world that is full of idealistic
:18:00. > :18:07.young people who expect people to pay their way... Nobody is 20 stop
:18:08. > :18:16.buying Apple products because they stop paying their taxes. -- is going
:18:17. > :18:21.to stop. It is not just about young people. Most people resent the fact
:18:22. > :18:25.they have to pay their taxes when they are nowhere near as rich as
:18:26. > :18:29.these wealthy individuals and big corporations who are simply not
:18:30. > :18:33.contributing. I think that sense of wonder and other top and one rule
:18:34. > :18:35.for everybody else, there is a lot of anger about that not just among
:18:36. > :18:37.you -- young idealists. The first real tests of US voter
:18:38. > :18:40.opinion in the presidential race kicks off in a few days in Iowa,
:18:41. > :18:43.and then New Hampshire. Should we marvel at the splendour
:18:44. > :18:46.of American democracy, or wonder why the most powerful
:18:47. > :18:49.nation on earth chooses presidents using a system designed for the era
:18:50. > :19:02.of horse drawn buggies and carts? Iowa is a lovely place but it is an
:19:03. > :19:09.odd place to start to choose the president was --. It is. Can you
:19:10. > :19:27.remember the last two winners of the Iowa caucus? No.
:19:28. > :19:39.The thing is, this year old rules, everything you learn from history
:19:40. > :19:45.and when you are their, are off the table. -- when you were a
:19:46. > :19:51.correspondent there. It is the strangest mood in the country, the
:19:52. > :19:56.most divided country I can remember since 1968. But in 1968 there were
:19:57. > :20:02.two clear issues. There was race and the war in Vietnam. You can see why
:20:03. > :20:06.the country was divided. This is more existential, the division. You
:20:07. > :20:11.have people who have been bypassed for the last 20, 30 years,
:20:12. > :20:17.economically. Some of them are lining up for Donald Trump, some for
:20:18. > :20:21.Bernie Sanders. They are neighbours. They have the same grievances. How
:20:22. > :20:26.can you reach such a radically different conclusions on where you
:20:27. > :20:33.want to go politically? All bets are off. What happens in Iowa on Monday
:20:34. > :20:36.in a sense does not matter. But what seems likely, on the soundings I
:20:37. > :20:40.managed to take, is that Donald Trump is a for real thing and while
:20:41. > :20:47.everybody around the world is laughing, he will be a force all the
:20:48. > :20:52.way through the Republican nominating process. The Democratic
:20:53. > :21:03.nominating process is far from clear. You are not laughing. I will
:21:04. > :21:06.not love. I would go back to 1968. The two nominees coming out of Iowa
:21:07. > :21:11.would have been clearer. Lyndon Baines Johnson was going to run for
:21:12. > :21:17.the Democrats and Richard Nixon. But the end of March, Lyndon Johnson had
:21:18. > :21:23.withdrawn because of the terrible things that had happened in Vietnam.
:21:24. > :21:27.Bobby Kennedy was shot in June. Nobody knew what was going to
:21:28. > :21:30.happen. I have a feeling that we are in for a similar picture this year.
:21:31. > :21:34.And that over the next six months and eating that we say on this
:21:35. > :21:43.programme on a Saturday will not hold onto Wednesday of the following
:21:44. > :21:50.week. It is quite extraordinary as spectators sitting 3000 miles away.
:21:51. > :21:53.It is really scary. To me it reminds me of when Berlusconi arrived.
:21:54. > :21:57.Everybody was laughing and nobody was laughing any more. He lasted 20
:21:58. > :22:03.years. To imagine that something similar could happen in America, so
:22:04. > :22:08.the most powerful man in the word could be someone like Donald Trump,
:22:09. > :22:12.is terrifying. What I do not understand is how is it possible
:22:13. > :22:17.that somebody who keeps inciting racial hatred, who keeps talking
:22:18. > :22:23.about really hate between people, is allowed for a -- to run for public
:22:24. > :22:31.office. Shouldn't there be some kind of on written or written rule that
:22:32. > :22:36.this can -- simply cannot happen. Freedom of speech. I talked to many
:22:37. > :22:40.Americans who say that he says the things many people think because of
:22:41. > :22:44.the recent you suggested. It is good for democracy because otherwise you
:22:45. > :22:49.bottle it up and that is one of the great things about American
:22:50. > :22:54.democracy. You confront the very worst that is within you. And then
:22:55. > :22:58.you come together and try to defeat it. What we are seeing is the battle
:22:59. > :23:04.of establishment candidates against the insurgents on both sides. Bernie
:23:05. > :23:09.Sanders is an insurgent and so is Donald Trump. It is a symptom of the
:23:10. > :23:13.fact the American political elite has disastrously failed the American
:23:14. > :23:18.people. If we look at the wage packets of Americans, they are
:23:19. > :23:25.flat-lining, they have been falling for years. The economic recovery has
:23:26. > :23:30.not materialised. Across the western world at the moment you have got
:23:31. > :23:35.lots of discontent, a fever on mood. It is either a populist, xenophobic
:23:36. > :23:38.right, or a new movement in the left were the beneficiaries. In the US
:23:39. > :23:43.that is Donald Trump and Bernie Sanders. Donald Trump we keep
:23:44. > :23:47.talking about. He is dangerous because he shifts what is seen as
:23:48. > :23:51.extreme. What is frightening about him is politicians we normally
:23:52. > :23:56.regard as quite extreme suddenly seem less so in comparison. We have
:23:57. > :24:01.not spoken enough about Bernie Saunders. This is a 74-year-old
:24:02. > :24:05.Jewish self-described socialist from Vermont who is taking on the Clinton
:24:06. > :24:11.machine. He is the other side of the discontent we are seeing in the US.
:24:12. > :24:16.He is in a dead heat with her in Iowa. He has a substantial lead in
:24:17. > :24:22.New Hampshire. American politics is the brother indeed. What we are
:24:23. > :24:35.seeing is a cry of anguish on behalf of of
:24:36. > :24:42.you would have said that makes it unelectable, he comes from Vermont,
:24:43. > :24:48.he is socialist... I would still say that. But I'm increasingly having to
:24:49. > :24:54.revise my opinion by Wednesday, as I said. He is smart. The thing about
:24:55. > :25:00.Bernie Saunders, like a lot of hippies, he goes to Vermont, get
:25:01. > :25:04.back to the land. He decides he is going to get into politics. If you
:25:05. > :25:12.had any idea how remarkable it is for a Brooklyn Jew in 1978, 79, to
:25:13. > :25:15.successfully become the mayor Burlington, Vermont, you will
:25:16. > :25:21.understand there is more to him than just speaking to the discontent. He
:25:22. > :25:25.is a skilled politician. Some of his campaign ads you think, I have not
:25:26. > :25:31.seen anything like that since Bill Clinton in 1992. This guy is sharp.
:25:32. > :25:36.He can find his pitch. He has done it week by week. He has not broken
:25:37. > :25:41.on the rocks. He is not repeating himself. You do not get to be where
:25:42. > :25:47.he comes from and BB senator from Vermont without being a good
:25:48. > :25:52.politician. Isn't it a sense of authenticity? Cure part of the
:25:53. > :25:58.system, you are damaged. -- you are apart. Both Tromp and Saunders
:25:59. > :26:07.seemed to say what politicians do not. When he comes out on stage, he
:26:08. > :26:15.is not politically correct. There is a yearning in America for people to
:26:16. > :26:21.do that. Bernie Sanders's campaign is phenomenal. He has not relied on
:26:22. > :26:25.big-money. It is a grassroots led campaign.
:26:26. > :26:27.That's it for Dateline London for this week.
:26:28. > :26:29.You can comment on the programme on Twitter @gavinesler.
:26:30. > :26:32.We're back next week at the same time.