30/01/2016 Dateline London

Hello and welcome to Dateline London.

Do the little people pay a fair amount in taxes?

And America's voters begin the long process

of auditioning for the most powerful person on earth.

My guests today are Michael Goldfarb of Politico Europe.

Annalisa Piras, who is an Italian writer and filmmaker.

Rashmee Roshan Lall, columnist for The National

From a British perspective, reinventing the European Union

is all about David Cameron obtaining concessions or otherwise,

But there is a much bigger game being played, with discontent

in southern Europe over immigration, lack of solidarity

With border controls being re-imposed, Schengen damaged

perhaps fatally, the Greek euro crisis still rumbling on,

plus rows over immigration and benefits, is the European Union

reinventing itself or facing possible collapse?

there was a very interesting meeting the Queen Italy's Prime Minister and

the Chancellor of Germany this week. The Italian Prime Minister has been

saying, why do you ignore me, basically?! Is that the basic

feeling, what Germany wants, Germany gets? Yes, and the big news is that

this is over. Everybody has been taking Italy for granted for a long

time. But the Prime Minister has found the confidence and the

boldness to say enough is enough, you have been ignoring us for 20

years, basically because in Rome Silvio Berlusconi was considered

unpredictable, unreliable. For a very long time the third biggest

economy in the eurozone, eighth in the world, has been ignored. The

Prime Minister says enough is enough and now you have to talk with us.

The German domination of the European Union is not acceptable.

While everybody is actually starting to be more assertive with their

national interests, Britain is starting but also other countries,

Italy is doing the same but the big difference, which is important, is

that Italy is a founding member of the European Union. The Italian

would be hard-pressed to find any news about that big meeting in the

British newspapers. I read about it in the New York Times. Is every

European Union ultimately parochial? In Britain we care about is

immigration and what is going to happen about benefits, we do not pay

any attention to the bigger picture. This is the problem. It is true. Not

every country is as parochial as Britain! Other newspapers have been

talking about this, as well as other important things happening in

Europe. Italy is trying to break this kind of introversion at the

moment and say, hold on a minute, we need to change things. It is very

relevant in terms of significance, the fact that today the Prime

Minister went to the birth of the European Union. Mussolini sent the

dissidents, most of them were left-wingers. They wrote the

manifesto that is considered the ideal birth of Europe, the manifesto

for Europe. He sees a possibility of revitalising it if you take a big

player like Italy seriously? Yes, he wants to launch the European dream.

Schengen, every week we report a temporary suspension of Schengen. It

looks pretty permanent for a temporary suspension. We have all of

these other problems which are partly being addressed. Do you think

the European Union is almost on its way out? What the founding fathers

wanted is not what is happening. It has narrowed, if you like, because

of the rise of the populist right parties, whether it that be the

National Front in France, which is leading in the opinion polls, the

Scandinavian far right parties, which are doing well, Ukip here in

Britain. But at the same time there are new movements on the left which

are very critical, for example, in Greece. The way that Greece was

treated caused huge bitterness across Europe amongst parties of the

left. They are very critical of the sorts of devastating austerity

policies inflicted on countries like Greece, Spain and Portugal. The

answer that we are hearing in Britain is less Europe. Is that the

answer? I think the longer you have got a lack of good news from the

European Union and about the European Union, the longer it is

perceived as undemocratic, as ossified, not value for money, the

longer they will be disaffection, there will be this discontent.

Exactly what I1 has been talking about. On Friday I was reading about

this east London council which voted in favour of leaving the European

Union. These ridiculous, farcical, Theatre of the absurd things are

going to happen as euro scepticism grows. Yanis Varoufakis, the former

Greek finance minister, is launching a new movement in Berlin, trying to

marshal the left across Europe. Vara FAQ is's slogan is either

democratisation or disintegration. -- viral factors. -- Yanis

Varoufakis. The investment partnership which gives big

corporation responsibility for policies in secret courts etc. There

is the populist right focusing on refugees and migrants. There is an

attempt at the moment to galvanise movements trying to change the

European Union. If he is right, I think many people would see the

forces of disintegration as greater than the ability to democratise

European democracy. The least favourite part of my career for the

last 25 years has been the ups and downs of the European Union. We are

still in it. These discussions that we have are all so far above the

realities that affect people's opinions and views. The European

Union is built to deal with political and economic crises

amongst this group of 28 nations by fudge. It is designed to never

satisfy all parties. And those carry on. The problem has been in the last

year in particular. It started in Italy. You had masses of boat people

coming over from North Africa and ending up in Lampedusa, Italy was in

the front line. Suddenly the migrant crisis, the crisis, shifted to the

east. There are plans on Greece. It is a much bigger problem. And here

we see when Angela Merkel said the solution for the problems of Europe

was all Europe, in fact, if you're going to stay together, that is what

it is going to be. People will regret very much the slow

unravelling of Schengen. I think the regrets will stop at unravelling.

The minute people have to go from France to Luxembourg showing papers,

people will step back. Really? We will wait until the BBC commissions

another series of the bridge and we will see how many people in Sweden

and Denmark are having to flash their passports at! It is very sad

that we are sitting your 25 years after Maastricht, which brought into

being what we now know as the European Union, and these European

countries, whatever level of partnership they agreed to, their

destinies lie together. Geography decrees it. We're one continent,

obviously. But the mistakes on defenders of the European Union make

is that they are defensive of it in its current form. What has been

frustrating from a British perspective is the criticism of the

European Union have been left to right, and it has often been about

migrants and the rest. There is an argument be made about democracy and

accountability. Ukip should not be dominating that but people from a

different direction. Democracy and accountability, let's start at home

in the UK. Very few people say that the European Union as it is is good.

There is no doubt that almost everybody that takes an interest in

Europe knows that things need to change. Michael is right. The

European Union is always preceded according to what the architect of

the European Union said. People accept change only when they see the

necessity of it. They see the necessity of it only when there is a

crisis. The European Union say that Europe will be the result of Olic

crises and it will change with each crisis. -- all of its crises. Europe

is going to change. The really big question for all of us is, is it

going to change as the populists or the Nationalists are going to put

towards disintegration, or to a better, more democratic and

accountable union? That is the responsibility of people who are

progressive and on the left. I would like to move onto a related area.

American businesswoman Leona Helmsley, a serial tax

avoider, once claimed that only the little people pay taxes.

Google, one of the Big People, announced this week

that they are going to pay more tax in Britain.

For little people paying tax is not like this -

a matter of making announcements - but of the tax collectors making

Is the worldwide system for taxing enormous corporations unworkable,

It is a big European problem. We had the investigation into Luxembourg

which suggested that Jean-Claude Juncker was part of the network

which is allowing certain people to pay legally less tax than many

people think they should. Absolutely. I was in Jersey of all

places this week, which is notorious for being a tax haven. The OECD

group of nations gathered this week and had an agreement, a very limited

agreement, and transparency. We are having some movement. It has to be

done internationally for this to work because of the activists. In

Britain we have accountancy firms who are succumbed to the Treasury,

helped draw up the tax laws, then tell their clients how to avoid the

very laws they have helped to write in the first place. Can you imagine

benefit claimants going to the Department for Work and Pensions and

drawing applause on Social Security? Not a bad idea in some ways. --

drawing up laws. We are talking of international tax havens, a lack of

transparency. What we need is what the tax Justice network and others

call country by country reporting. That is where companies are obliged

to say in every country how much tax they are paying. The reason this is

important is that these companies depend on the state infrastructure,

law and order, an education system that trains their workforce,

research and development etc. They depend on this state but they are

multinational corporation, that is how much they were expected to pay

by the British government. One government figure said the figures

were confidential and would not confirm the 3%. Italy did better

this time. The problem is about governments and how they apply the

laws. You do not need to change the laws in Europe necessarily to make

corporations pay. Certainly an agreement at a European level would

be very desirable. The commission estimates that tax evasion is about

E1 trillion. Can you imagine what you could have done with that

instead of austerity cuts? The core of this is that if you are running a

big company, I talked to see EEO 1-2 said it was his traditionally

responsibility to maximise profits. -- I talked to a CEO who said.

Absolutely. The minute we talk about this Google tax, Eric Schmidt said a

couple of years ago, the US senator at that time issued this report

complaining about the fact that Apple was undermining the fairness

of the US tax regime. Eric Schmidt was here in London and he said, no

computer scientist is ever going to design an international tax regime

as bad as the one that exists. It is not up to companies to really run

around trying to get governments to take their money. It is for

governments to do it. Governments don't want to do it. It is a cliche

to say it, but it is true... It is not just a European company at all.

Even moderate sized companies in the US are looking for Irish -based

corporations to buy them. If your headquarters is in Ireland you will

pay corporation tax and an Irish rate which is lower than the 15% you

just mentioned in Italy. You will have governments desperately

competing to lower business tax. Joseph Stiglitz says that it is of

two politicians to accept that the legal fiction of multinationals not

being single entities, they act like single entities, you have got to

say, listen, this is a fiction that we are not going to buy any more.

The point you made about traditionally responsibility for

shareholders. The company also has responsibility to the community.

That includes at the time of swingeing cuts when hundreds of

billions of pounds across Europe are being cut from Social Security etc

on the basis there is not enough money. Small businesses, they cannot

afford accountants who can find any loophole in the law. They are

expected to pay their taxes. They are at a competitive disadvantage to

these multinational corporations exploiting any possible loophole. I

know what you're saying about business responsibility but surely

the buck stops governments. It is both. Some companies choose not to

avoid tax. It is not like they are forced to. They have a gun to their

head. We have other companies who reap their sales through Ireland

even when their sales are taking place in Britain, where they charge

themselves for using their own logo, so they borrow money from

themselves. They get losses abroad and put them onto their balance

sheet in Britain when they are actually making money here.

Jean-Claude Juncker has promised that he is going to change it. We

need to read the press -- raise the pressure all over Europe frame to

keep his promise. Ireland has benefited massively from the

European Union. They need to stop doing this tax competition with

other countries. We need to get to the point where it is not that easy

to go to Ireland. It is more than Ireland. Nepal has 5%. It is not

like everybody's rushing to become a corporate entity there. It is really

about highlighting the ethical dubiousness of not paying your fair

share when you can afford it. In a world that is full of idealistic

young people who expect people to pay their way... Nobody is 20 stop

buying Apple products because they stop paying their taxes. -- is going

to stop. It is not just about young people. Most people resent the fact

they have to pay their taxes when they are nowhere near as rich as

these wealthy individuals and big corporations who are simply not

contributing. I think that sense of wonder and other top and one rule

for everybody else, there is a lot of anger about that not just among

you -- young idealists. The first real tests of US voter

opinion in the presidential race kicks off in a few days in Iowa,

and then New Hampshire. Should we marvel at the splendour

of American democracy, or wonder why the most powerful

nation on earth chooses presidents using a system designed for the era

of horse drawn buggies and carts? Iowa is a lovely place but it is an

odd place to start to choose the president was --. It is. Can you

remember the last two winners of the Iowa caucus? No.

The thing is, this year old rules, everything you learn from history

and when you are their, are off the table. -- when you were a

correspondent there. It is the strangest mood in the country, the

most divided country I can remember since 1968. But in 1968 there were

two clear issues. There was race and the war in Vietnam. You can see why

the country was divided. This is more existential, the division. You

have people who have been bypassed for the last 20, 30 years,

economically. Some of them are lining up for Donald Trump, some for

Bernie Sanders. They are neighbours. They have the same grievances. How

can you reach such a radically different conclusions on where you

want to go politically? All bets are off. What happens in Iowa on Monday

in a sense does not matter. But what seems likely, on the soundings I

managed to take, is that Donald Trump is a for real thing and while

everybody around the world is laughing, he will be a force all the

way through the Republican nominating process. The Democratic

nominating process is far from clear. You are not laughing. I will

not love. I would go back to 1968. The two nominees coming out of Iowa

would have been clearer. Lyndon Baines Johnson was going to run for

the Democrats and Richard Nixon. But the end of March, Lyndon Johnson had

withdrawn because of the terrible things that had happened in Vietnam.

Bobby Kennedy was shot in June. Nobody knew what was going to

happen. I have a feeling that we are in for a similar picture this year.

And that over the next six months and eating that we say on this

programme on a Saturday will not hold onto Wednesday of the following

week. It is quite extraordinary as spectators sitting 3000 miles away.

It is really scary. To me it reminds me of when Berlusconi arrived.

Everybody was laughing and nobody was laughing any more. He lasted 20

years. To imagine that something similar could happen in America, so

the most powerful man in the word could be someone like Donald Trump,

is terrifying. What I do not understand is how is it possible

that somebody who keeps inciting racial hatred, who keeps talking

about really hate between people, is allowed for a -- to run for public

office. Shouldn't there be some kind of on written or written rule that

this can -- simply cannot happen. Freedom of speech. I talked to many

Americans who say that he says the things many people think because of

the recent you suggested. It is good for democracy because otherwise you

bottle it up and that is one of the great things about American

democracy. You confront the very worst that is within you. And then

you come together and try to defeat it. What we are seeing is the battle

of establishment candidates against the insurgents on both sides. Bernie

Sanders is an insurgent and so is Donald Trump. It is a symptom of the

fact the American political elite has disastrously failed the American

people. If we look at the wage packets of Americans, they are

flat-lining, they have been falling for years. The economic recovery has

not materialised. Across the western world at the moment you have got

lots of discontent, a fever on mood. It is either a populist, xenophobic

right, or a new movement in the left were the beneficiaries. In the US

that is Donald Trump and Bernie Sanders. Donald Trump we keep

talking about. He is dangerous because he shifts what is seen as

extreme. What is frightening about him is politicians we normally

regard as quite extreme suddenly seem less so in comparison. We have

not spoken enough about Bernie Saunders. This is a 74-year-old

Jewish self-described socialist from Vermont who is taking on the Clinton

machine. He is the other side of the discontent we are seeing in the US.

He is in a dead heat with her in Iowa. He has a substantial lead in

New Hampshire. American politics is the brother indeed. What we are

seeing is a cry of anguish on behalf of of

you would have said that makes it unelectable, he comes from Vermont,

he is socialist... I would still say that. But I'm increasingly having to

revise my opinion by Wednesday, as I said. He is smart. The thing about

Bernie Saunders, like a lot of hippies, he goes to Vermont, get

back to the land. He decides he is going to get into politics. If you

had any idea how remarkable it is for a Brooklyn Jew in 1978, 79, to

successfully become the mayor Burlington, Vermont, you will

understand there is more to him than just speaking to the discontent. He

is a skilled politician. Some of his campaign ads you think, I have not

seen anything like that since Bill Clinton in 1992. This guy is sharp.

He can find his pitch. He has done it week by week. He has not broken

on the rocks. He is not repeating himself. You do not get to be where

he comes from and BB senator from Vermont without being a good

politician. Isn't it a sense of authenticity? Cure part of the

system, you are damaged. -- you are apart. Both Tromp and Saunders

seemed to say what politicians do not. When he comes out on stage, he

is not politically correct. There is a yearning in America for people to

do that. Bernie Sanders's campaign is phenomenal. He has not relied on

big-money. It is a grassroots led campaign.

That's it for Dateline London for this week.

You can comment on the programme on Twitter @gavinesler.

We're back next week at the same time.