23/06/2011 Newsnight


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


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


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


Our political editor has spent the day annoying important people.


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


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


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


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


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


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


leader got against democracy, Ed Miliband ditches Shadow Cabinet


elections, Alan Johnson will be here to explain why.


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


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


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


the German Chancellor, Angela Merkel, says no formal decisions


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


Euro-sceptic book by a German industrialists, demanding she


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


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


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


like there tonight. I think the mood tonight is they


are making progress. The European leaders have discussed the European


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


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


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


are urging European finance ministers to sort out the second


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


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


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


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


domestic political squabbles, that for any package of austerity


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


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


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


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


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


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


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


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


and maybe leave the euro. With unthinkable consequences for


several other EU countries. And the whole European economy.


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


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


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


fight for a common European currency and the common Europe.


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


decided this week on the Greek situation.


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


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


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


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


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


Mr Cameron claimed to have assurances from Germany that


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


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


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


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


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


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


will not include the European financial mechanism. Earlier this


afternoon, socialist leaders met to discuss solidarity for their Greek


colleagues. Their President admitted this is indeed a decisive


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


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


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


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


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


really appeal to the European Council, please understand that


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


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


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


challenged so seriously as we are now.


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


Foreign Affairs, refused to be drawn.


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


them. It's been reported tonight that the


President of the European Council has said that the European


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


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


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


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


contribute to the bailout. Of course if that stability mechanism


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


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


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


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


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


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


numbers of refugees on southern Europe, and British concerns that


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


be some pretty tough talking tomorrow on that issue after the


equally important, perhaps more important issue of the Greek crisis


tonight. For a German perspective on this,


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


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


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


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


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


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


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


reasonable solution in their parliament. But you have in Greece


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


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


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


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


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


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


might be quite disastrous. A chaotic situation should be avoided


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


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


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


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


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


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


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


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


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


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


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


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


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


very irritating situation, that unlike in Portugal, the opposition


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


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


probably not - is not completely without responsibility for the


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


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


privatisation voluntary, and will banks agree with things that will


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


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


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


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


and the other holders of titles against Greece, because otherwise


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


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


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


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


Can you also confirm whether Chancellor Merkel has come to an


agreement with the British Prime Minister, that Britain will not


contribute to the European bailout fund through the European Stability


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


outcome of the talks between the Prime Minister and the Chancellor


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


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


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


some importance to the British Government, obviously they will


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


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


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


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


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


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


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


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


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


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


Europe needs stronger leadership. What we obviously need is the


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


national decisions are completely sufficient, but have a couple of


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


those areas. Our economics editor, Paul Mason,


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


the European socialist leader is saying that everybody should be


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


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


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


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


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


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


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


remains for the coalition Government, how much leadership


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


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


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


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


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


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


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


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


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


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


This is the last elephant in British circus, his mistreatment


has brought the continuing misuse of wild animals as entertainment to


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


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


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


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


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


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


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


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


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


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


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


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


calls for ban, says he was contacted on three separate


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


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


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


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


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


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


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


This followed some audacious movements from the Government,


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


ban. But the Commons speaker refused to allow a Government


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


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


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


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


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


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


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


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


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


Government has to implement. official Downing Street line is


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


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


opponents say they shunned be riding roughshod over public


opinion. This former party animal is more interested in animal


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


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


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


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


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


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


Minister might have had a particular reason for not want to


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


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


So there you go. I contacted the company concerned


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


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


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


Downing Street are rejecting the accusation that is the Prime


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


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


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


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


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


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


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


Government is serious about listening to parliament, if it is


serious about seeing parliament reassert its authority, on days


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


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


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


programme. A few parliamentary careers might have been damaged and


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


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


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


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


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


the Shadow Cabinet. Ed Miliband believes elections to the Shadow


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


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


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


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


his brother for the Labour leadership than himself. There is


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


when Labour Governments were short interludes in Conservative rule.


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


committed to changing the system to which Labour leaders, including


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


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


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


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


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


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


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


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


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


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


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


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


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


mechanisms in the rule back. - Book.


More on the troubles in the eurozone.


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


Europe are the biggest crisis since World War II.


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


Thatcher's handbagging of various European leaders.


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


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


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


and hopes that make life worth living.


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


national interest is pursued to its ultimate most terrible conclusion.


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


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


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


peacefully, within the wider European family. People were still


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


purpose has shifted subtley, to moderating what would otherwise be


the political and economic power of unified Germany.


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


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


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


war impossible by closer economic integration.


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


core mission of the European Union became the preservation of peace


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


moving in the direction of a European Union which internally


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


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


trying to export stability to other parts of the world.


As the European Community flourished, even Britain decided to


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


over. For the British, the appeal lay in


growing a single economic space, rather than in pushing forwards


ever greater European integration. The President of the Commission


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


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


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


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


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


offered the possibility for many new countries to join. Elites


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


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


because ordinary people will not suddenly think up something like


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


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


elites who favoured the euro, the constitution and ever greater


political integration started to run foul of public opinion. France


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


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


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


most successful exporting economy. And an increasing numbers of


Germans are wondering why they should remain quite so closely tied


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


successful members and so restrict their economic freedom of action.


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


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


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


project arguinging the case for resuming the process of integration.


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


was decribing the European project, there were always two competing


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


the economic shortcomings and mistakes of another country n this


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


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


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


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


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


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


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


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


European President. The grok communist - the Greek communist


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


fellow eurozone countries. You were nodding when that remark


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


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


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


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


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


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


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


better to let them default like Latin American countries did ten


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


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


Government of Greece as well? Definitely, they are completely


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


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


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


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


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


same currency, the same measure, with exporting countries like


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


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


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


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


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


start disengaging from big organisations not helping the new


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


beautiful sun, we still have a beautiful American base where


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


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


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


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


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


representatives in our 27 democracies in the nuep, confronted


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


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


situation through their own decisions. We are trying to get


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


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


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


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


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


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


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


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


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


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


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


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


would have huge negative economic consequences across the rest of


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


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


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


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


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


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


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


leadership in Europe, without pointing to personalities. You


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


the employees of the Lehman Brothers. They accused the


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


listening about 27 democracies, what kind of growth and economic


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


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


economies, we have different interests and we cannot have a


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


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


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


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


thank you very much. Now a quick look at tomorrow


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


Apology for the loss of subtitles for 59 seconds


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


passing announced today of the Government's Central Office of


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


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


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


into the water. Charley nearly drowned. It was very


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


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