18/08/2011 Newsnight

Tonight, markets in freefall and big questions asked about the

global leadership of the economy. But what does this latest bout of

panic mean? Investors are worried about a

double-dip in the real world, and an absence of reality in the world

of politics. We will be discussing if this

represents nothing less than failure of globalisation.

Go now, calls from the US in Europe for Syria's President to finally

stand down, as the UN hears new allegations of slaughter by Al-

Assad's forces. The transition to democracy in Syria has begun, and

it is time for Al-Assad to get out of the way.

These ones got under the bar, but are higher fees going to put

tomorrow's students off the chance of going to university. I think if

you actually look into it, it is actually not a horrible deal, you

still get to borrow the money, you get to borrow it out for longer,

you earn more money before you start paying it back.

20 years ago the coup that spelt the end of the Soviet Union, and

ultimately Gorbachev. We hear the story of that remarkable time, in

his own words. Good evening, it takes very little

to send the markets into freefall these days. So this, a terrible day

in Europe, and in the states, can be nominally traced back to poor

economic data coming out of Philadelphia. More and more the big

questions are being asked, does the growing pessimism mean that both

economies are going into a new recession, and does it mean too

little leadership globaly and too few options left. We will hear from

the economist that believes globalisation is to blame.

First our economics editor, Paul Mason, is with me tonight.

We have had 4.5% knocked the value of shares in the FTSE in London,

and 5% off the American stock market. What they are reacting to

is the recovery is petering out and cooling off, there are clear signs

that politicians in the world don't have much of an idea what to do

with it. The students of the 1930s, and this looks like the double-dip

recession under Roosevelt. The whole 1930s, the shadow of the

1930s are hanging over the situation and the debate that is

are going on. Those who studied the 1930s are

always worried about a double-dip recession. Today a key index of

American production obliged, the Philadelphia Federal Reserve index

had plotted the recovery, the slowing recovery, but nothing

prepared the markets for this 31% drop.

We see a sharp drop in the manufacturing sector in the US, and

the Philadelphia region, a good indicator for future performance in

the US. And we have sharp drops in consumer confidence, a weaker

labour market, we could be on the cusp of recession even as we are

speaking now. There is a second quiet panic going on over Europes

and the banks. Some European states stand in danger of defaulting on

their debts. Those debts are held by banks, and the markets fear

sooner or later, a big bank will have to be rescued. So today the

markets dumped the shares European banks. RBS and Barclays both lost

11% of their value. As for the FTSE, which lost �61 billion in a single

day, 2011 is turning into bad year. The third risk is political,

everything depends on politicians taking big, decisive steps.

The markets want certainty over Europe, what's the deal that will

reshape the eurozone, and in America, which came close to

default two weeks ago, some investors fear there is just a

policy vacuum. We understand that markets do not like uncertainty, we

have all kinds of debt uncertainty in Europe, we have fatal flaw in

the construction of the eurozone, in the United States we have

Republicans and Democrats at loggerhead, they don't want to cut

the fiscal deficit, we know it needs to be cut. So we have this

impasse and in the two biggest economic blocks in the world. And

it is not surprising we have chaos in the financial markets.

nobody believes the chaos will be over soon. You talked about the

policy vacuum, what can you actually do? We have had tax cuts,

spending increase, printing money, we have had zero interest rates,

half bank nationalisations and bailouts. You will often Lear

people say there are no more - hear people say there are no more

bullets in the clip, there are actually plenty of things to do,

but not acceptable to the political class in the last 20 years. You

could break up the eurozone, and do very hard bank nationalisation, you

could have protectionism, you could abolish the minimum wage in various

countries. There are all kinds of things in the policy armoury that

actually countries have considered doing. But what we are increasingly

running up against are the political limitations above all of

democracies to do any of these things.

I'm joined from New York by the leading international economist,

Jeffrey Sach, and the global editor-at-large from Reuters, and

here in the studio by monetary analyst and former measure of the

Treasury panel, Tim Condon. First of all, Paul raises interesting

thoughts about the politically unthinkable, first of all, how

close are we to recession, Morgan Stanley published a report today

saying the second wave was just about here? Clearly the

transatlantic economies are stalled, at best. Surely a double-dip is a

real possibility. We have had dreadful lack of strategy on both

sides of the Atlantic right now. Europe is confused, divided,

European institutions are not working properly, the United States,

we don't have the presidential leadership that's essential for our

political system to operate. And so, while there are policy alternative,

not necessarily the list that we just heard, think there are better

ones, we are not getting sensible policies on either side of the

Atlantic, and the economies are in terrible trouble. So, for example,

when you hear Europe's President, Van Rompuy, saying he has no

expectation of return to recession in Europe, that doesn't reassure

you? Well, it certainly doesn't reassure the markets, and there are

some very serious problems in Europe right now. Obviously the

Greek crisis is on the front burner, but there is lots of risk of

contagion, all the way from Spain, Portugal, Italy, and now into the

banking sector into France. So there is a tremendous amount of

worry. I think this contagion could be avoided, this could be fought,

but it would need real leadership at the European level. Instead,

what we have is a lot of confusion a lot of division, and

nationalistic politics rather than European-wide determination to

protect and preserve the euro. That is what I would have expected see

from European politicians, but we are not seeing it very clearly.

sounds like you don't think anyone really has a clear plan for getting

us out of this mess. Let me ask you, bluntly, do you blame globalisation

for the position we are now in? Globalisation has really shaken our

economies, it has shaken the manufacturing sector in Europe and

in the United States. We could respond to it, and woe need to spon

to it, I believe that - and we need to respond to it. I believe long-

term, properly planned public investments in infrastructure and

upgrading skills in a new energy system, which both sides of the

Atlantic, and indeed the whole world need, this is something that

should have been done, instead what we had was short-term stimulus to

try to keep a consumption bubble alive. That petered out. And now,

what we have is a reversion to kind of plain vanilla austerity measures

which also don't give prospects of economic growth. So there are ways

to do things that we need to do, we need public investments desperately

to modernise our economies to upgrade skills, to train workers to

be able to compete in a highly competitive global economy. In

other words, globalisation hasn't failed so much as it has challenged

the transatlantic economies, desperately, and we have not

responded it. A lot of the world is growing fast, it is the high income

economies that did not react properly to globalisation at this

point. They want consumption-led growth, but that won't work. In a

sense it is too late to challenge globalisation now, the kind of

things you are putting forward sound very reasonable, but they are

politically, virtually impossible at this point in the cycle? I don't

think they are politically impossible, it is just that our

politicians were looking for short- term gimmicks, short-term gimmicks

all along. We had a consumption bubble which carried us through a

part of globalisation, but that consumption bubble collapsed in

2008, that was the occasion to get more serious. Instead we had more

attempts to revive a consumption bubble, that more or less carried

us through 2010, that finished as well. We have not seen either on

the US or European side, a truly sensible response. Globalisation is

not only shaking the competitiveness of a core part of

the transatlantic economy, but it has also led to massive income

inequalties in Europe and the United States, and the rich have

basically walked off with the prize, leaving a large part of the

population and the labour force, both in Europe and the United

States, effectively either without jobs or without a means of the kind

of middle-class suss napbs that they came to expect. And so, -

sustanenca that they came to expect. Politically they haven't looked

long-term. We still have to do it, there are no short-term gimmicks

now, we have to go through a serious long-term approach. Let me

put through some of those ideas, it would be interesting to hear your

response Tim Condona very strong phrase, the rich have basically

walked off with the goods, and the poor have been forgotten.

couldn't disagree more strongly, the effect of globalisation has

been to make poor people in China, India and the developing world,

much richer, that is a wonderful thing. I don't agrow that the prime

cause of inequality, and inequality has increased in the rich countries,

but the prime cause of things like that is bad education for the less

well off, and problems in our education system, the welfare state

and so on. I don't think they are caused by globalisation,

globalisation has been very good for our living standards and the

living standards of those, particularly the poor in the third

world. But you can't actually raise taxes of corporates without

corporates saying we have to go elsewhere. The same with any tax

you warranted to impose on individual, you get - you wanted to

impose on individuals, you get people going and doing business

elsewhere, that is where anyone can always escape it? The rich have

been escaping taxes for centuries. It doesn't mean it is OK? Let's be

clear we are talking about what is happening in the last 20 years, in

that period there has been intense globalisation, if you wish, and

there has been a huge increase of living standards of formally very -

formerly very poor people in places like India and China, and that is a

very good thing. How much do you think this is down to the economy,

per se, and how much is down to political system, which,

essentially, have left people nowhere to show leadership?

Actually, I think it is thank it is quite trendy at the moment to talk

about political dysfunction, and to talk about some how like treating

politicians like kids in a playground, and if only they could

all get along everything would be OK. I think actually the problem is

much more profound than that, if you take the United States, there

is a very serious, very consequential ideolgical divide.

That ideolgical divide is reflected in Washington and it exists in the

country. The very sad consequences right now, I think it is paralysing

Washington when it comes to responding to this crisis. We saw a

vivid example of this week, Rick Perry, the governor of Texas, an

important politician, one of the leading Republican candidates for

the presidential nomination, talked about the chairman of the Fed, as

someone who is tease sonness, and if he goes to - trees sonness, and

if he goes to Texas he will be beaten up. That speaks of a huge

lack of faith in the Government by an important part of the US

political system. I don't think this is just about dysfunction, not

getting along, it is about a very, very deep division within the

country, which makes it so hard to deal with this extremely difficult

economic situation. What is the answer to that? I think there is a

little bit of confusion in what I'm saying and what has been commented

on. Globalisation, of course, has raised incomes in poor countries, I

was talking about how it has shaken our economies in Europe and the

United States. And what it has meant for those with low skills in

the US and Europe. It has created a terrible problem. What it has also

done is given the increase income and wealth at the very top of the

political spectrum. Our problem in the United States is not so much

political polarisation, but the fact that both political parties

cater to those who finance their campaigns. We get tax cuts at the

top, slashs in social spending at the bottom, and so the poor are

paying twice. They are paying by how globalisation is rearranging

the world economy and by how it is rearranging the politics. But both

the politics and economics are reaching a dramatic crisis point in

Europe and the United States, unless we get a lot more serious to

hold our societies together. That means Democrats and Republicans, it

is not one or the other, but both realising that the rich have become

fatastically rich and need to be taxed more, so they can help the

rest of society through this period. Unless we do this we are going to

enter a continuing era of greater instability.

It is interesting when you say we have to not treat politicians like

kids in the playground. The point is, nobody can be decisive this

time round, we have seen the wrangling in Congress, we have seen

the complete chaos in Europe, that is the problem, when democracies

can't actually show anything straight in terms of the leadership

now? Actually I don't think it is lack of decisiveness, I think it is

an honest disagreement, I do think in the United States the real

tragedy at the moment is that the President really is in the centre

of the ring, and he turns out to be the political actor who is the

least willing to express a clear agenda, and the least willing to

fight for it. That is certainly a big part of the reason why we

aren't seeing something clear and strong coming out of Washington. I

also think that Jeff is absolutely right to point to increased income

inequality in the west. In the United States, in much of western

Europe, as a real source of the problem, and what is happening, I

think political elites tend to hand out with business elites and it has

taken them a while to really realise the severity of how the

middle-class is being hit. That is the crux of it, isn't it, the

politicians listen to the people they think are voting for them,

sometimes this elite? It is a question of inequality, one of the

problems here is banking and the financial sector and how it fits

into capitalist economies. In the last few years the banking sector

has been extremely well paid, and people envy it a and so on, in

America there have been at least three episode where is they have

destroyed their banking system. Through more or less regulation,

that is where we are going now? think that is a big subject. In the

1930s the American banking system collapsed and had a big recession,

we must stop that this time. The big problem, in my view, in the

last few years Governments have been too tough on the banks, they

pay be overpaid, they have stopped the banks growing, they very slow

growth of money has been the basic cause of the recession.

After weeks of speculation, today President Obama, in words both

stark and unambiguous, called for Syria's President to go. With his

call a series of unprecedented and immediate actions, including a

freeze on all Syrian assets in the US. The statement was co-ordinated

with other European leaders, Merkel, Sarkozy and David Cameron here,

tonight the UN said it was investigating allegations of a

shoot-to-kill policy in Syria, and the deaths of 26 blindfolds

protestors in a stadium. In a moment we will discuss whether

tough words or economic sanctions can achieve anything without

military might. It has taken five months of

bloodshed, around 2,000 civilian lives lost. But the west has now

definitively turned its back on Bashar al-Assad, a co-ordinated

chorus of condemnation. This morning President Obama called

on Al-Assad to step aside. And announced the strongest set of

sanctions to date, targeting the Syrian Government. These sanctions

include the energy sector, to increase pressure on the regime.

The transition to democracy in Syria has begun, and it is time for

Al-Assad to get out of the way. Bashar al-Assad came to power 12

years ago on a wave of hope for reform. He still enjoys falling

support from party loyalists, but outside Syria, even Arab countries

are losing patience, he has few friends left, other than Iran. The

trouble for Bashar al-Assad first began when a group of teenagers in

the town of Deraa were arrested for scrawling anti-regime graffiti,

there were protests and the Syrian uprising began. It was met with

brutality, and UN investigators say that crimes against humanity may be

committed, and Syria should be referred to the International

Criminal Court. In one incident 26 blindfolded men

are said to have been shot dead in a football stadium. Syrian humam

rights activists say 30,000 people have been arrested, with 3,000

missing and more than 100 children among the dead. There was a policy,

they say, of shoot-to-kill. lady in dumb marks on the outskirts

of Damascus, she was seven months pregnant, a baby in her abdomen, in

her tummy, she was just pulling ahead, out - putting her head, out

of the door to grab a bowl of rice, they shoot her in her head.

despite mounting international concern, there is no prospect of

western military intervention. This is going to be battle of

political attrition. It is going to be one which can't easily be won,

but there is no point in simply going on and acting as if you could

ignore the level of violence and repression. I mean, this is the

first desert country in the world to use its own Navy to fire on its

own people. And the stakes are hi, you only have to look at the map to

see what matters in Syria matters what happens in the Middle East. It

shares wars with Lebanon and Iraq, and then there is Israel, which

occupied the Golan Heights in 1967. Although Israel and Syria have

fought three wars, there has been no direct confrontation for decades.

With the whole of the Middle East in torment, there is fears about

what the end of the Al-Assad regime might unleash. Unlike in Egypt and

Libya, there is no umbrella body for the opposition, the opposition

are seriously divided between exiles, those inside Syria, secular

opposition, Islamists and there is no agreement on any kind of

successor for Al-Assad. This isn't a turning point. The

turning point will come if and when we see major protests in those

parts of Syria that are as yet deciding it is not worth protesting,

there are big population sent erts, capital cities, and the places in

the north, so we see the military stretched so it has to choose. This

is a reaction of considerable frustration from the US and the

west. With Syrians burying ever-growing

numbers of dead, the US, Britain, France, Germany and the EU are now

speaking with one voice, that President Assad must go. They seem

to have all laided that he is more of a danger in power than -

calculated that he's more of a danger in power than out and they

want to tighten the screws on his regime.

Joining me the former US Secretary of State for Public affairs,

PJCrowley and a Syrian activist. What took them so long do you

think? I think part of it is a recognition, say by contrast to

Libya, that they are two different countries, Libya on the fringe of

the region, Gaddafi has no friends in the region, Syria is at the

heart of the region, as your report said there are potential ripple

effects that effect profound countries in the region. It hats

taken longer to make - it has taken longer to ensure there is support

in the region for the next step. There is a sobering understanding

of how difficult this will be. This is where Libya has been an effect,

five months ago we saw a military intervention, proving more

difficult than perhaps was initially anticipated. This has

contributed to the cautious approach to Syria. They have

specifically ruled out military action now, how much do you think

President Assad will listen to America? Not too much. Because he,

up until this point, very sure that the American administration

objective was to change the behaviour of the Syrian regime, not

change the regime. So although the regime tried this morning to pre-

emptively influence the statement, or at lost the tone of the

statement - at least the tone of the statement, by telling Ban Ki-

Moon that the military operation had stopped, this didn't happen,

because the Americans realised there won't be any reconciliation

between the people of Syria and the regime. The people of Syria have

reached the point of no return with the regime. There is no point of

reconciliation with them, this is the way they see it, Al-Assad has

to go. Al-Assad, not only as a figurehead for the regime but as a

family. You talk about getting the region on board, can Russia or

China ever be brought on board, is it the economic sanction that is

will make a difference. Or is it stopping the selling of

arms to countries like that from Syria? It is all of the above,

economically it will be important for countries like China, India,

and other European countries, to sever existing economic

transactions and relationships. Politically it will be important to

get the Security Council on board, again, a much more of a struggle in

the context of Syria than it was in the context of Libya. This is where

the United Nations provides a very interesting opportunity. Also today

you had the development where the UN panel has at least suggested the

possibility of crimes against humanity. And this could be a lever,

a long-term lever, that can be used to apply the kind of political

pressure on Syria that is necessary. One other point, I agree that it is

not Assad that has to hear this, but those around him, that have to

make their own calculation over time about their own survival. It

is that kind of pressure from inside Syria that is ultimately

going to be decisive. That whole thought of the

International Criminal Court, do you think that makes it more

difficult for an exit for President Assad now, will this have an

effect? Now he's obviously cornered, he realises he will never rule

Syria the way he did prior to the March uprising. This regime is

willing to do anything, and go to extreme lengths to control the

situation back home. So in that he did not count on this that the

Americans declared recently. He thought that he could actually work

with them to create a mechanism whereby Syria can actually transfer

to democracy under his leadership. It is interesting, isn't it, that

idea of whether you can work with a regime like Syria, I guess the

balance for western leaders is always the choosing of the ideaism,

gok circumstance versus the pragmatisim of stability -

democracy, versus the pragmatisim of stability, and he has said he's

keeping control and western leaders have believed that. This is the

hope for Assad for 20 years, after he replaced his father, that he

would be a reformer, he has always had that potential, he has never

followed through either because he is afraid to do it or because those

around him would not allow him. That has been a slow recognition.

If you look at the shift in the administration's position over time.

First it was, lead transition or get out of the way, then you have

lost legitimacy. Fine I think there was a situation they could no

longer ignore, that it is clear that Assad is not going to change,

the nature of the regime or his behaviour.

The gap year stories circulating the fresher's week bar may be less

compelling this autumn, or sound similar. Many have ditched the

prospect of a year off to seize a university place while they can

afford it. This will be the last intake before the tuition rise next

year, leaving students with a debt that could mean �30,000. It will

change our society's approach to university forever. We ask does the

evidence bear that out. There is always a bit of luck in

pass ang exam, for these students their biggest slice of good fortune

means going to university before tuition fees in England treble next

year. What impact will the impending change have, and how

lasting will it be. Many students this year will forego a gap year

before starting university. I have been waiting for this too long,

even if fees go up, I wouldn't want a gap year. If you look into it, it

is not actually not a horrible dealment you still get to borrow

the money, and out for longer, you have to earn more money before

paying it back. I'm not phased by it. Even if I did have to take gap

year, it wouldn't change my decision. The teachers here in an

academy in Hackney, East London, encourage students to go to

university. The head thinks next year's rise in fees will only make

prospective students more discerning. Four years in

university is a good investment. It is really up to the universities to

sell their degrees, and to demonstrate to the students that

the universities are of high quality and the programmes of study

are of high quality. And there is prosession, they need to show our

students a track record of this, prosession from the course to

employment. Some fear it is students from poorer backgrounds

who will be put off. Regardless of the repayment mechanisms of how you

pay back tuition fee, if you get a letter through your door every year

that case you have an amount of debt close to a small mortgage,

that will affect choice and psychology. Perhaps those with a

background without those at university, and without the

guidance of rational choice, they will be massively put off by the

huge debt hanging over them. No amount of explanation will get over

that psychology and fear of debt. Maybe that will happen this time.

But in the past, hikes in fees haven't had a lasting impact on the

size or social mix of the student population. In 1998, upfront fees

of �1,200 a year were brought in, replaced by deferred fees of �3,000.

This is graph showing the proportion of 18, 19-year-olds

going to university during that period of time. In both change

years we see the same rise in entry the year before the changes come in.

There is then fall in the year the change actually happens, but looks

what happens after that. Things get back to normal and carry on rising

in the subsequent years. That is overall participation, what about

the socioeconomic make-up of the entrants. The Institute for Fiscal

Studies studied the 2006 tuition That is close to zero and

statistically insignificant. At the university of East London, they

don't believe the new fee regime will deter students this time

either, if it is properly explained. After rather shaky start, which I

can understand, the Government, working with universities and the

media, is now doing a much better job of getting the message across.

We are committed to working with the Government in terms of getting

those messages out to some of the more difficult to reach

constituencies. At the University of East London we are doubling our

investment in our message to make sure that higher education is for

the many not just the few. There is also evidence from

elsewhere in the world, Ireland abolished tuition fees in 196. If

tuition fees discourage poorer students we might see them

encouraged by the abolition of the In fact, the evidence shows that it

is actually exam results that are the biggest factor in getting

students from poorer backgrounds into university. That is the real

challenge for policy makers, to improve their life chances, they

need to be making a difference long before students are even thinking

about university. On August 19th, 1991 the world woke

up to hear that President Gorbachev was supposedly ill and an emergency

committee had taken over power in the Soviet Union. It was an

abortive attempt by hardliners to turn the clock back. But the impact

of the failed society coup was dramatic. By the end of the year

the Soviet Union had disappeared, and Gorbachev, the last Soviet

leader, forced into retirement. 20 years on we have had exclusive

access to Mikhail Gorbachev, to chart the inside story of the coup,

and its long-term consequences. The Kremlin leader, who started out

the master of compromise and ended up its victim.

1991, a momentous year, when the future of Russia and the world were

at stake. He listened carefully and then said,

please, please. Explain to your President, this country is on the

brink of civil war. TRANSLATION: was a struggle for life and death.

20 years on, the inside story of Mikhail Gorbachev's downfall, and

the demolition of the Soviet empire. You saw a coup in the Soviet Union

that may have changed the whole face of it and one saw it swept

away. That enormous white building across

the Moscow River, is exactly what it looks like, the imposing

headquarters of someone very high up and very important, Vladimir

Putin, the most powerful politician in Russia. But 20 years ago it was

something very different, it was the centre of the resistance to the

attempted coup that tried to topple Mikhail Gorbachev and reverse his

reforms. By 1991, the public mood was becoming angry. For ordinary

people, economic upheaval was beginning to make life unbearable.

The Soviet President, Mikhail Gorbachev, took the brunt of

people's rage. It was six years of his reforms that they considered

were to blame. At times he sought solace in political jokes.

Gorbachev told me the following story, he said there was a food

shortage in Moscow, and people were queuing for bread, and they had

been queuing a long time and they were getting very irritated. And

one man turned in the queue and said to his neighbour, I'm fed up

with this, I blame Gorbachev, he's going to kill Gorbachev and off he

went. He came back two days later, the queue had moved forward a

little. Well they said, had he killed Gorbachev, no he replied,

the queue to kill Gorbachev was just too long!

At the annual May Day parade, the crowd on Moscow's Red Square jeered

at Gorbachev. But behind the scenes, there was a bigger threat. Members

of his own Government, next to him on the podium, were privately

scheming against him. TRANSLATION: We saw in Gorbachev someone who was

incapable of governing, we were quite convinced about this.

Americans heard rumour that is a coup was being planned to oust

Gorbachev. It was Yeleusizov's idea to warn Gorbachev, I told him it

was more - Yeltsin's idea to warn Gorbachev, he told him a coup was

being organised against him and could happen at any time. He

laughed and said something about naive Americans. By early August,

1991, Gorbachev decided to join forces with his arch rival, Boris

Yeltsin. They struck a deal in a secret meeting. TRANSLATION:

agreed that Boris Yeltsin would stay in Russia as he was an elected

President, and Gorbachev would be union President. And we would get

rid of all those putting spokes in the wheels, and then we named them,

the people we were talking about. What Gorbachev didn't realise was

that the very hardliners he was planning to get rid of, had

secretly used the KGB to record the conversation. His deal with Boris

Yeltsin back fired, his enemies, including his own vice-president,

defence and KGB chiefs, decided to act at once, stage a coup against

The coup plotters sent a delegation to confront Gorbachev at his

holiday Villa by the Black Sea, in a tense meeting they presented him

with an ultimatum, either to agree to a state of emergency, or hand

over power to them. TRANSLATION: even swore at them, I said to go

and convene a Congress, and we will see whose plan will get more

support, their's or mine. In the end they left empty handed, they

flew back. I think they got drunk on the way, and reported back that

Gorbachev had refused. Refused what? Refused to sign the order

delegating my powers to the vice- president, due to the poor state of

my health. What lies. In Moscow tanks rolled into the city centre.

State television and radio announced that Gorbachev was ill

and an emergency committee was now in charge. It looked as though the

old terrifying Soviet dictatorship was back. As the drama unfolded in

Moscow, Gorbachev realised the phones were disconnected, and he

and his family were under house arrest. He and his wife feared the

worst. TRANSLATION: They surrounded us with the cars down by the

seashore and everywhere. We entrance they parked cars so nobody

could drive past, many people were trying to get in, and they wouldn't

let anyone through. TRANSLATION: Several of our

bodyguard deserted us, we were not sure we could trust those who

stayed behind. I didn't know whether they were protecting us or

were under orders to guard us, they could have turned their beguns on

us at any time, we were - guns on us at any time, they were watching

us from every staircase. In the capital, Boris Yeltsin

denounced the coup as illegal, and urged people to join him at the

White House to defend Russia's fledgling democracy.

Thousands gathered, people who realised after six years of

Gorbachev's reforms they had lost their fear. It was this new found

de defiance that dealt a cruel blow to the coup leaders, parts of the

army refused to fire on the people. Within three days it was over,

Gorbachev and his family returned to Moscow, but everything had

changed. The coup leaders had lost, but so too, it turned out had

Gorbachev. A showdown in the Russian

parliament made the power shift clear. At first, Gorbachev assumed

as Soviet President he was in charge. Then Yeltsin the Russian

President, interrupted him with the bombshell news that he was

outlawing the communist party, Gorbachev no longer had the power

to overrule him. Yet Gorbachev still hoped the old structure of

the Soviet Union could be preserved with himself at the helm. Not all

leaders in Soviet Republics agreed. TRANSLATION: I believe it was

Yeltsin that brought up the idea in conversation, how about meeting

without Gorbachev, and we agreed to meet in Belarus.

During an informal gathering, in a remote hunting lodge, deep in the

forest, the three Presidents, from Russia, Ukraine and Belarus, dealt

a final blow to Gorbachev, and the entire Soviet Union. TRANSLATION:

Boris Yeltsin said would you agree to the Soviet Union ending its

existence, I said OK and the others said OK too.

It only really dawned on me afterwards when the car came to

take me home, what we had done. was decided that Belarus President,

Stanislau Shushkevich, should break the news to Gorbachev, while Boris

Yeltsin announced it to the world. TRANSLATION: When they finally put

me through to Gorbachev, Boris Yeltsin was already on the phone to

Bush. I told him, and he said can you imagine what the outside world

will think of this, and in other words, you idiots for getting

involved in it. I said actually Boris Yeltsin is speaking to

President Bush right now. On the other end of the phone there

was a silence, and then he hung up. Gorbachev had no choice but to

resign. After six yeerts in power, he went on tell - years in power,

he went on television for the last time as President of the Soviet

Union. The red flag came down. Replaced by the Russian tricolour.

Boris Yeltsin, President of Russia was in charge now. He and Gorbachev

never spoke again. Abroad Gorbachev is still praised for ending the

Cold War. In Berlin they greet him as a hero for his part in reuniting

Germany. The communist old guard, from East

Germany and the Soviet Union, live on only on a mural on the Berlin

Wall. Nowadays it is a current Kremlin ruler whom Gorbachev cet

sizes, he likens - criticise, he likens Putin's hold on the country

to Brezhnev cease. TRANSLATION: Russia should be a country of

stability, but stability kills stagnation.

I think they have blown it with democracy. The electoral system we

had was nothing remarkable, but they have simply castrated it. I

apologise for my choice of words, but they really have circumcised it.

20 years on, the Soviet leader who changed the world had lost an

empire, but insists he still has a role. Sending the alarm about

Russia's fragile democracy before it's too late.

You can see more of that interview with Mikhail Gorbachev in two films

this weekend on the BBC News Channel. We will bring you the

front pages of the papers in one second. A quick update on the story

we ran last night, about Richmond council in London putting a young

defendant in their care in a Premier Inn, we put on the

programme that the defendant was on remand at the time. Richmond

council say he was not on remand but put in the hotel after a court

hearing because the council Some people Geithnering in with A-

star grades because - some people not getting in with A-star grade

because of places so tight. That's Hello there, summer makes a brief

return on Friday. Most of us having a fine day. It will start off a bit

chilly a few showers in north-east Scotland. Grey day in Northern

Ireland with outbreaks of rain. Overall expects spells of sunshine,

hazy later on. Temperatures up to 19-20. A dryer brighter day across

southern counties of England and East Anglia. Dorset affected by the

flooding today. Sunny spells across the far South-West. Cloud

increasing in Wales, sunshine turning hazy. Overall it will be

dry and bright. It will be cloudy in Northern Ireland. Not much

sunshine on offer here, there will, at times, be outbreaks of rain,

particularly in the west. Some of that rain may work its way into the

far west of Scotland. Most of Scotland looking dry and bright,

the morning showers tending to fizzle out by the afternoon. Some

uncertainty by the weekend, parts of northern England and the

Midlands will see outbreaks of rain. Showers across the Highlands, some

of the rain across the Midlands may affect parts of Wales and the south

west. At the moment it looks like south-east England will be dry. It