:00:07. > :00:13.Tonight, Europe's leaders gather in Brussels, but should they be
:00:13. > :00:19.talking about bailout or a default. Loaded with debt and facing eye-
:00:19. > :00:22.watering austerity s Greece getting to the "can't pay-won't pay stage ".
:00:22. > :00:27.Our political editor has spent the day annoying important people.
:00:27. > :00:31.REPORTER: What do you think about the idea of leaving the euro?
:00:31. > :00:35.How much will British tax-payers have to cough up to save the Greek,
:00:35. > :00:40.you may not like the answer from Germany's Europe minister.
:00:40. > :00:44.A new landmark in history. More than 60 years after these men
:00:44. > :00:48.created the European project, we will ask if it really is the
:00:48. > :00:54.biggest crisis it has ever faced. Also tonight w what has the Labour
:00:54. > :00:57.leader got against democracy, Ed Miliband ditches Shadow Cabinet
:00:57. > :01:04.elections, Alan Johnson will be here to explain why.
:01:04. > :01:14.Roll up, roll up, why an attempt to get animals out of the circus ring
:01:14. > :01:16.
:01:16. > :01:20.Good evening, the mess in Greece is not formally on the agenda of the
:01:20. > :01:23.Brussels summit, but it is on the mind of all the gathering leaders,
:01:23. > :01:29.the German Chancellor, Angela Merkel, says no formal decisions
:01:29. > :01:32.will be taken. She's well aware in Berlin there are posters for a new
:01:32. > :01:37.Euro-sceptic book by a German industrialists, demanding she
:01:37. > :01:40.rescue our money, as the title puts it. It will be your money too,
:01:40. > :01:44.although it is not clear how much Britain will be expected to stump
:01:44. > :01:48.up. Let's start in Brussels w our political editor. What is the mood
:01:48. > :01:52.like there tonight. I think the mood tonight is they
:01:52. > :01:57.are making progress. The European leaders have discussed the European
:01:57. > :02:02.economy over the last two or three hours over dinner and subsequently,
:02:02. > :02:06.in particular, of course, they had to discuss the Greek crisis. They
:02:07. > :02:10.have issued a statement about half an hour ago, in which they say they
:02:10. > :02:13.are urging European finance ministers to sort out the second
:02:13. > :02:16.Greek bailout package by early July, in other words, within the next few
:02:16. > :02:19.days. They welcomed the vote of confidence that the Greek Prime
:02:19. > :02:24.Minister got in the Greek parliament earlier in the week. But
:02:24. > :02:28.they are also saying to Greece, look, you have got to forget
:02:28. > :02:33.domestic political squabbles, that for any package of austerity
:02:33. > :02:37.measures to work in your country, you have to have cross-party
:02:37. > :02:41.support. That is a prerequisite for success, European leaders are
:02:41. > :02:45.telling the Greeks. They are saying, the Irish have managed to pass
:02:45. > :02:48.tough measure, the Portuguese have managed to pass tough measure,
:02:49. > :02:55.those economies are on the way to economy, you have to do the same.
:02:55. > :03:01.That was the message from tonight. EU leaders gathered here tonight in
:03:01. > :03:04.what many think is the worst crisis in more than 50 years of the
:03:04. > :03:09.European Community. A member-state is about to default on its detects,
:03:09. > :03:16.and maybe leave the euro. With unthinkable consequences for
:03:16. > :03:19.several other EU countries. And the whole European economy.
:03:19. > :03:22.Indeed, the Greek Prime Minister arrived here tonight, saying this
:03:22. > :03:27.wasn't just a crisis for Greece. This is a fight for the Greek
:03:27. > :03:33.people. This is a fight for Greece, for our country, but it is also a
:03:33. > :03:37.fight for a common European currency and the common Europe.
:03:37. > :03:41.Germany's Angela Merkel warned that nothing substantial is likely to be
:03:42. > :03:46.decided this week on the Greek situation.
:03:46. > :03:48.TRANSLATION: In such a situation, everyone must stand together in a
:03:48. > :03:57.country. This is achieved in Ireland and in Portugal, and
:03:57. > :04:03.therefore we pressed for this also to be achieved in Greece. REPORTER:
:04:03. > :04:09.Can Greece be saved Prime Minister? David Cameron reeling from charges
:04:09. > :04:12.of bullying from a Tory MP back home kept quiet. Earlier in praying,
:04:12. > :04:15.Mr Cameron claimed to have assurances from Germany that
:04:15. > :04:21.Britain wouldn't have to pay towards the proposed second bailout
:04:21. > :04:25.for Greece. As thepm has insisted, several - PM has insisted several
:04:25. > :04:29.times this week. I have received assurances from other countries,
:04:29. > :04:34.including from the Germans, that this won't be the case, and I'm
:04:34. > :04:38.sure that they will staik stick to those assurances, and whatever
:04:38. > :04:41.arrangements are reached in Europe for the eurozone and for Greece,
:04:41. > :04:47.will not include the European financial mechanism. Earlier this
:04:47. > :04:50.afternoon, socialist leaders met to discuss solidarity for their Greek
:04:50. > :04:54.colleagues. Their President admitted this is indeed a decisive
:04:54. > :04:59.moment. How serious is this crisis do you think, historically?
:05:00. > :05:05.know, as a former Prime Minister and economist, who recalled the oil
:05:05. > :05:08.crisis in the 70s, who have read about the crisis in the 30, who
:05:08. > :05:13.knows the development after the Second World War, so this is the
:05:13. > :05:18.worst crisis in the history of the European Union. That is why I
:05:18. > :05:23.really appeal to the European Council, please understand that
:05:23. > :05:26.time has come now not only to think on your own country in the
:05:26. > :05:32.traditional way when you come as Prime Minister to fight for your
:05:32. > :05:35.interests, think of Europe as a whole, and we have never, ever been
:05:35. > :05:41.challenged so seriously as we are now.
:05:41. > :05:42.But Cathy Ashton, the Britain who is Europe's High Representative for
:05:42. > :05:46.Foreign Affairs, refused to be drawn.
:05:46. > :05:56.REPORTER: How big a crisis do you think it is in the EU? Leave it to
:05:56. > :05:58.
:05:58. > :06:00.them. It's been reported tonight that the
:06:00. > :06:05.President of the European Council has said that the European
:06:05. > :06:11.financial stability mechanism will not be used as part of the second
:06:11. > :06:14.bailout for Greece. That is in line with what David Cameron has been
:06:14. > :06:17.saying today, that he has had reassurances from various people,
:06:17. > :06:21.including the Germans as you saw, that Britain won't have to
:06:21. > :06:25.contribute to the bailout. Of course if that stability mechanism
:06:26. > :06:30.was used, then Britain's contribution to that mechanism is
:06:30. > :06:34.likely to be part of the bailout. It now looks like that is not going
:06:34. > :06:39.to be a part Greek bailout. Tomorrow they come back here, but
:06:40. > :06:43.they come back here at 9.00am. There are other important things on
:06:44. > :06:48.the agenda tomorrow, including immigration, a big issue here, and
:06:48. > :06:52.in particular, the effect of the Arab Spring, and the effect of huge
:06:52. > :06:57.numbers of refugees on southern Europe, and British concerns that
:06:57. > :07:02.may be the rules might be relaxed, and so therefore there is going to
:07:02. > :07:05.be some pretty tough talking tomorrow on that issue after the
:07:05. > :07:13.equally important, perhaps more important issue of the Greek crisis
:07:13. > :07:17.tonight. For a German perspective on this,
:07:17. > :07:22.earlier I caught up with German's Europe minister, who is in Berlin.
:07:22. > :07:27.Whatever is decided in Brussels, do you accept that a Greek default is
:07:27. > :07:31.inevitable? I do not believe it is necessary. I think it can be
:07:31. > :07:35.avoided, if we take wise decisions, if the Greeks take the wise
:07:35. > :07:39.decisions next week. The crucial vote in the Greek parliament will
:07:39. > :07:44.be next week, not tomorrow, but the European Council can pave the way
:07:44. > :07:48.for a setting in which the Greeks might be able to come to a
:07:48. > :07:53.reasonable solution in their parliament. But you have in Greece
:07:53. > :07:55.a country which is already loaded up with debts that it can't pay, an
:07:55. > :08:00.austerity package that is extremely unpopular, and the best some people
:08:00. > :08:06.think you can do in Brussels is postpone the inevitable. This is a
:08:06. > :08:12.very risky approach, I think a chaotic situation could be very
:08:12. > :08:17.dangerous not only for Greek banks, for Greek society, for the Greek
:08:17. > :08:21.economy, but also for neighbours and the entire European Union. This
:08:21. > :08:24.might be quite disastrous. A chaotic situation should be avoided
:08:24. > :08:28.and I believe can be avoided. Wouldn't it be better for Greece
:08:28. > :08:33.and the euro if Greece just left the eurozone, it could then devalue
:08:33. > :08:36.and avoid the worst problems of the austerity package. As you know many
:08:36. > :08:39.German citizens are now saying you shouldn't have let Greece into the
:08:39. > :08:44.euro in the first place? We have to cope with the situation the way it
:08:44. > :08:50.is now. I believe it is not possible to leave the euro zone,
:08:50. > :08:55.simply because that would produce a chaotic situation, in that chaos I
:08:55. > :08:59.believe the Greek banks would go down the drain immediately, taking
:08:59. > :09:04.quite a few others with them. This is why I believe it is an untenable
:09:04. > :09:10.proposia. The Greek Government is proposing what amounts to a fiscal
:09:10. > :09:13.consideration of 12%, they don't have the - contraction of 12%, they
:09:13. > :09:18.don't have support for that, that is a problem for them, but also for
:09:18. > :09:22.you, without that support you can't go ahead? I think it is indeed a
:09:22. > :09:26.very irritating situation, that unlike in Portugal, the opposition
:09:26. > :09:31.in Greece is not ready to support the necessary. Although this Greek
:09:31. > :09:35.opposition has been in power until something like 18 months ago and it
:09:35. > :09:40.probably not - is not completely without responsibility for the
:09:40. > :09:48.situation with which we have to deal with now. Can you confirm
:09:48. > :09:50.Angela Merkel's position on a couple of things, is the
:09:50. > :09:54.privatisation voluntary, and will banks agree with things that will
:09:54. > :09:59.cost them money? In the present credit agreement there is no clause
:09:59. > :10:04.for participation in the solution of such a problem which we face now.
:10:04. > :10:09.So the voluntary solution is the only one that is probably legally
:10:09. > :10:13.possible. But it can be pursued by making it attractive for the banks
:10:13. > :10:18.and the other holders of titles against Greece, because otherwise
:10:18. > :10:22.we might end up in a very chaotic situation in which the suffering
:10:23. > :10:29.for those who hold these assets is even worse. I think there are good
:10:29. > :10:33.reasons for a co-operative approach on the side of those who hold these
:10:33. > :10:36.assets. I hear from the German banks they are ready to co-operate.
:10:36. > :10:40.Can you also confirm whether Chancellor Merkel has come to an
:10:40. > :10:44.agreement with the British Prime Minister, that Britain will not
:10:44. > :10:49.contribute to the European bailout fund through the European Stability
:10:49. > :10:52.Mechanism, but only through the IMF commitment? I do not know what the
:10:52. > :10:58.outcome of the talks between the Prime Minister and the Chancellor
:10:58. > :11:02.have been today. I think they met within the more centre right parts
:11:02. > :11:07.of the political spectrum, and within that circle there might have
:11:07. > :11:10.been an agreement, I'm not aware of it. Understand this is a matter of
:11:10. > :11:15.some importance to the British Government, obviously they will
:11:15. > :11:18.live up to the IMF commitment, but this is a different matter?
:11:18. > :11:23.commitments are crucial for Britain, I have no doubt that the UK will
:11:23. > :11:29.fulfil them, on the other hand, the good future of the YuriGagarino50
:11:29. > :11:34.Roy is in the very best - euro is in the very best interests of the
:11:34. > :11:38.UK, although it is not part of the eurozone, I wouldn't be surprised
:11:38. > :11:43.if we see a co-operative mood in the UK as well. One criticism in
:11:43. > :11:47.Germany is the lack of leadership from Sarkozy and Merkel, and David
:11:47. > :11:52.Cameron can't lead because we are not in the euro and there is a lack
:11:52. > :11:56.of leadership in the heart of Europe? I wouldn't disagree, I
:11:56. > :12:00.would not point to specific personal tee, but I would say
:12:00. > :12:05.Europe needs stronger leadership. What we obviously need is the
:12:05. > :12:09.Europe that does not take decisions in field where is regional and
:12:09. > :12:13.national decisions are completely sufficient, but have a couple of
:12:13. > :12:20.areas where we need more Europe and the currency question is one of
:12:20. > :12:24.those areas. Our economics editor, Paul Mason,
:12:24. > :12:29.was in Greece for Newsnight last week, he's still tracking the story
:12:29. > :12:36.for us what do you think they are actually trying to come up with in
:12:36. > :12:44.Brussels? It is on a knife edge, it could all come together or fall
:12:44. > :12:52.apart. The principle they are looking at is in a light way
:12:52. > :12:56."forebearance", or in a heavy way "self-deillusion". What account
:12:56. > :13:00.Greeks deliver, the 28 billion of auts terity signed up to and can't
:13:00. > :13:04.get through the Greek parliament wasn't enough and they needed 5
:13:04. > :13:08.billion more. He said he can deliver that and here are the extra
:13:08. > :13:12.things I can do. He spend the weekend telling his MPs and the
:13:12. > :13:16.party that he was going to do less, and soften the austerity package.
:13:16. > :13:19.Then we have the bondholders, they are all going quietly told, these
:13:19. > :13:23.are people who have lent Greece money, you will voluntarily role
:13:23. > :13:28.over that loan for five years. Meanwhile, in the markets, the
:13:28. > :13:33.technicalties are that if they change the terms of those loans,
:13:33. > :13:36.the rules say it is a default. So we just don't know whether this
:13:36. > :13:41.forebearance approach will bear fruit, and the ultimate test of it
:13:42. > :13:47.is the tear gas and the steel- tipped batons and the rocks
:13:47. > :13:49.breaking on St Agnes Square, as is depressingly likely they will do
:13:49. > :13:55.next week. We have some more clarification of what Britain might
:13:55. > :14:02.be liable for in all of this? Britain is, whatever Mr Cameron
:14:02. > :14:08.says, if the 60 billion, smaller European stability fund is actually
:14:08. > :14:12.activated, we are liable for about seven billion euros of it, we have
:14:12. > :14:16.put in 1.2 billion euros so far. Nobody is activating it, that is
:14:16. > :14:20.the situation at the moment. That is fine, because the scale of the
:14:20. > :14:26.problem is too big in Greece for that fund to be applied to. The
:14:26. > :14:30.question, I think, that we will look back on. You heard there, that
:14:30. > :14:34.the European socialist leader is saying that everybody should be
:14:34. > :14:37.collaborative, and the Germans there, let's have some leadership,
:14:37. > :14:41.Mr Cameron can come back and say, look, I have achieved something,
:14:41. > :14:49.because we are not taking part in the Greek bailout. Is that what you
:14:49. > :14:55.want to achieve? The reason this 60 billion fund exists is because it
:14:55. > :15:00.is a solidarity fund is for it is the 27 nation European Union for
:15:00. > :15:03.the currency that has been, like it or not, written into the
:15:03. > :15:05.constitution. It is still part of the European project. The question
:15:05. > :15:09.remains for the coalition Government, how much leadership
:15:09. > :15:13.does it want to show? Good question, we will pursue the
:15:13. > :15:16.answer over the next few days. A little later we will return to
:15:16. > :15:21.the European project and ask if this crisis really is the biggest
:15:21. > :15:25.it has ever faced. The circus came to town today, or
:15:25. > :15:29.at least to the House of Commons, where there were some quite
:15:29. > :15:33.peculiar scenes in a debate over whether to ban wild animals from
:15:33. > :15:37.the big top. You might have thought the Government have had other
:15:37. > :15:45.things to think about, but they spent the day fighting against a
:15:45. > :15:51.bill brought in by an MP who said staff at Downing Street tried to
:15:51. > :15:58.stop him publishing it. You may find some of these scenes upsetting.
:15:58. > :16:03.This is the last elephant in British circus, his mistreatment
:16:04. > :16:12.has brought the continuing misuse of wild animals as entertainment to
:16:12. > :16:15.prominence. Today 200 MPs who want to ban the use of all wild beasts
:16:15. > :16:22.in circuses secured a debate in the House of Commons, and were joined
:16:22. > :16:26.by celebrity backers too. I think the ayes have it. When the vote
:16:26. > :16:30.came, the Government position was defeated without even a division.
:16:30. > :16:34.That doesn't mean there will be a ban on wild animals in the big top.
:16:34. > :16:40.This was a backbench debate and the result isn't binding. But although
:16:40. > :16:45.it all looked very consensual, behind the scenes it resembled a
:16:45. > :16:49.bear pit. Backbench MPs here at Westminster have been regaling me
:16:49. > :16:53.with heart rending tales of cruelty, intimidation, degradation, they
:16:54. > :16:56.haven't been talking about the treatment of animals, they have
:16:56. > :16:59.been talking about their own treatment at the hands of the whips.
:16:59. > :17:02.Colleagues of Mark Pritchard, the Conservative MP, who has led the
:17:02. > :17:05.calls for ban, says he was contacted on three separate
:17:05. > :17:09.occasions by Downing Street, including late last night, in an
:17:09. > :17:16.attempt to get him to water down his proposal, he was told if he
:17:16. > :17:21.didn't do so his career could be endangered. I was offered incentive
:17:21. > :17:25.and reward on Monday, it was ratchetted up to last night where
:17:25. > :17:30.he was threatened. I had a call from the Prime Minister's office
:17:30. > :17:40.directly, I was told unless I withdraw this motion that the Prime
:17:40. > :17:41.
:17:41. > :17:46.Minister himself said that he would look upon it very dimly indeed.
:17:46. > :17:51.This followed some audacious movements from the Government,
:17:51. > :17:55.initially there was a three-line whip on MPs to oppose an outright
:17:55. > :17:58.ban. But the Commons speaker refused to allow a Government
:17:58. > :18:02.compromise to be discussed, and backed off and allowed MPs to vote
:18:02. > :18:07.as it pleased. This morning's roar of the lion had become this
:18:07. > :18:14.evening's squeak of the mouse. It had been pretty clear which way
:18:14. > :18:19.things were going, when one MP, who didn't support a ban, failed to
:18:19. > :18:25.tame his fellow politicians. looks all very cruel. The reality
:18:25. > :18:29.is many of these animals, many of these animals have been so
:18:29. > :18:36.domesticated over so many years, that to wrench them out of the life
:18:36. > :18:41.they are used to, would be, would I believe be more cruel, would be
:18:41. > :18:48.more cruel than to allow them to continue. The welfare is what the
:18:48. > :18:51.Government has to implement. official Downing Street line is
:18:51. > :18:55.they were reluctant to make policy on the hoof. They say they had
:18:56. > :19:02.advice that ban could face a legal challenge. But the Government's
:19:02. > :19:05.opponents say they shunned be riding roughshod over public
:19:05. > :19:10.opinion. This former party animal is more interested in animal
:19:10. > :19:13.welfare these days, the designer, Meg Matthew, once attended Downing
:19:13. > :19:17.Street receptions as the wife of Noel Gallagher. And after today's
:19:17. > :19:21.debate she's calling on the current occupant of Number Ten to back
:19:21. > :19:26.fully an outright ban. They are mentally and physically broken down
:19:26. > :19:31.these wild animals, it is for entertainment. We are supposed to
:19:31. > :19:34.be an animal-loving nation and it is barbaric. She said the Prime
:19:34. > :19:40.Minister might have had a particular reason for not want to
:19:40. > :19:44.go support a ban. The reason David Cameron stepped in, is because in
:19:44. > :19:48.his constituency he has the biggest wild animal breeders in the country.
:19:48. > :19:52.So there you go. I contacted the company concerned
:19:52. > :19:58.and they said they had never met David Cameron or lobbied him on
:19:58. > :20:04.this issue and the suppliers of wild animals to drama productions,
:20:04. > :20:08.not to circuses wouldn't be affected by a ban in this case.
:20:08. > :20:13.Downing Street are rejecting the accusation that is the Prime
:20:13. > :20:18.Minister was baring his teeth on this issue, he knew that circuses
:20:18. > :20:20.and wild animals would be banned in due course, but he didn't want an
:20:20. > :20:24.early ban because he couldn't promise what he couldn't deliver.
:20:24. > :20:30.The Government is remining us for the meantime it is committed to a
:20:30. > :20:33.tougher licensing regime, but at the last count n2009, only 39 wild
:20:33. > :20:39.animals were used in British circuses, it is estimated fewer now,
:20:39. > :20:43.20 or so, is that worth putting a political career in danger. If the
:20:43. > :20:45.Government is serious about listening to parliament, if it is
:20:45. > :20:49.serious about seeing parliament reassert its authority, on days
:20:50. > :20:55.like today it needs to stand aside and allow Members of Parliament not
:20:55. > :21:01.to be robot, but occasionally speak out on issues they feel strongly
:21:01. > :21:04.about. We can assure you no animal was hurt in the making of our
:21:04. > :21:10.programme. A few parliamentary careers might have been damaged and
:21:10. > :21:14.some very senior egos bruised. We have some news broken in the past
:21:14. > :21:18.hour about the Labour leader, Ed Miliband, trying to end elections
:21:18. > :21:21.to the Shadow Cabinet, why is he doing this? There is a review of
:21:21. > :21:26.Labour's internal workings going on at the moment. It is part of this
:21:26. > :21:30.they are looking at a whole range of issues, including elections to
:21:30. > :21:33.the Shadow Cabinet. Ed Miliband believes elections to the Shadow
:21:33. > :21:37.Cabinet, happening only in opposition, would be a distraction,
:21:37. > :21:42.he says look the party should be looking to voters not turning in on
:21:42. > :21:47.itself. That is his reason for doing it. Some cynics might point
:21:47. > :21:50.out that around that Shadow Cabinet table there are more supporters for
:21:50. > :21:54.his brother for the Labour leadership than himself. There is
:21:54. > :21:57.another problem he's trying to solve here as well, in the run up
:21:57. > :22:03.to this party's annual conference in September he wants to push
:22:03. > :22:07.through a whole package of measure, a whole package of reforms. What
:22:07. > :22:11.some party insiders have said he has chosen the wrong issue, talking
:22:11. > :22:17.about the Shadow Cabinet, he needs to talk about a new way to elect
:22:17. > :22:25.the party leader, he's being pummel bid the Government for being put in
:22:25. > :22:28.by trade union votes. What about the MPs? The MPs who
:22:28. > :22:33.elect Shadow Cabinet members, he will not talk to them until Monday
:22:33. > :22:39.night about this. One of them John McDonald, wanted to talk to him
:22:39. > :22:43.tonight. I'm really disappointed, I hear that people around Ed Miliband
:22:43. > :22:51.are spinning this as his Clause IV moment, where he demonstrates
:22:51. > :22:55.strong leadership by beating the party into sub mis, I think he has
:22:55. > :22:57.misread the situation. I have been talking to some other members of
:22:58. > :23:01.the parliament and the national executive, and they have to agree
:23:01. > :23:05.on these changes. One said Ed Miliband needs to make the Shadow
:23:05. > :23:09.Cabinet more effective rather than worrying how it is elected. Another
:23:09. > :23:14.said it would cause ructions in the party, another said is he as
:23:14. > :23:17.consensual as he presented himself. In his favour, Labour in Government
:23:17. > :23:22.don't allow the cabinet to be elected, they are chosen by the
:23:22. > :23:27.leader, and the Conservatives, it is not an earth-shattering moment,
:23:27. > :23:31.if you do it in opposition. We're joined by the former Home Secretary.
:23:31. > :23:35.Why did Ed Miliband choose today to come out against democracy in the
:23:35. > :23:40.parliamentary Labour Party? hasn't come out against democracy.
:23:40. > :23:45.We should put the election of the Shadow Cabinet in the same place as
:23:46. > :23:52.animals performing in circuses. It is about time this changed. It is
:23:52. > :23:55.shorely welcome. Not by everybody, we just heard John McDonald and
:23:55. > :24:00.others? There will be a vote of the parliamentary Labour Party, this
:24:00. > :24:03.will sail through. As far as the time is concerned, on Saturday we
:24:04. > :24:08.have the National Policy Forum in Wrexham, maybe this came out and
:24:08. > :24:13.they decided they would project it themselves rather than have a leak.
:24:13. > :24:15.It is absolutely sensible and wise to do this. Can you imagine Alex
:24:15. > :24:20.Ferguson as the manager of Manchester United being told, look,
:24:20. > :24:24.you are not allowed to pick your team, the squad will elect your 11
:24:24. > :24:30.first team players. You can play them in whatever position you want,
:24:30. > :24:34.they will elect them. Why has it been so daft for so long? Good
:24:34. > :24:37.question. We were in Government for 13 years and we weren't thinking of
:24:37. > :24:42.these things. It is amazing, you are quite right, this isn't
:24:42. > :24:45.disappear along with some of the other nonsense that is a relic from
:24:45. > :24:48.when Labour Governments were short interludes in Conservative rule.
:24:48. > :24:51.That has all changed now, we are party of Government. It is
:24:51. > :24:55.absolutely right to make this change. Do you worry that the
:24:55. > :24:58.message in tomorrow morning's newspapers wonts be that, it will
:24:58. > :25:02.be Ed Miliband doesn't rate some members of the Shadow Cabinet and
:25:02. > :25:06.he wants to get rid of them because he can't stand the sight of them
:25:06. > :25:11.around the table. God knows what will be in the press tomorrow, I'm
:25:11. > :25:15.not worried about that at all. No- one in their right minds would have
:25:15. > :25:18.a leader that can't pick their Shadow Cabinet. Nobody in their
:25:19. > :25:22.right minds would do that. In Government that rule doesn't apply.
:25:22. > :25:25.If it doesn't apply in Government it shouldn't apply in opposition,
:25:25. > :25:29.fighting to get into Government. It is a distraction, and it is a relic
:25:29. > :25:32.from the past. It has nothing to do with the quality of the Shadow
:25:32. > :25:36.Cabinet, which is actually very good. It has nothing to do with
:25:36. > :25:40.that at all. I think there might be a bit of nonsense about that,
:25:40. > :25:43.generally most people will say, about time. Probably 15 years
:25:43. > :25:49.overdue. Isn't this, I mean the other part of it is maybe this
:25:49. > :25:52.itself is a bit of a distraction. The big question face ing your
:25:53. > :26:01.party coming up to the party - facing your party coming up to the
:26:01. > :26:04.party conference is what are you for, what are you offering, what
:26:04. > :26:08.will you do for the British public, this has nothing to do with that
:26:08. > :26:14.but to do with personalities? process of looking at the defeat,
:26:14. > :26:20.it was a heavy defeat for us last year, is coming to a head in these
:26:20. > :26:25.policy forums, one aspect of it is the party structure. You were right
:26:25. > :26:29.to mention early on how we elect the leader. This will all be part
:26:29. > :26:33.of it. This isn't it, the way we elect the Shadow Cabinet, there
:26:33. > :26:37.will be all of that and the concentration on policy. That
:26:37. > :26:41.doesn't detract from the fact that we had this hangover from the past,
:26:41. > :26:45.we should have got rid of it while we were in Government and changing
:26:45. > :26:49.lots of things. For whatever reason we didn't, now we should do it as
:26:49. > :26:54.quickly as possible. That is interesting, you say Ed Miliband is
:26:54. > :26:58.committed to changing the system to which Labour leaders, including
:26:58. > :27:03.himself, are elected? He said some while back, when I made comments on
:27:03. > :27:06.this, he thinks it has to change. The job that Peter Hain is doing on
:27:06. > :27:10.this particular work t would be strange, weird, perverse, if we do
:27:10. > :27:15.all of that and don't look at the way we elect the leader. Just a
:27:15. > :27:19.final thought. How then, what's the mechanism for getting this through.
:27:19. > :27:22.You can't just think Ed Miliband can't just dictate this to the
:27:22. > :27:26.party. How does he push these things through? The rules are about
:27:26. > :27:29.what the NEC decides and what conference decides. What Ed is
:27:29. > :27:33.saying, from my understanding, is he will ask the parliamentary
:27:33. > :27:36.Labour Party, who is the electorate for the Shadow Cabinet. He will ask
:27:36. > :27:42.them to vote on this, we will have a debate in the parliamentary
:27:42. > :27:46.Labour Party, and we will have a vote on it. A secret ballot. I
:27:46. > :27:55.think that's absolutely the right way to do it, as well as the other
:27:55. > :27:59.mechanisms in the rule back. - Book.
:27:59. > :28:05.More on the troubles in the eurozone.
:28:05. > :28:10.Olli Rehn gave a blunt statement this week that Greece's problems in
:28:10. > :28:14.Europe are the biggest crisis since World War II.
:28:14. > :28:18.There have been plenty of crisis, the Maastricht Treaty, and Margaret
:28:18. > :28:23.Thatcher's handbagging of various European leaders.
:28:24. > :28:33.How serious is it this time? We must build a kind of united
:28:33. > :28:40.states of Europe. In this way only will hundreds of millions of
:28:40. > :28:45.toilers be able to regain the simple Joyce and hopes which - joys
:28:45. > :28:47.and hopes that make life worth living.
:28:48. > :28:52.Europe's union grew out of the experience of what happens when
:28:52. > :28:57.national interest is pursued to its ultimate most terrible conclusion.
:28:57. > :29:04.What could have been more logical to Britain's war leader, than a way
:29:04. > :29:09.of subsuming those rivalries in the common good. Right from the start,
:29:09. > :29:13.the European Community was seen as a mechanism for binding Germany,
:29:13. > :29:19.peacefully, within the wider European family. People were still
:29:19. > :29:23.fixated on the horrors of war. As the decades have passed, its
:29:23. > :29:31.purpose has shifted subtley, to moderating what would otherwise be
:29:32. > :29:36.the political and economic power of unified Germany.
:29:36. > :29:41.The sounding of the coal and steel community in 1951 marked the start
:29:41. > :29:46.of a process. Their first working session for the plan to pool steel
:29:46. > :29:54.and coal. The Six Nations, all now part of the euro, sought to make
:29:54. > :29:59.war impossible by closer economic integration.
:29:59. > :30:02.In the beginning it was to moderate and contain Germany. Later on the
:30:02. > :30:06.core mission of the European Union became the preservation of peace
:30:06. > :30:12.and co-operation in the European Union, and now I think we are
:30:12. > :30:15.moving in the direction of a European Union which internally
:30:15. > :30:21.might be capable of co-ordinates its economic policy more than it
:30:21. > :30:25.did in the past in which externally is not stablising itself, but
:30:25. > :30:29.trying to export stability to other parts of the world.
:30:29. > :30:34.As the European Community flourished, even Britain decided to
:30:34. > :30:39.knit itself into this new creation. Self-interest was beginning to take
:30:39. > :30:44.over. For the British, the appeal lay in
:30:44. > :30:50.growing a single economic space, rather than in pushing forwards
:30:50. > :30:54.ever greater European integration. The President of the Commission
:30:54. > :30:56.said at press conference the other day that he wanted the European
:30:56. > :31:00.Parliament to be the democratic body of the community, he wanted
:31:00. > :31:10.the commission to be the executive, and he wanted the Council of
:31:10. > :31:10.
:31:10. > :31:16.Ministers to be the Senate, no. No. The collapse of the Soviet bloc
:31:16. > :31:20.both created a united Germany, much bigger than France or Britain, and
:31:20. > :31:25.offered the possibility for many new countries to join. Elites
:31:25. > :31:31.across the continent saw the chance to push for further integration to
:31:31. > :31:34.bind this growing family together. It is obviously create bid elites,
:31:34. > :31:41.because ordinary people will not suddenly think up something like
:31:41. > :31:49.that, so let's create it. That doesn't mean that this is some
:31:49. > :31:52.elite idea that is shoved down the throat of other people. But the
:31:52. > :31:57.elites who favoured the euro, the constitution and ever greater
:31:57. > :32:03.political integration started to run foul of public opinion. France
:32:03. > :32:07.and the Netherlands voted "no" to the institution. Other countries
:32:07. > :32:11.stay the out of the euro, national interests was reaverting itself.
:32:11. > :32:17.These days Germany boasts Europe's biggest population, and by far its
:32:17. > :32:21.most successful exporting economy. And an increasing numbers of
:32:21. > :32:25.Germans are wondering why they should remain quite so closely tied
:32:25. > :32:30.to a European Union that requires them to keep bailing out less
:32:30. > :32:35.successful members and so restrict their economic freedom of action.
:32:35. > :32:40.The need to finance huge deficits in Greece or Spain, has produced
:32:40. > :32:45.anger in Germany, propping up the euro has become horribly expensive.
:32:45. > :32:51.That lead some to want to ditch it, but supporters of the European
:32:51. > :32:56.project arguinging the case for resuming the process of integration.
:32:56. > :33:00.When I and my constituents who later on in the Foreign Ministry
:33:00. > :33:04.was decribing the European project, there were always two competing
:33:04. > :33:08.desires, on the one side, you see it now, nobody wanted to pay for
:33:08. > :33:13.the economic shortcomings and mistakes of another country n this
:33:13. > :33:17.case Greece. But, on the other side, Germany wants to have a friendly
:33:17. > :33:23.relationship with all its neighbours, and by the way, its
:33:23. > :33:27.most important trading partners. When you put these two in balance
:33:27. > :33:31.the pro-European argument was always winning. If some see in
:33:31. > :33:36.Greece's turmoil a chance for another leap forward, others think
:33:36. > :33:41.that simply won't garner support across the union. For as long as
:33:41. > :33:51.Germany and others are prepared to bail out the euro, it and the union
:33:51. > :33:51.
:33:51. > :33:56.itself are likely to survive. I'm joined by an adviser to the
:33:56. > :34:01.European President. The grok communist - the Greek communist
:34:01. > :34:07.party member, and my other guest. Is this the end for Greece in the
:34:07. > :34:12.euro do you think? It might be, but there could be a chance for Europe
:34:12. > :34:18.itself, because I think this is practically the end of the so-
:34:18. > :34:23.called modern Europe. The euro is not the solution. It starts being
:34:23. > :34:28.more or less a hell, not only for Greek, but for the so-called
:34:28. > :34:33.western economy. By killing Greeks, killing their future, taking their
:34:33. > :34:36.country, their streets, their island, the sun, everything they
:34:37. > :34:45.produce, for years and years and years now, this is not going to
:34:45. > :34:50.save the system. There is a pathogony in the system, it is not
:34:50. > :34:54.a monetary answer. The euro won't save the Greece, it may be the
:34:54. > :34:58.problem for Greece, let me put that? With respect, Greece would be
:34:58. > :35:02.in a far worse situation if it wasn't receiving a loan from other
:35:03. > :35:08.fellow European countries. On the euro itself, we forget the
:35:08. > :35:12.YuriGagarino50 owe as a whole is doing - euro is doing well, it has
:35:12. > :35:20.lower public debt than the US, UK or Japan, economic growth has
:35:20. > :35:24.returned, it last a balance of payments elibum, that is better on
:35:24. > :35:26.- equilibrium, it is better than the pound. Except you have riot
:35:27. > :35:33.anything Greece, and austerity measures they can't pay for?
:35:33. > :35:37.have three countries that have run up excessive debts in the euro,
:35:37. > :35:42.countries outside Europe have done that as well. It is not to do with
:35:42. > :35:46.the euro. Inside the euro they are able to address it with loans and
:35:46. > :35:55.grants, we are not giving the money we are lending the money. From
:35:55. > :36:00.fellow eurozone countries. You were nodding when that remark
:36:00. > :36:08.was made, the first time you agreed with a communist politician, was
:36:08. > :36:13.that an "I told you so"? Nobody wants to be that person to say that,
:36:13. > :36:21.we have agreed that countries should be able to default on debts,
:36:21. > :36:25.and we have been arguing that for a number years. It is the least worst
:36:25. > :36:28.option. People think that will be chaotic? Pressing another high-
:36:28. > :36:35.interest loan on someone will not help them. The bailouts have added
:36:35. > :36:41.to the amount of debt that the Greeks have to pay out. It would be
:36:41. > :36:44.better to let them default like Latin American countries did ten
:36:44. > :36:48.years ago. I wonder how far the elites in Europe are disconnected
:36:48. > :36:52.from the people in Europe. That is true of your Government and the
:36:52. > :36:57.Government of Greece as well? Definitely, they are completely
:36:57. > :37:04.disconnected. I think that it is like an autocracy, and we are going
:37:04. > :37:08.back about 300 years. We lose every working-class right, we are losing
:37:09. > :37:13.things European people fought for. There is no future, my dear, the
:37:13. > :37:21.eurozone is not a state, it is just an area. Some make money, I think
:37:21. > :37:24.that the north is making money the south loses. You can't have the
:37:24. > :37:30.same currency, the same measure, with exporting countries like
:37:30. > :37:40.Germany, and importing countries like Greece. Afterall, you can't
:37:40. > :37:40.
:37:40. > :37:45.have people I made a mistake, I trusted you, you put you in, if you
:37:45. > :37:49.go to any bank in London, and you someone without enough money, you
:37:49. > :37:55.don't give him a credit car. That means Greece shouldn't have been
:37:55. > :37:58.allowed into the euro in the first place? No, I think Greece needs to
:37:58. > :38:05.start disengaging from big organisations not helping the new
:38:05. > :38:14.generation fight for a future. Like NATO, look we are in ceeth, we have
:38:14. > :38:18.beautiful sun, we still have a beautiful American base where
:38:18. > :38:21.aircraft can begin their trip to Libya. This question of the elites
:38:21. > :38:30.being out-of-touch, people in Germany are saying that too? What
:38:30. > :38:34.is this deal they say, why are we working so hard to pay for these
:38:34. > :38:38.countries what does it have to do with us. Do you accept the point
:38:38. > :38:42.that the elites are out-of-touch? They are usually elected
:38:42. > :38:46.representatives in our 27 democracies in the nuep, confronted
:38:46. > :38:52.with our - in the European Union, confronted with the interdependance,
:38:52. > :38:56.like it or not, and we find Greece has gotten into a difficult
:38:56. > :39:00.situation through their own decisions. We are trying to get
:39:00. > :39:07.them to restore credibility, we are helping by loans, not grants, it
:39:07. > :39:12.would be far worse for Greece if we weren't doing that. The idea we
:39:12. > :39:16.could let Greece go bankrupt, come on, learn the lessons of a few
:39:16. > :39:20.years ago, remember Lehman Brothers, we thought that was in America and
:39:20. > :39:24.won't have nothing to do with us. It had knock-on effects throughout
:39:24. > :39:31.the world. It is the same with Greece, if it started to default it
:39:31. > :39:38.would have a knock-on effect on banks across the world. Britain has
:39:38. > :39:41.the third eyest level of banking liability, - highest level of
:39:41. > :39:45.banking liability. Would the European project, in your opinion,
:39:45. > :39:50.not survive if Greece was allowed to default, is that what you are
:39:50. > :39:54.saying, is it that bad? It is not to do with the European project.
:39:54. > :39:57.With Lehman Brothers it was not to do with the dollars surviving, it
:39:57. > :40:05.would have huge negative economic consequences across the rest of
:40:05. > :40:10.Europe the inside and outside the eurozone and the European Union.
:40:10. > :40:16.Richard and oir people, arguing for more yuep Europe are in favour of
:40:16. > :40:19.the euro, - Richard and other people, arguing for more Europe are
:40:19. > :40:23.in favour of the euro. Greece's debts are increasing faster than
:40:23. > :40:29.its economy. Greece can't be in a situation where she is not going to
:40:29. > :40:34.be unable to pay back her debts, without some sort of default, it is
:40:34. > :40:37.mathematics, not public opinion. I raised the question of lack of
:40:37. > :40:41.leadership in Europe, without pointing to personalities. You
:40:41. > :40:45.could say the same for parties, where is David Cameron's leadership
:40:45. > :40:49.on this? I'm very pleased the Prime Minister has said no to a Greek
:40:50. > :40:54.bailout. I would now like to see him extend that same logic.
:40:54. > :40:59.hasn't said that, has said no to the European financial stability
:40:59. > :41:04.mechanism. Britain is still part of it and the IMF. Needs it apply the
:41:04. > :41:09.same logic to groz and Portugal and Ireland as well? For the past 13
:41:09. > :41:13.months the Government has, in fect, been increasing our contingent
:41:13. > :41:17.liabilities by something like �21 billion. That is 2p on the pound,
:41:17. > :41:22.income tax t could double the size of the British army. It is a huge
:41:22. > :41:25.amount of money. I'm pleased we're now changing course, and we are
:41:26. > :41:30.realising we can't continue to throw ever greater liabilities at
:41:30. > :41:35.sorting out a problem not of our own making. On that point of
:41:36. > :41:41.leadership, which you heard seemed to be bought into. Through as
:41:41. > :41:46.vacuum of leadership, you can't imagine a Schroeder getting this
:41:47. > :41:49.out of hand in the way it should. Remember we are 27 sovereign
:41:49. > :41:55.countries meeting together in the European Council, you can't just
:41:55. > :41:59.ram things through, there are 27 democracies that have chosen the
:41:59. > :42:05.leaders. You have to choose a consen with us among them. It is
:42:05. > :42:09.easy to say if they were - consensus and agreement among them.
:42:09. > :42:13.That doesn't work in the European Union, because we are 27 different
:42:13. > :42:17.countries. We begin and will end with Greece. I want to repeat this
:42:17. > :42:23.question I asked you before. Greece surely should not have been allowed
:42:23. > :42:30.into the euro in the first place, you didn't meet the conditions, it
:42:30. > :42:34.is obviously why now? I have been listening about the economics and
:42:34. > :42:38.the economy. You didn't judge a country if as if it was a big
:42:38. > :42:46.country like Lehman Brothers. This is a country and state, it is a
:42:46. > :42:51.state of living, human beings, very hardly working people. When Lehman
:42:51. > :42:55.Brothers blew down and brought out the whole system, nobody accused
:42:55. > :43:00.the employees of the Lehman Brothers. They accused the
:43:00. > :43:03.directors, it is a political problem. Europe, I have been
:43:03. > :43:09.listening about 27 democracies, what kind of growth and economic
:43:09. > :43:13.system. Some were created after wars. We had Yugoslavia, now we
:43:13. > :43:17.have three or four or five different states. We have different
:43:17. > :43:26.economies, we have different interests and we cannot have a
:43:26. > :43:30.Europe that uses the euro as a weapon to colonise poorer countries,
:43:30. > :43:34.or different different systems for country. The problem now for Greece
:43:34. > :43:40.is not only surviving it is designing the future. You cannot
:43:40. > :43:44.expect anybody to have a state with no future. We will leave it there,
:43:44. > :43:47.thank you very much. Now a quick look at tomorrow
:43:47. > :43:57.morning's front pages. The independent leads on the circus
:43:57. > :43:57.
:43:57. > :44:56.Apology for the loss of subtitles for 59 seconds
:44:56. > :44:59.That's all from Newsnight tonight. We wanted to leave you with the
:45:00. > :45:05.passing announced today of the Government's Central Office of
:45:05. > :45:15.information, set up in 1946. Tok and trade was what was sometimes
:45:15. > :45:18.referred to disparagingly as' ealth and safety! They produced some.
:45:18. > :45:26.Charley tried to do an extra big jump and he went over the edge and
:45:26. > :45:32.into the water. Charley nearly drowned. It was very
:45:32. > :45:40.lucky for him he caught on the line. Charley says next time we go