23/06/2011 Newsnight


23/06/2011

In-depth investigation and analysis of the stories behind the day's headlines with Gavin Estler.


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Tonight, Europe's leaders gather in Brussels, but should they be

:00:07.:00:13.

talking about bailout or a default. Loaded with debt and facing eye-

:00:13.:00:19.

watering austerity s Greece getting to the "can't pay-won't pay stage ".

:00:19.:00:22.

Our political editor has spent the day annoying important people.

:00:22.:00:27.

REPORTER: What do you think about the idea of leaving the euro?

:00:27.:00:31.

How much will British tax-payers have to cough up to save the Greek,

:00:31.:00:35.

you may not like the answer from Germany's Europe minister.

:00:35.:00:40.

A new landmark in history. More than 60 years after these men

:00:40.:00:44.

created the European project, we will ask if it really is the

:00:44.:00:48.

biggest crisis it has ever faced. Also tonight w what has the Labour

:00:48.:00:54.

leader got against democracy, Ed Miliband ditches Shadow Cabinet

:00:54.:00:57.

elections, Alan Johnson will be here to explain why.

:00:57.:01:04.

Roll up, roll up, why an attempt to get animals out of the circus ring

:01:04.:01:14.
:01:14.:01:16.

Good evening, the mess in Greece is not formally on the agenda of the

:01:16.:01:20.

Brussels summit, but it is on the mind of all the gathering leaders,

:01:20.:01:23.

the German Chancellor, Angela Merkel, says no formal decisions

:01:23.:01:29.

will be taken. She's well aware in Berlin there are posters for a new

:01:29.:01:32.

Euro-sceptic book by a German industrialists, demanding she

:01:32.:01:37.

rescue our money, as the title puts it. It will be your money too,

:01:37.:01:40.

although it is not clear how much Britain will be expected to stump

:01:40.:01:44.

up. Let's start in Brussels w our political editor. What is the mood

:01:44.:01:48.

like there tonight. I think the mood tonight is they

:01:48.:01:52.

are making progress. The European leaders have discussed the European

:01:52.:01:57.

economy over the last two or three hours over dinner and subsequently,

:01:57.:02:02.

in particular, of course, they had to discuss the Greek crisis. They

:02:02.:02:06.

have issued a statement about half an hour ago, in which they say they

:02:07.:02:10.

are urging European finance ministers to sort out the second

:02:10.:02:13.

Greek bailout package by early July, in other words, within the next few

:02:13.:02:16.

days. They welcomed the vote of confidence that the Greek Prime

:02:16.:02:19.

Minister got in the Greek parliament earlier in the week. But

:02:19.:02:24.

they are also saying to Greece, look, you have got to forget

:02:24.:02:28.

domestic political squabbles, that for any package of austerity

:02:28.:02:33.

measures to work in your country, you have to have cross-party

:02:33.:02:37.

support. That is a prerequisite for success, European leaders are

:02:37.:02:41.

telling the Greeks. They are saying, the Irish have managed to pass

:02:41.:02:45.

tough measure, the Portuguese have managed to pass tough measure,

:02:45.:02:48.

those economies are on the way to economy, you have to do the same.

:02:49.:02:55.

That was the message from tonight. EU leaders gathered here tonight in

:02:55.:03:01.

what many think is the worst crisis in more than 50 years of the

:03:01.:03:04.

European Community. A member-state is about to default on its detects,

:03:04.:03:09.

and maybe leave the euro. With unthinkable consequences for

:03:09.:03:16.

several other EU countries. And the whole European economy.

:03:16.:03:19.

Indeed, the Greek Prime Minister arrived here tonight, saying this

:03:19.:03:22.

wasn't just a crisis for Greece. This is a fight for the Greek

:03:22.:03:27.

people. This is a fight for Greece, for our country, but it is also a

:03:27.:03:33.

fight for a common European currency and the common Europe.

:03:33.:03:37.

Germany's Angela Merkel warned that nothing substantial is likely to be

:03:37.:03:41.

decided this week on the Greek situation.

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TRANSLATION: In such a situation, everyone must stand together in a

:03:46.:03:48.

country. This is achieved in Ireland and in Portugal, and

:03:48.:03:57.

therefore we pressed for this also to be achieved in Greece. REPORTER:

:03:57.:04:03.

Can Greece be saved Prime Minister? David Cameron reeling from charges

:04:03.:04:09.

of bullying from a Tory MP back home kept quiet. Earlier in praying,

:04:09.:04:12.

Mr Cameron claimed to have assurances from Germany that

:04:12.:04:15.

Britain wouldn't have to pay towards the proposed second bailout

:04:15.:04:21.

for Greece. As thepm has insisted, several - PM has insisted several

:04:21.:04:25.

times this week. I have received assurances from other countries,

:04:25.:04:29.

including from the Germans, that this won't be the case, and I'm

:04:29.:04:34.

sure that they will staik stick to those assurances, and whatever

:04:34.:04:38.

arrangements are reached in Europe for the eurozone and for Greece,

:04:38.:04:41.

will not include the European financial mechanism. Earlier this

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afternoon, socialist leaders met to discuss solidarity for their Greek

:04:47.:04:50.

colleagues. Their President admitted this is indeed a decisive

:04:50.:04:54.

moment. How serious is this crisis do you think, historically?

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know, as a former Prime Minister and economist, who recalled the oil

:05:00.:05:05.

crisis in the 70s, who have read about the crisis in the 30, who

:05:05.:05:08.

knows the development after the Second World War, so this is the

:05:08.:05:13.

worst crisis in the history of the European Union. That is why I

:05:13.:05:18.

really appeal to the European Council, please understand that

:05:18.:05:23.

time has come now not only to think on your own country in the

:05:23.:05:26.

traditional way when you come as Prime Minister to fight for your

:05:26.:05:32.

interests, think of Europe as a whole, and we have never, ever been

:05:32.:05:35.

challenged so seriously as we are now.

:05:35.:05:41.

But Cathy Ashton, the Britain who is Europe's High Representative for

:05:41.:05:42.

Foreign Affairs, refused to be drawn.

:05:42.:05:46.

REPORTER: How big a crisis do you think it is in the EU? Leave it to

:05:46.:05:56.
:05:56.:05:58.

them. It's been reported tonight that the

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President of the European Council has said that the European

:06:00.:06:05.

financial stability mechanism will not be used as part of the second

:06:05.:06:11.

bailout for Greece. That is in line with what David Cameron has been

:06:11.:06:14.

saying today, that he has had reassurances from various people,

:06:14.:06:17.

including the Germans as you saw, that Britain won't have to

:06:17.:06:21.

contribute to the bailout. Of course if that stability mechanism

:06:21.:06:25.

was used, then Britain's contribution to that mechanism is

:06:26.:06:30.

likely to be part of the bailout. It now looks like that is not going

:06:30.:06:34.

to be a part Greek bailout. Tomorrow they come back here, but

:06:34.:06:39.

they come back here at 9.00am. There are other important things on

:06:40.:06:43.

the agenda tomorrow, including immigration, a big issue here, and

:06:44.:06:48.

in particular, the effect of the Arab Spring, and the effect of huge

:06:48.:06:52.

numbers of refugees on southern Europe, and British concerns that

:06:52.:06:57.

may be the rules might be relaxed, and so therefore there is going to

:06:57.:07:02.

be some pretty tough talking tomorrow on that issue after the

:07:02.:07:05.

equally important, perhaps more important issue of the Greek crisis

:07:05.:07:13.

tonight. For a German perspective on this,

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earlier I caught up with German's Europe minister, who is in Berlin.

:07:17.:07:22.

Whatever is decided in Brussels, do you accept that a Greek default is

:07:22.:07:27.

inevitable? I do not believe it is necessary. I think it can be

:07:27.:07:31.

avoided, if we take wise decisions, if the Greeks take the wise

:07:31.:07:35.

decisions next week. The crucial vote in the Greek parliament will

:07:35.:07:39.

be next week, not tomorrow, but the European Council can pave the way

:07:39.:07:44.

for a setting in which the Greeks might be able to come to a

:07:44.:07:48.

reasonable solution in their parliament. But you have in Greece

:07:48.:07:53.

a country which is already loaded up with debts that it can't pay, an

:07:53.:07:55.

austerity package that is extremely unpopular, and the best some people

:07:55.:08:00.

think you can do in Brussels is postpone the inevitable. This is a

:08:00.:08:06.

very risky approach, I think a chaotic situation could be very

:08:06.:08:12.

dangerous not only for Greek banks, for Greek society, for the Greek

:08:12.:08:17.

economy, but also for neighbours and the entire European Union. This

:08:17.:08:21.

might be quite disastrous. A chaotic situation should be avoided

:08:21.:08:24.

and I believe can be avoided. Wouldn't it be better for Greece

:08:24.:08:28.

and the euro if Greece just left the eurozone, it could then devalue

:08:28.:08:33.

and avoid the worst problems of the austerity package. As you know many

:08:33.:08:36.

German citizens are now saying you shouldn't have let Greece into the

:08:36.:08:39.

euro in the first place? We have to cope with the situation the way it

:08:39.:08:44.

is now. I believe it is not possible to leave the euro zone,

:08:44.:08:50.

simply because that would produce a chaotic situation, in that chaos I

:08:50.:08:55.

believe the Greek banks would go down the drain immediately, taking

:08:55.:08:59.

quite a few others with them. This is why I believe it is an untenable

:08:59.:09:04.

proposia. The Greek Government is proposing what amounts to a fiscal

:09:04.:09:10.

consideration of 12%, they don't have the - contraction of 12%, they

:09:10.:09:13.

don't have support for that, that is a problem for them, but also for

:09:13.:09:18.

you, without that support you can't go ahead? I think it is indeed a

:09:18.:09:22.

very irritating situation, that unlike in Portugal, the opposition

:09:22.:09:26.

in Greece is not ready to support the necessary. Although this Greek

:09:26.:09:31.

opposition has been in power until something like 18 months ago and it

:09:31.:09:35.

probably not - is not completely without responsibility for the

:09:35.:09:40.

situation with which we have to deal with now. Can you confirm

:09:40.:09:48.

Angela Merkel's position on a couple of things, is the

:09:48.:09:50.

privatisation voluntary, and will banks agree with things that will

:09:50.:09:54.

cost them money? In the present credit agreement there is no clause

:09:54.:09:59.

for participation in the solution of such a problem which we face now.

:09:59.:10:04.

So the voluntary solution is the only one that is probably legally

:10:04.:10:09.

possible. But it can be pursued by making it attractive for the banks

:10:09.:10:13.

and the other holders of titles against Greece, because otherwise

:10:13.:10:18.

we might end up in a very chaotic situation in which the suffering

:10:18.:10:22.

for those who hold these assets is even worse. I think there are good

:10:23.:10:29.

reasons for a co-operative approach on the side of those who hold these

:10:29.:10:33.

assets. I hear from the German banks they are ready to co-operate.

:10:33.:10:36.

Can you also confirm whether Chancellor Merkel has come to an

:10:36.:10:40.

agreement with the British Prime Minister, that Britain will not

:10:40.:10:44.

contribute to the European bailout fund through the European Stability

:10:44.:10:49.

Mechanism, but only through the IMF commitment? I do not know what the

:10:49.:10:52.

outcome of the talks between the Prime Minister and the Chancellor

:10:52.:10:58.

have been today. I think they met within the more centre right parts

:10:58.:11:02.

of the political spectrum, and within that circle there might have

:11:02.:11:07.

been an agreement, I'm not aware of it. Understand this is a matter of

:11:07.:11:10.

some importance to the British Government, obviously they will

:11:10.:11:15.

live up to the IMF commitment, but this is a different matter?

:11:15.:11:18.

commitments are crucial for Britain, I have no doubt that the UK will

:11:18.:11:23.

fulfil them, on the other hand, the good future of the YuriGagarino50

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Roy is in the very best - euro is in the very best interests of the

:11:29.:11:34.

UK, although it is not part of the eurozone, I wouldn't be surprised

:11:34.:11:38.

if we see a co-operative mood in the UK as well. One criticism in

:11:38.:11:43.

Germany is the lack of leadership from Sarkozy and Merkel, and David

:11:43.:11:47.

Cameron can't lead because we are not in the euro and there is a lack

:11:47.:11:52.

of leadership in the heart of Europe? I wouldn't disagree, I

:11:52.:11:56.

would not point to specific personal tee, but I would say

:11:56.:12:00.

Europe needs stronger leadership. What we obviously need is the

:12:00.:12:05.

Europe that does not take decisions in field where is regional and

:12:05.:12:09.

national decisions are completely sufficient, but have a couple of

:12:09.:12:13.

areas where we need more Europe and the currency question is one of

:12:13.:12:20.

those areas. Our economics editor, Paul Mason,

:12:20.:12:24.

was in Greece for Newsnight last week, he's still tracking the story

:12:24.:12:29.

for us what do you think they are actually trying to come up with in

:12:29.:12:36.

Brussels? It is on a knife edge, it could all come together or fall

:12:36.:12:44.

apart. The principle they are looking at is in a light way

:12:44.:12:52.

"forebearance", or in a heavy way "self-deillusion". What account

:12:52.:12:56.

Greeks deliver, the 28 billion of auts terity signed up to and can't

:12:56.:13:00.

get through the Greek parliament wasn't enough and they needed 5

:13:00.:13:04.

billion more. He said he can deliver that and here are the extra

:13:04.:13:08.

things I can do. He spend the weekend telling his MPs and the

:13:08.:13:12.

party that he was going to do less, and soften the austerity package.

:13:12.:13:16.

Then we have the bondholders, they are all going quietly told, these

:13:16.:13:19.

are people who have lent Greece money, you will voluntarily role

:13:19.:13:23.

over that loan for five years. Meanwhile, in the markets, the

:13:23.:13:28.

technicalties are that if they change the terms of those loans,

:13:28.:13:33.

the rules say it is a default. So we just don't know whether this

:13:33.:13:36.

forebearance approach will bear fruit, and the ultimate test of it

:13:36.:13:41.

is the tear gas and the steel- tipped batons and the rocks

:13:42.:13:47.

breaking on St Agnes Square, as is depressingly likely they will do

:13:47.:13:49.

next week. We have some more clarification of what Britain might

:13:49.:13:55.

be liable for in all of this? Britain is, whatever Mr Cameron

:13:55.:14:02.

says, if the 60 billion, smaller European stability fund is actually

:14:02.:14:08.

activated, we are liable for about seven billion euros of it, we have

:14:08.:14:12.

put in 1.2 billion euros so far. Nobody is activating it, that is

:14:12.:14:16.

the situation at the moment. That is fine, because the scale of the

:14:16.:14:20.

problem is too big in Greece for that fund to be applied to. The

:14:20.:14:26.

question, I think, that we will look back on. You heard there, that

:14:26.:14:30.

the European socialist leader is saying that everybody should be

:14:30.:14:34.

collaborative, and the Germans there, let's have some leadership,

:14:34.:14:37.

Mr Cameron can come back and say, look, I have achieved something,

:14:37.:14:41.

because we are not taking part in the Greek bailout. Is that what you

:14:41.:14:49.

want to achieve? The reason this 60 billion fund exists is because it

:14:49.:14:55.

is a solidarity fund is for it is the 27 nation European Union for

:14:55.:15:00.

the currency that has been, like it or not, written into the

:15:00.:15:03.

constitution. It is still part of the European project. The question

:15:03.:15:05.

remains for the coalition Government, how much leadership

:15:05.:15:09.

does it want to show? Good question, we will pursue the

:15:09.:15:13.

answer over the next few days. A little later we will return to

:15:13.:15:16.

the European project and ask if this crisis really is the biggest

:15:16.:15:21.

it has ever faced. The circus came to town today, or

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at least to the House of Commons, where there were some quite

:15:25.:15:29.

peculiar scenes in a debate over whether to ban wild animals from

:15:29.:15:33.

the big top. You might have thought the Government have had other

:15:33.:15:37.

things to think about, but they spent the day fighting against a

:15:37.:15:45.

bill brought in by an MP who said staff at Downing Street tried to

:15:45.:15:51.

stop him publishing it. You may find some of these scenes upsetting.

:15:51.:15:58.

This is the last elephant in British circus, his mistreatment

:15:58.:16:03.

has brought the continuing misuse of wild animals as entertainment to

:16:04.:16:12.

prominence. Today 200 MPs who want to ban the use of all wild beasts

:16:12.:16:15.

in circuses secured a debate in the House of Commons, and were joined

:16:15.:16:22.

by celebrity backers too. I think the ayes have it. When the vote

:16:22.:16:26.

came, the Government position was defeated without even a division.

:16:26.:16:30.

That doesn't mean there will be a ban on wild animals in the big top.

:16:30.:16:34.

This was a backbench debate and the result isn't binding. But although

:16:34.:16:40.

it all looked very consensual, behind the scenes it resembled a

:16:40.:16:45.

bear pit. Backbench MPs here at Westminster have been regaling me

:16:45.:16:49.

with heart rending tales of cruelty, intimidation, degradation, they

:16:49.:16:53.

haven't been talking about the treatment of animals, they have

:16:54.:16:56.

been talking about their own treatment at the hands of the whips.

:16:56.:16:59.

Colleagues of Mark Pritchard, the Conservative MP, who has led the

:16:59.:17:02.

calls for ban, says he was contacted on three separate

:17:02.:17:05.

occasions by Downing Street, including late last night, in an

:17:05.:17:09.

attempt to get him to water down his proposal, he was told if he

:17:09.:17:16.

didn't do so his career could be endangered. I was offered incentive

:17:16.:17:21.

and reward on Monday, it was ratchetted up to last night where

:17:21.:17:25.

he was threatened. I had a call from the Prime Minister's office

:17:25.:17:30.

directly, I was told unless I withdraw this motion that the Prime

:17:30.:17:40.
:17:40.:17:41.

Minister himself said that he would look upon it very dimly indeed.

:17:41.:17:46.

This followed some audacious movements from the Government,

:17:46.:17:51.

initially there was a three-line whip on MPs to oppose an outright

:17:51.:17:55.

ban. But the Commons speaker refused to allow a Government

:17:55.:17:58.

compromise to be discussed, and backed off and allowed MPs to vote

:17:58.:18:02.

as it pleased. This morning's roar of the lion had become this

:18:02.:18:07.

evening's squeak of the mouse. It had been pretty clear which way

:18:07.:18:14.

things were going, when one MP, who didn't support a ban, failed to

:18:14.:18:19.

tame his fellow politicians. looks all very cruel. The reality

:18:19.:18:25.

is many of these animals, many of these animals have been so

:18:25.:18:29.

domesticated over so many years, that to wrench them out of the life

:18:29.:18:36.

they are used to, would be, would I believe be more cruel, would be

:18:36.:18:41.

more cruel than to allow them to continue. The welfare is what the

:18:41.:18:48.

Government has to implement. official Downing Street line is

:18:48.:18:51.

they were reluctant to make policy on the hoof. They say they had

:18:51.:18:55.

advice that ban could face a legal challenge. But the Government's

:18:56.:19:02.

opponents say they shunned be riding roughshod over public

:19:02.:19:05.

opinion. This former party animal is more interested in animal

:19:05.:19:10.

welfare these days, the designer, Meg Matthew, once attended Downing

:19:10.:19:13.

Street receptions as the wife of Noel Gallagher. And after today's

:19:13.:19:17.

debate she's calling on the current occupant of Number Ten to back

:19:17.:19:21.

fully an outright ban. They are mentally and physically broken down

:19:21.:19:26.

these wild animals, it is for entertainment. We are supposed to

:19:26.:19:31.

be an animal-loving nation and it is barbaric. She said the Prime

:19:31.:19:34.

Minister might have had a particular reason for not want to

:19:34.:19:40.

go support a ban. The reason David Cameron stepped in, is because in

:19:40.:19:44.

his constituency he has the biggest wild animal breeders in the country.

:19:44.:19:48.

So there you go. I contacted the company concerned

:19:48.:19:52.

and they said they had never met David Cameron or lobbied him on

:19:52.:19:58.

this issue and the suppliers of wild animals to drama productions,

:19:58.:20:04.

not to circuses wouldn't be affected by a ban in this case.

:20:04.:20:08.

Downing Street are rejecting the accusation that is the Prime

:20:08.:20:13.

Minister was baring his teeth on this issue, he knew that circuses

:20:13.:20:18.

and wild animals would be banned in due course, but he didn't want an

:20:18.:20:20.

early ban because he couldn't promise what he couldn't deliver.

:20:20.:20:24.

The Government is remining us for the meantime it is committed to a

:20:24.:20:30.

tougher licensing regime, but at the last count n2009, only 39 wild

:20:30.:20:33.

animals were used in British circuses, it is estimated fewer now,

:20:33.:20:39.

20 or so, is that worth putting a political career in danger. If the

:20:39.:20:43.

Government is serious about listening to parliament, if it is

:20:43.:20:45.

serious about seeing parliament reassert its authority, on days

:20:45.:20:49.

like today it needs to stand aside and allow Members of Parliament not

:20:50.:20:55.

to be robot, but occasionally speak out on issues they feel strongly

:20:55.:21:01.

about. We can assure you no animal was hurt in the making of our

:21:01.:21:04.

programme. A few parliamentary careers might have been damaged and

:21:04.:21:10.

some very senior egos bruised. We have some news broken in the past

:21:10.:21:14.

hour about the Labour leader, Ed Miliband, trying to end elections

:21:14.:21:18.

to the Shadow Cabinet, why is he doing this? There is a review of

:21:18.:21:21.

Labour's internal workings going on at the moment. It is part of this

:21:21.:21:26.

they are looking at a whole range of issues, including elections to

:21:26.:21:30.

the Shadow Cabinet. Ed Miliband believes elections to the Shadow

:21:30.:21:33.

Cabinet, happening only in opposition, would be a distraction,

:21:33.:21:37.

he says look the party should be looking to voters not turning in on

:21:37.:21:42.

itself. That is his reason for doing it. Some cynics might point

:21:42.:21:47.

out that around that Shadow Cabinet table there are more supporters for

:21:47.:21:50.

his brother for the Labour leadership than himself. There is

:21:50.:21:54.

another problem he's trying to solve here as well, in the run up

:21:54.:21:57.

to this party's annual conference in September he wants to push

:21:57.:22:03.

through a whole package of measure, a whole package of reforms. What

:22:03.:22:07.

some party insiders have said he has chosen the wrong issue, talking

:22:07.:22:11.

about the Shadow Cabinet, he needs to talk about a new way to elect

:22:11.:22:17.

the party leader, he's being pummel bid the Government for being put in

:22:17.:22:25.

by trade union votes. What about the MPs? The MPs who

:22:25.:22:28.

elect Shadow Cabinet members, he will not talk to them until Monday

:22:28.:22:33.

night about this. One of them John McDonald, wanted to talk to him

:22:33.:22:39.

tonight. I'm really disappointed, I hear that people around Ed Miliband

:22:39.:22:43.

are spinning this as his Clause IV moment, where he demonstrates

:22:43.:22:51.

strong leadership by beating the party into sub mis, I think he has

:22:51.:22:55.

misread the situation. I have been talking to some other members of

:22:55.:22:57.

the parliament and the national executive, and they have to agree

:22:58.:23:01.

on these changes. One said Ed Miliband needs to make the Shadow

:23:01.:23:05.

Cabinet more effective rather than worrying how it is elected. Another

:23:05.:23:09.

said it would cause ructions in the party, another said is he as

:23:09.:23:14.

consensual as he presented himself. In his favour, Labour in Government

:23:14.:23:17.

don't allow the cabinet to be elected, they are chosen by the

:23:17.:23:22.

leader, and the Conservatives, it is not an earth-shattering moment,

:23:22.:23:27.

if you do it in opposition. We're joined by the former Home Secretary.

:23:27.:23:31.

Why did Ed Miliband choose today to come out against democracy in the

:23:31.:23:35.

parliamentary Labour Party? hasn't come out against democracy.

:23:35.:23:40.

We should put the election of the Shadow Cabinet in the same place as

:23:40.:23:45.

animals performing in circuses. It is about time this changed. It is

:23:46.:23:52.

shorely welcome. Not by everybody, we just heard John McDonald and

:23:52.:23:55.

others? There will be a vote of the parliamentary Labour Party, this

:23:55.:24:00.

will sail through. As far as the time is concerned, on Saturday we

:24:00.:24:03.

have the National Policy Forum in Wrexham, maybe this came out and

:24:04.:24:08.

they decided they would project it themselves rather than have a leak.

:24:08.:24:13.

It is absolutely sensible and wise to do this. Can you imagine Alex

:24:13.:24:15.

Ferguson as the manager of Manchester United being told, look,

:24:15.:24:20.

you are not allowed to pick your team, the squad will elect your 11

:24:20.:24:24.

first team players. You can play them in whatever position you want,

:24:24.:24:30.

they will elect them. Why has it been so daft for so long? Good

:24:30.:24:34.

question. We were in Government for 13 years and we weren't thinking of

:24:34.:24:37.

these things. It is amazing, you are quite right, this isn't

:24:37.:24:42.

disappear along with some of the other nonsense that is a relic from

:24:42.:24:45.

when Labour Governments were short interludes in Conservative rule.

:24:45.:24:48.

That has all changed now, we are party of Government. It is

:24:48.:24:51.

absolutely right to make this change. Do you worry that the

:24:51.:24:55.

message in tomorrow morning's newspapers wonts be that, it will

:24:55.:24:58.

be Ed Miliband doesn't rate some members of the Shadow Cabinet and

:24:58.:25:02.

he wants to get rid of them because he can't stand the sight of them

:25:02.:25:06.

around the table. God knows what will be in the press tomorrow, I'm

:25:06.:25:11.

not worried about that at all. No- one in their right minds would have

:25:11.:25:15.

a leader that can't pick their Shadow Cabinet. Nobody in their

:25:15.:25:18.

right minds would do that. In Government that rule doesn't apply.

:25:19.:25:22.

If it doesn't apply in Government it shouldn't apply in opposition,

:25:22.:25:25.

fighting to get into Government. It is a distraction, and it is a relic

:25:25.:25:29.

from the past. It has nothing to do with the quality of the Shadow

:25:29.:25:32.

Cabinet, which is actually very good. It has nothing to do with

:25:32.:25:36.

that at all. I think there might be a bit of nonsense about that,

:25:36.:25:40.

generally most people will say, about time. Probably 15 years

:25:40.:25:43.

overdue. Isn't this, I mean the other part of it is maybe this

:25:43.:25:49.

itself is a bit of a distraction. The big question face ing your

:25:49.:25:52.

party coming up to the party - facing your party coming up to the

:25:53.:26:01.

party conference is what are you for, what are you offering, what

:26:01.:26:04.

will you do for the British public, this has nothing to do with that

:26:04.:26:08.

but to do with personalities? process of looking at the defeat,

:26:08.:26:14.

it was a heavy defeat for us last year, is coming to a head in these

:26:14.:26:20.

policy forums, one aspect of it is the party structure. You were right

:26:20.:26:25.

to mention early on how we elect the leader. This will all be part

:26:25.:26:29.

of it. This isn't it, the way we elect the Shadow Cabinet, there

:26:29.:26:33.

will be all of that and the concentration on policy. That

:26:33.:26:37.

doesn't detract from the fact that we had this hangover from the past,

:26:37.:26:41.

we should have got rid of it while we were in Government and changing

:26:41.:26:45.

lots of things. For whatever reason we didn't, now we should do it as

:26:45.:26:49.

quickly as possible. That is interesting, you say Ed Miliband is

:26:49.:26:54.

committed to changing the system to which Labour leaders, including

:26:54.:26:58.

himself, are elected? He said some while back, when I made comments on

:26:58.:27:03.

this, he thinks it has to change. The job that Peter Hain is doing on

:27:03.:27:06.

this particular work t would be strange, weird, perverse, if we do

:27:06.:27:10.

all of that and don't look at the way we elect the leader. Just a

:27:10.:27:15.

final thought. How then, what's the mechanism for getting this through.

:27:15.:27:19.

You can't just think Ed Miliband can't just dictate this to the

:27:19.:27:22.

party. How does he push these things through? The rules are about

:27:22.:27:26.

what the NEC decides and what conference decides. What Ed is

:27:26.:27:29.

saying, from my understanding, is he will ask the parliamentary

:27:29.:27:33.

Labour Party, who is the electorate for the Shadow Cabinet. He will ask

:27:33.:27:36.

them to vote on this, we will have a debate in the parliamentary

:27:36.:27:42.

Labour Party, and we will have a vote on it. A secret ballot. I

:27:42.:27:46.

think that's absolutely the right way to do it, as well as the other

:27:46.:27:55.

mechanisms in the rule back. - Book.

:27:55.:27:59.

More on the troubles in the eurozone.

:27:59.:28:05.

Olli Rehn gave a blunt statement this week that Greece's problems in

:28:05.:28:10.

Europe are the biggest crisis since World War II.

:28:10.:28:14.

There have been plenty of crisis, the Maastricht Treaty, and Margaret

:28:14.:28:18.

Thatcher's handbagging of various European leaders.

:28:18.:28:23.

How serious is it this time? We must build a kind of united

:28:24.:28:33.

states of Europe. In this way only will hundreds of millions of

:28:33.:28:40.

toilers be able to regain the simple Joyce and hopes which - joys

:28:40.:28:45.

and hopes that make life worth living.

:28:45.:28:47.

Europe's union grew out of the experience of what happens when

:28:48.:28:52.

national interest is pursued to its ultimate most terrible conclusion.

:28:52.:28:57.

What could have been more logical to Britain's war leader, than a way

:28:57.:29:04.

of subsuming those rivalries in the common good. Right from the start,

:29:04.:29:09.

the European Community was seen as a mechanism for binding Germany,

:29:09.:29:13.

peacefully, within the wider European family. People were still

:29:13.:29:19.

fixated on the horrors of war. As the decades have passed, its

:29:19.:29:23.

purpose has shifted subtley, to moderating what would otherwise be

:29:23.:29:31.

the political and economic power of unified Germany.

:29:32.:29:36.

The sounding of the coal and steel community in 1951 marked the start

:29:36.:29:41.

of a process. Their first working session for the plan to pool steel

:29:41.:29:46.

and coal. The Six Nations, all now part of the euro, sought to make

:29:46.:29:54.

war impossible by closer economic integration.

:29:54.:29:59.

In the beginning it was to moderate and contain Germany. Later on the

:29:59.:30:02.

core mission of the European Union became the preservation of peace

:30:02.:30:06.

and co-operation in the European Union, and now I think we are

:30:06.:30:12.

moving in the direction of a European Union which internally

:30:12.:30:15.

might be capable of co-ordinates its economic policy more than it

:30:15.:30:21.

did in the past in which externally is not stablising itself, but

:30:21.:30:25.

trying to export stability to other parts of the world.

:30:25.:30:29.

As the European Community flourished, even Britain decided to

:30:29.:30:34.

knit itself into this new creation. Self-interest was beginning to take

:30:34.:30:39.

over. For the British, the appeal lay in

:30:39.:30:44.

growing a single economic space, rather than in pushing forwards

:30:44.:30:50.

ever greater European integration. The President of the Commission

:30:50.:30:54.

said at press conference the other day that he wanted the European

:30:54.:30:56.

Parliament to be the democratic body of the community, he wanted

:30:56.:31:00.

the commission to be the executive, and he wanted the Council of

:31:00.:31:10.
:31:10.:31:10.

Ministers to be the Senate, no. No. The collapse of the Soviet bloc

:31:10.:31:16.

both created a united Germany, much bigger than France or Britain, and

:31:16.:31:20.

offered the possibility for many new countries to join. Elites

:31:20.:31:25.

across the continent saw the chance to push for further integration to

:31:25.:31:31.

bind this growing family together. It is obviously create bid elites,

:31:31.:31:34.

because ordinary people will not suddenly think up something like

:31:34.:31:41.

that, so let's create it. That doesn't mean that this is some

:31:41.:31:49.

elite idea that is shoved down the throat of other people. But the

:31:49.:31:52.

elites who favoured the euro, the constitution and ever greater

:31:52.:31:57.

political integration started to run foul of public opinion. France

:31:57.:32:03.

and the Netherlands voted "no" to the institution. Other countries

:32:03.:32:07.

stay the out of the euro, national interests was reaverting itself.

:32:07.:32:11.

These days Germany boasts Europe's biggest population, and by far its

:32:11.:32:17.

most successful exporting economy. And an increasing numbers of

:32:17.:32:21.

Germans are wondering why they should remain quite so closely tied

:32:21.:32:25.

to a European Union that requires them to keep bailing out less

:32:25.:32:30.

successful members and so restrict their economic freedom of action.

:32:30.:32:35.

The need to finance huge deficits in Greece or Spain, has produced

:32:35.:32:40.

anger in Germany, propping up the euro has become horribly expensive.

:32:40.:32:45.

That lead some to want to ditch it, but supporters of the European

:32:45.:32:51.

project arguinging the case for resuming the process of integration.

:32:51.:32:56.

When I and my constituents who later on in the Foreign Ministry

:32:56.:33:00.

was decribing the European project, there were always two competing

:33:00.:33:04.

desires, on the one side, you see it now, nobody wanted to pay for

:33:04.:33:08.

the economic shortcomings and mistakes of another country n this

:33:08.:33:13.

case Greece. But, on the other side, Germany wants to have a friendly

:33:13.:33:17.

relationship with all its neighbours, and by the way, its

:33:17.:33:23.

most important trading partners. When you put these two in balance

:33:23.:33:27.

the pro-European argument was always winning. If some see in

:33:27.:33:31.

Greece's turmoil a chance for another leap forward, others think

:33:31.:33:36.

that simply won't garner support across the union. For as long as

:33:36.:33:41.

Germany and others are prepared to bail out the euro, it and the union

:33:41.:33:51.
:33:51.:33:51.

itself are likely to survive. I'm joined by an adviser to the

:33:51.:33:56.

European President. The grok communist - the Greek communist

:33:56.:34:01.

party member, and my other guest. Is this the end for Greece in the

:34:01.:34:07.

euro do you think? It might be, but there could be a chance for Europe

:34:07.:34:12.

itself, because I think this is practically the end of the so-

:34:12.:34:18.

called modern Europe. The euro is not the solution. It starts being

:34:18.:34:23.

more or less a hell, not only for Greek, but for the so-called

:34:23.:34:28.

western economy. By killing Greeks, killing their future, taking their

:34:28.:34:33.

country, their streets, their island, the sun, everything they

:34:33.:34:36.

produce, for years and years and years now, this is not going to

:34:37.:34:45.

save the system. There is a pathogony in the system, it is not

:34:45.:34:50.

a monetary answer. The euro won't save the Greece, it may be the

:34:50.:34:54.

problem for Greece, let me put that? With respect, Greece would be

:34:54.:34:58.

in a far worse situation if it wasn't receiving a loan from other

:34:58.:35:02.

fellow European countries. On the euro itself, we forget the

:35:03.:35:08.

YuriGagarino50 owe as a whole is doing - euro is doing well, it has

:35:08.:35:12.

lower public debt than the US, UK or Japan, economic growth has

:35:12.:35:20.

returned, it last a balance of payments elibum, that is better on

:35:20.:35:24.

- equilibrium, it is better than the pound. Except you have riot

:35:24.:35:26.

anything Greece, and austerity measures they can't pay for?

:35:27.:35:33.

have three countries that have run up excessive debts in the euro,

:35:33.:35:37.

countries outside Europe have done that as well. It is not to do with

:35:37.:35:42.

the euro. Inside the euro they are able to address it with loans and

:35:42.:35:46.

grants, we are not giving the money we are lending the money. From

:35:46.:35:55.

fellow eurozone countries. You were nodding when that remark

:35:55.:36:00.

was made, the first time you agreed with a communist politician, was

:36:00.:36:08.

that an "I told you so"? Nobody wants to be that person to say that,

:36:08.:36:13.

we have agreed that countries should be able to default on debts,

:36:13.:36:21.

and we have been arguing that for a number years. It is the least worst

:36:21.:36:25.

option. People think that will be chaotic? Pressing another high-

:36:25.:36:28.

interest loan on someone will not help them. The bailouts have added

:36:28.:36:35.

to the amount of debt that the Greeks have to pay out. It would be

:36:35.:36:41.

better to let them default like Latin American countries did ten

:36:41.:36:44.

years ago. I wonder how far the elites in Europe are disconnected

:36:44.:36:48.

from the people in Europe. That is true of your Government and the

:36:48.:36:52.

Government of Greece as well? Definitely, they are completely

:36:52.:36:57.

disconnected. I think that it is like an autocracy, and we are going

:36:57.:37:04.

back about 300 years. We lose every working-class right, we are losing

:37:04.:37:08.

things European people fought for. There is no future, my dear, the

:37:09.:37:13.

eurozone is not a state, it is just an area. Some make money, I think

:37:13.:37:21.

that the north is making money the south loses. You can't have the

:37:21.:37:24.

same currency, the same measure, with exporting countries like

:37:24.:37:30.

Germany, and importing countries like Greece. Afterall, you can't

:37:30.:37:40.
:37:40.:37:40.

have people I made a mistake, I trusted you, you put you in, if you

:37:40.:37:45.

go to any bank in London, and you someone without enough money, you

:37:45.:37:49.

don't give him a credit car. That means Greece shouldn't have been

:37:49.:37:55.

allowed into the euro in the first place? No, I think Greece needs to

:37:55.:37:58.

start disengaging from big organisations not helping the new

:37:58.:38:05.

generation fight for a future. Like NATO, look we are in ceeth, we have

:38:05.:38:14.

beautiful sun, we still have a beautiful American base where

:38:14.:38:18.

aircraft can begin their trip to Libya. This question of the elites

:38:18.:38:21.

being out-of-touch, people in Germany are saying that too? What

:38:21.:38:30.

is this deal they say, why are we working so hard to pay for these

:38:30.:38:34.

countries what does it have to do with us. Do you accept the point

:38:34.:38:38.

that the elites are out-of-touch? They are usually elected

:38:38.:38:42.

representatives in our 27 democracies in the nuep, confronted

:38:42.:38:46.

with our - in the European Union, confronted with the interdependance,

:38:46.:38:52.

like it or not, and we find Greece has gotten into a difficult

:38:52.:38:56.

situation through their own decisions. We are trying to get

:38:56.:39:00.

them to restore credibility, we are helping by loans, not grants, it

:39:00.:39:07.

would be far worse for Greece if we weren't doing that. The idea we

:39:07.:39:12.

could let Greece go bankrupt, come on, learn the lessons of a few

:39:12.:39:16.

years ago, remember Lehman Brothers, we thought that was in America and

:39:16.:39:20.

won't have nothing to do with us. It had knock-on effects throughout

:39:20.:39:24.

the world. It is the same with Greece, if it started to default it

:39:24.:39:31.

would have a knock-on effect on banks across the world. Britain has

:39:31.:39:38.

the third eyest level of banking liability, - highest level of

:39:38.:39:41.

banking liability. Would the European project, in your opinion,

:39:41.:39:45.

not survive if Greece was allowed to default, is that what you are

:39:45.:39:50.

saying, is it that bad? It is not to do with the European project.

:39:50.:39:54.

With Lehman Brothers it was not to do with the dollars surviving, it

:39:54.:39:57.

would have huge negative economic consequences across the rest of

:39:57.:40:05.

Europe the inside and outside the eurozone and the European Union.

:40:05.:40:10.

Richard and oir people, arguing for more yuep Europe are in favour of

:40:10.:40:16.

the euro, - Richard and other people, arguing for more Europe are

:40:16.:40:19.

in favour of the euro. Greece's debts are increasing faster than

:40:19.:40:23.

its economy. Greece can't be in a situation where she is not going to

:40:23.:40:29.

be unable to pay back her debts, without some sort of default, it is

:40:29.:40:34.

mathematics, not public opinion. I raised the question of lack of

:40:34.:40:37.

leadership in Europe, without pointing to personalities. You

:40:37.:40:41.

could say the same for parties, where is David Cameron's leadership

:40:41.:40:45.

on this? I'm very pleased the Prime Minister has said no to a Greek

:40:45.:40:49.

bailout. I would now like to see him extend that same logic.

:40:50.:40:54.

hasn't said that, has said no to the European financial stability

:40:54.:40:59.

mechanism. Britain is still part of it and the IMF. Needs it apply the

:40:59.:41:04.

same logic to groz and Portugal and Ireland as well? For the past 13

:41:04.:41:09.

months the Government has, in fect, been increasing our contingent

:41:09.:41:13.

liabilities by something like �21 billion. That is 2p on the pound,

:41:13.:41:17.

income tax t could double the size of the British army. It is a huge

:41:17.:41:22.

amount of money. I'm pleased we're now changing course, and we are

:41:22.:41:25.

realising we can't continue to throw ever greater liabilities at

:41:26.:41:30.

sorting out a problem not of our own making. On that point of

:41:30.:41:35.

leadership, which you heard seemed to be bought into. Through as

:41:36.:41:41.

vacuum of leadership, you can't imagine a Schroeder getting this

:41:41.:41:46.

out of hand in the way it should. Remember we are 27 sovereign

:41:47.:41:49.

countries meeting together in the European Council, you can't just

:41:49.:41:55.

ram things through, there are 27 democracies that have chosen the

:41:55.:41:59.

leaders. You have to choose a consen with us among them. It is

:41:59.:42:05.

easy to say if they were - consensus and agreement among them.

:42:05.:42:09.

That doesn't work in the European Union, because we are 27 different

:42:09.:42:13.

countries. We begin and will end with Greece. I want to repeat this

:42:13.:42:17.

question I asked you before. Greece surely should not have been allowed

:42:17.:42:23.

into the euro in the first place, you didn't meet the conditions, it

:42:23.:42:30.

is obviously why now? I have been listening about the economics and

:42:30.:42:34.

the economy. You didn't judge a country if as if it was a big

:42:34.:42:38.

country like Lehman Brothers. This is a country and state, it is a

:42:38.:42:46.

state of living, human beings, very hardly working people. When Lehman

:42:46.:42:51.

Brothers blew down and brought out the whole system, nobody accused

:42:51.:42:55.

the employees of the Lehman Brothers. They accused the

:42:55.:43:00.

directors, it is a political problem. Europe, I have been

:43:00.:43:03.

listening about 27 democracies, what kind of growth and economic

:43:03.:43:09.

system. Some were created after wars. We had Yugoslavia, now we

:43:09.:43:13.

have three or four or five different states. We have different

:43:13.:43:17.

economies, we have different interests and we cannot have a

:43:17.:43:26.

Europe that uses the euro as a weapon to colonise poorer countries,

:43:26.:43:30.

or different different systems for country. The problem now for Greece

:43:30.:43:34.

is not only surviving it is designing the future. You cannot

:43:34.:43:40.

expect anybody to have a state with no future. We will leave it there,

:43:40.:43:44.

thank you very much. Now a quick look at tomorrow

:43:44.:43:47.

morning's front pages. The independent leads on the circus

:43:47.:43:57.
:43:57.:43:57.

Apology for the loss of subtitles for 59 seconds

:43:57.:44:56.

That's all from Newsnight tonight. We wanted to leave you with the

:44:56.:44:59.

passing announced today of the Government's Central Office of

:45:00.:45:05.

information, set up in 1946. Tok and trade was what was sometimes

:45:05.:45:15.

referred to disparagingly as' ealth and safety! They produced some.

:45:15.:45:18.

Charley tried to do an extra big jump and he went over the edge and

:45:18.:45:26.

into the water. Charley nearly drowned. It was very

:45:26.:45:32.

lucky for him he caught on the line. Charley says next time we go

:45:32.:45:40.

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