:00:08. > :00:12.may be of little comfort that Tonight on Newsnight Scotland:
:00:13. > :00:15.We will have more on the crisis in the eurozone. One way or another
:00:15. > :00:19.the European Union has dominated debate both across the UK generally
:00:19. > :00:23.and here in Scotland for the last 30 years. But is tonight the night
:00:23. > :00:27.the European ideal meets its doom? And this evening the Occupy Glasgow
:00:27. > :00:30.protesters in George Square voted to move to Kelvingrove Park. We
:00:30. > :00:34.have been down to the camp to find out if their message is getting
:00:34. > :00:36.through. Good evening. The current crisis
:00:36. > :00:39.may seem rather abstract as European leaders argue about
:00:39. > :00:43.'haircuts' on debt and a Greek referendum, but the consequences of
:00:43. > :00:46.jitters in our key export market will be felt here all too soon.
:00:46. > :00:51.What makes the eurozone crisis so confusing is that it's actually
:00:51. > :00:54.several crises rolled into one. And even if one crisis is resolved, it
:00:54. > :01:04.doesn't mean the others are, too. And to make matters worse, they are
:01:04. > :01:08.
:01:08. > :01:15.all intimately connected. The headline crisis is in Greece.
:01:15. > :01:19.The EU's deal last week may right up enough of its debt to allow the
:01:19. > :01:24.country to stay afloat, but they will still face years of savage
:01:24. > :01:28.austerity. The trouble is that the proposed referendum introduces
:01:28. > :01:32.complications no-one was expecting. The Greek people might turn out the
:01:32. > :01:36.deal. Even if they don't, Greece could run out of money and
:01:36. > :01:40.credibility. In the worst-case scenario, Greece will simply
:01:40. > :01:45.default on its debt. That means banks and government who have lent
:01:45. > :01:51.to it could lose all their money and that leads us to the next
:01:51. > :01:57.problem. The nightmare is that some European banks which have lent
:01:57. > :02:01.heavily to Greece could go bust, or lose all credibility, triggering an
:02:01. > :02:08.crumbs, as happened to Northern Rock. No-one wants another banking
:02:08. > :02:17.crisis. Remember what happened at - - happened after Lehman Brothers
:02:17. > :02:21.went down? There is a feeling of that many European banks have not
:02:21. > :02:29.given a full account of themselves. Take this bank which has been
:02:29. > :02:33.nationalised. A few weeks before it went belly up, it passed stress
:02:33. > :02:40.tests set by the European Union with flying colours. That brings us
:02:40. > :02:44.to the next problem. If banks start failing, only estates can guarantee
:02:44. > :02:49.their survival. So what happens if these they've run out of money?
:02:49. > :02:55.That is what has happened in Ireland where public finances are
:02:55. > :03:01.in the hands of the EU and the IMF. It has happened in Greece where the
:03:01. > :03:05.public finances have been an MS for years. So, where next? Some
:03:05. > :03:09.countries have a liquidity problem and some countries have a solvent
:03:09. > :03:14.problem. Without the bail-out, Greece would probably not be able
:03:14. > :03:20.to pay off its debt. That is a solvency problem. In Italy the
:03:20. > :03:26.country is solvent, but because of panic in the markets, it elite is
:03:26. > :03:33.having problems raising money. That is a liquidity programme. Confused?
:03:33. > :03:37.Join the crowd. At the beginning of the financial crisis in 2008, the
:03:37. > :03:44.ball told but banks have liquidity problems and not solvency problems,
:03:44. > :03:51.until they started going bust. To head of the crisis the eurozone
:03:51. > :03:55.countries will have to commit a limitless amounts of money. Doing
:03:55. > :04:01.there would guarantee but it default would not happen. The money
:04:01. > :04:05.committed to be eurozone bail-out fund is not enough, say some
:04:05. > :04:14.economists. Each element of the bail-out fund is affected through
:04:14. > :04:19.the mechanism of the financial markets to every other. As they say
:04:19. > :04:22.in Cannes, bonne chance. I'm joined from London by the
:04:22. > :04:25.former chair of the Treasury Select Committee Lord McFall, from
:04:25. > :04:27.Edinburgh by the Executive Editor of the Scotsman Bill Jamieson and
:04:27. > :04:30.here in the studio by the economics commentator, Alf Young. Standing
:04:30. > :04:39.back from this immediate situation we are facing tonight in Greece
:04:39. > :04:43.just a little bit, do you think this is an Exocet still --
:04:43. > :04:48.existential crisis? We are on the edge off a precipice. No-one can
:04:48. > :04:53.deny that now after the announcement by the Greek
:04:53. > :04:58.government of the proposed referendum. The possibility of that
:04:58. > :05:03.been a No vote will be a boat for police to exit the euro. It could
:05:03. > :05:08.not remain in the euro after voting know. The it is also difficult to
:05:08. > :05:14.imagine circumstances which it could vote No and leave the
:05:14. > :05:19.eurozone and not immediately default on all its debts.
:05:19. > :05:29.Absolutely. That is the number one worry. The emphasis is on how you
:05:29. > :05:34.
:05:34. > :05:38.can have a eight policy contagion that could affect Italy. It takes
:05:38. > :05:44.us right back to the 1930s and we are thinking in large terms about
:05:44. > :05:50.what has to be done on a global basis the to beat this. Even the
:05:50. > :06:00.attitude of the rest of the US- owned to graze his ambiguous. Some
:06:00. > :06:03.
:06:03. > :06:07.are saying that Papandreou is playing a clever game. There are
:06:07. > :06:11.rumours and signs that the eurozone might decide that Greece is out and
:06:11. > :06:21.they will give up on it. That will concentrate on how to protect the
:06:21. > :06:26.
:06:26. > :06:30.rest of the EU. It is still very difficult. It and it -- at the
:06:30. > :06:40.heart of the year was so there is the ongoing crisis of how are we
:06:40. > :06:46.
:06:46. > :06:53.going to have this financial stability implemented? -- eurozone.
:06:53. > :06:59.Will the Chinese come in? There is also the unresolved issue of what
:06:59. > :07:06.the European Central Bank players in all of this, whether it is doing
:07:06. > :07:11.anything, or is it still a safe got on inflation, as the Germans see it.
:07:11. > :07:15.It is a critical part of the story because it had not been resolved.
:07:15. > :07:21.Fundamentally, people talking about going back to the 1930s, we have a
:07:21. > :07:29.problem with leadership, both within the eurozone and I suspect
:07:29. > :07:37.at Cannes as well. This is starting to look chaotic. We're getting all
:07:37. > :07:42.sorts of threats. Angela Merkel and Sarkozy has suggested they will not
:07:42. > :07:47.authorised the payment of the next 8 billion euros of the existing
:07:47. > :07:53.bail-out funds agrees. But degrees are depending on their to pay civil
:07:53. > :08:00.servants wages. This is getting quite nasty. Be is really nasty.
:08:00. > :08:04.Tonight I met a prominent economist on the Scottish government's
:08:04. > :08:08.Council of economic advisers. I cannot name him because it was an
:08:08. > :08:13.informal conversation. I asked him about the future and he said he was
:08:13. > :08:23.scared. People do not know where they are going and I'd been the
:08:23. > :08:24.
:08:24. > :08:34.European Union should be planning at the moment for Greece coming out
:08:34. > :08:35.
:08:35. > :08:45.of the eurozone. In doing so, we must guard against contagion here.
:08:45. > :08:48.
:08:48. > :08:58.It is the immediacy of things. The Dutch have said if the Greeks are
:08:58. > :09:02.
:09:02. > :09:08.having a referendum, we are not bound by the terms of the deal. For
:09:08. > :09:11.example, if been learnt cent you are having a referendum on whether
:09:11. > :09:19.or not to accept our money, we can have a referendum on whether we
:09:19. > :09:24.would give it to you. It is getting chaotic. It is. People need to keep
:09:24. > :09:34.their heads. There's no point in retaliating. We are all in it
:09:34. > :09:37.together. 60 % of our exports go to Europe. For the UK that is �160
:09:37. > :09:41.billion. Then is to be time to reflect. We need to keep the euro
:09:41. > :09:50.together because I can't imagine what it will be like if that went.
:09:50. > :10:00.It has got to be kept together. We have to sacrifice and it we have to
:10:00. > :10:06.sacrifice Greece, in these to be done in an orderly way. -- it needs
:10:06. > :10:11.to be done in an orderly way. There is a huge problem, but people need
:10:11. > :10:15.to keep their heads and say, what are the main issues. The eurozone
:10:15. > :10:19.is to be kept together. I don't want to make a bad situation sound
:10:19. > :10:24.worse, but even if you could quarantine the Greek situation, a
:10:24. > :10:30.lot of people are sceptical about this bail-out, as was agreed last
:10:31. > :10:38.week, even without grease been part of it. People are concerned about
:10:38. > :10:43.the circularity. The markets are concerned about the Italian bonds.
:10:43. > :10:48.Nation by nation, Italy is responsible for 18 %. If you are an
:10:48. > :10:58.investor, why should you take any more seriously and Italian at bail-
:10:58. > :11:03.
:11:03. > :11:08.out fan -- bail-out funds over at the Italian debt. I would take
:11:08. > :11:12.issue with Lord McFall because I do not think the primary issue it is
:11:12. > :11:16.saving the integrity of the eurozone. The primary issue is
:11:16. > :11:21.avoiding an almighty financial crisis, which could unfold during
:11:21. > :11:26.weeks, leading to a second great depression. If the price of trying
:11:26. > :11:36.to avoid that is Greece leaving the eurozone, it is a price worth
:11:36. > :11:38.
:11:38. > :11:44.At some point the European Central Bank has to become a bank of last
:11:44. > :11:48.resort. I think so, but it has to overcome that great German folk
:11:48. > :11:54.memory of what happened the last time the central bank resorted to
:11:54. > :11:58.printing money. I think this is a step that has to be taken, and if
:11:58. > :12:02.that cannot be done then we have to think as I was saying earlier on
:12:03. > :12:05.megatons, we have to think about a super enlarged IMF that can take
:12:05. > :12:09.this on. The problem here is that the
:12:09. > :12:13.politics of this book on the streets and a amongst the
:12:13. > :12:18.electorate in northern Europe are now in absolute contradiction to
:12:18. > :12:22.the economics. I absolutely. The interesting thing is that on the
:12:22. > :12:28.streets you are hearing lots of other voices on the inside of the
:12:28. > :12:32.circle saying that they and understand the feeling, and you can
:12:32. > :12:37.see... We heard the head of the OECD saying that earlier. Anyone
:12:37. > :12:42.who watches that television tomorrow at the G20 in Cannes, will
:12:42. > :12:49.see that the major sponsorship for the discussion will the banks.
:12:49. > :12:53.Societe Generale will have their emblem on the podium. This is crazy.
:12:53. > :12:58.This point about the secularity - at some point there has to be some
:12:58. > :13:03.form of European integration so you can have a proper central bank.
:13:03. > :13:10.is all very well saying that, how do you do that in the time frames
:13:10. > :13:14.with which we are trying to do it? It is really difficult. Lord McFall,
:13:14. > :13:17.even if you sort out Greece, until these fundamental issues are
:13:17. > :13:21.resolved you are really just putting off the crisis for a few
:13:21. > :13:27.weeks or a few months down the road. They have been picking the can ban
:13:27. > :13:33.the road for ages, and that is the problem. We now have a new head of
:13:33. > :13:40.the European Central Bank. Really what he has to do is to sit down
:13:40. > :13:44.with Angela Merkel and say I know there are political obstacles here
:13:44. > :13:47.in terms of the European Central Bank being a last resort, but if we
:13:48. > :13:53.do not have some form of Treasury in Europe than contagion will not
:13:53. > :13:58.be stopped. That is the main issue, but the timescale for it is at slip
:13:58. > :14:01.be urgent. Just before we leave that subject, I will tell the
:14:01. > :14:05.viewers that we have just heard that apparently George have
:14:06. > :14:10.Papandreou has just said that the question in the referendum will now
:14:10. > :14:15.be, not do you accept the bail-out plan, but do you want Greece to
:14:15. > :14:20.remain a member of the eurozone, which is the question that Nicolas
:14:20. > :14:24.Sarkozy and Angela Merkel were insisting that he posed. That is
:14:24. > :14:27.the question that will be asked. Thank you all very much.
:14:27. > :14:30.Protesters at the Occupy Glasgow camp on George Square have voted
:14:30. > :14:32.tonight to move to an alternative site proposed by Glasgow City
:14:32. > :14:35.Council. The group will relocate to Kelvingrove Park. David Allison
:14:35. > :14:43.reports from George Square on their message and whether or not it is
:14:43. > :14:46.getting through. It might look simple enough in
:14:46. > :14:50.black and white, but what does that mean in terms of a demand put to a
:14:50. > :14:55.Government. Anchor here it is the message coming from this camp here
:14:55. > :15:00.in Glasgow? I think the message is getting through, but I think it is
:15:00. > :15:05.also pulverising people. When anybody's lifestyle is threatened
:15:05. > :15:09.they become more defensive, and I think that is starting to happen in
:15:09. > :15:15.London. There is also the image thing - people think we are a bunch
:15:15. > :15:19.of hippies, which we are not. That is hard to get across to people.
:15:19. > :15:23.People find that hard to grasp, even people who have come along to
:15:23. > :15:28.join the movement. I think people are listening a bit more. They want
:15:28. > :15:32.to come all over and asked why we are here, what are stories are. And
:15:33. > :15:39.what we want to achieve. And we have had a lot of support, people
:15:39. > :15:42.coming over and giving us food and jumpers, and basically helping us
:15:42. > :15:47.to continue. A lot of people do not want us to move.
:15:47. > :15:50.But getting the message across is not always straightforward. At St
:15:50. > :15:55.Paul's the resignation of the clergy has been a distraction, and
:15:55. > :16:00.here in Glasgow there has been an alleged rape. They have had to do a
:16:00. > :16:04.bit of PR to say that that is completely unacceptable.
:16:04. > :16:08.It is all a long way from the early days of the original wall Street
:16:08. > :16:16.protest when local businesses like this fed protesters in New York
:16:16. > :16:19.with pizza. Ending the careers of church and at St Paul's was never
:16:19. > :16:24.on the agenda. Today the Archbishop of Canterbury suggested that
:16:24. > :16:34.society generally was impatient for the banks to return to business and
:16:34. > :16:35.
:16:35. > :16:39.bonuses as usual. We have not seen much... It is time we tried to
:16:39. > :16:43.focus and especially with the G20 beginning we have to hone in on a
:16:43. > :16:47.number of specific questions which have to be asked. Nobody has
:16:47. > :16:49.solutions, but it is important be asking the right questions.
:16:49. > :16:53.whatever the difficulties in the message itself and getting it
:16:54. > :16:58.across, when you get the Archbishop on side saying perhaps that
:16:58. > :17:02.protesters have a point, then maybe the arguments here and the feeling
:17:02. > :17:06.that there are starting to come together.
:17:06. > :17:10.Do you think there is a connection, when you have the Archbishop of
:17:10. > :17:15.Canterbury on one side and people writing in Greece because they do
:17:15. > :17:20.not want to suffer the type of austerity they are said to endure,
:17:20. > :17:23.do you think there is a connection? Of course, and there is a
:17:23. > :17:27.connection all of the the world. People are doing different things
:17:27. > :17:32.to make themselves heard. He in George Square we want a peaceful
:17:32. > :17:36.camp. They are light -- they are lucky that this is peaceful,
:17:37. > :17:46.because it could be a lot worse and people could be a lot was. People
:17:47. > :17:47.
:17:47. > :17:51.need something done, and there has always been a guidance in the past.
:17:52. > :17:55.While threatening eviction, Glasgow City Council has offered an
:17:55. > :18:00.alternative location, and the core protesters are expected to move
:18:00. > :18:07.ahead of legal action and Remembrance Sunday. We feel that
:18:07. > :18:10.despite the events coming up for Armistice Day and 14,000 parents
:18:10. > :18:15.buying tickets for Christmas events, that we need to keep these people
:18:15. > :18:21.onside. We also do not one to alienate ourselves from the council,
:18:21. > :18:25.because a lot of cancer people will be losing jobs and facing cuts. --
:18:25. > :18:28.counsel people. So there is a general consensus that we have to
:18:28. > :18:32.move not just for the sake of that but for a better secured site with
:18:32. > :18:36.better facilities. The council have been excellent with giving us
:18:36. > :18:40.concessions on that. A camp has been here for over two
:18:40. > :18:43.weeks, and tonight could be the last night they are here depending
:18:43. > :18:49.on the meeting and what they actually do about it in the cold
:18:49. > :18:57.light of day. Ms Edge Hill is likely to go on. -- their message