18/08/2011 Newsnight


18/08/2011

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


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Tonight, markets in freefall and big questions asked about the

:00:10.:00:14.

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

:00:14.:00:16.

panic mean? Investors are worried about a

:00:16.:00:20.

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

:00:20.:00:23.

of politics. We will be discussing if this

:00:23.:00:27.

represents nothing less than failure of globalisation.

:00:27.:00:32.

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

:00:32.:00:37.

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

:00:37.:00:41.

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

:00:41.:00:45.

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

:00:46.:00:50.

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

:00:50.:00:53.

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

:00:53.:00:58.

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

:00:58.:01:01.

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

:01:01.:01:08.

you earn more money before you start paying it back.

:01:08.:01:13.

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

:01:13.:01:16.

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

:01:16.:01:25.

his own words. Good evening, it takes very little

:01:25.:01:29.

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

:01:29.:01:35.

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

:01:35.:01:38.

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

:01:38.:01:44.

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

:01:44.:01:49.

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

:01:49.:01:53.

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

:01:53.:01:55.

the economist that believes globalisation is to blame.

:01:55.:01:59.

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

:01:59.:02:07.

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

:02:07.:02:10.

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

:02:10.:02:14.

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

:02:14.:02:19.

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

:02:19.:02:24.

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

:02:24.:02:28.

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

:02:29.:02:32.

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

:02:32.:02:40.

are going on. Those who studied the 1930s are

:02:40.:02:49.

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

:02:49.:02:52.

American production obliged, the Philadelphia Federal Reserve index

:02:52.:02:55.

had plotted the recovery, the slowing recovery, but nothing

:02:55.:02:59.

prepared the markets for this 31% drop.

:02:59.:03:04.

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

:03:04.:03:08.

the Philadelphia region, a good indicator for future performance in

:03:08.:03:14.

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

:03:14.:03:18.

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

:03:18.:03:21.

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

:03:21.:03:25.

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

:03:25.:03:29.

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

:03:29.:03:36.

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

:03:36.:03:43.

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

:03:43.:03:50.

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

:03:50.:03:55.

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

:03:55.:04:00.

everything depends on politicians taking big, decisive steps.

:04:01.:04:04.

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

:04:04.:04:08.

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

:04:08.:04:13.

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

:04:13.:04:16.

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

:04:16.:04:20.

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

:04:20.:04:23.

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

:04:23.:04:26.

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

:04:26.:04:30.

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

:04:30.:04:34.

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

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

:04:38.:04:45.

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

:04:45.:04:50.

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

:04:50.:04:54.

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

:04:54.:04:58.

half bank nationalisations and bailouts. You will often Lear

:04:58.:05:04.

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

:05:04.:05:07.

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

:05:07.:05:11.

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

:05:11.:05:15.

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

:05:15.:05:19.

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

:05:19.:05:23.

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

:05:23.:05:26.

actually countries have considered doing. But what we are increasingly

:05:26.:05:30.

running up against are the political limitations above all of

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democracies to do any of these things.

:05:34.:05:39.

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

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

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

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

:05:54.:05:58.

thoughts about the politically unthinkable, first of all, how

:05:58.:06:02.

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

:06:02.:06:10.

saying the second wave was just about here? Clearly the

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

:06:17.:06:20.

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

:06:20.:06:25.

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

:06:25.:06:29.

European institutions are not working properly, the United States,

:06:29.:06:34.

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

:06:34.:06:39.

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

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

:06:43.:06:46.

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

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

:06:50.:06:55.

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

:06:55.:07:00.

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

:07:00.:07:04.

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

:07:04.:07:09.

some very serious problems in Europe right now. Obviously the

:07:09.:07:14.

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

:07:14.:07:20.

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

:07:20.:07:24.

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

:07:24.:07:29.

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

:07:29.:07:33.

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

:07:33.:07:39.

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

:07:39.:07:45.

nationalistic politics rather than European-wide determination to

:07:45.:07:48.

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

:07:48.:07:52.

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

:07:52.:07:55.

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

:07:55.:08:01.

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

:08:01.:08:07.

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

:08:07.:08:11.

economies, it has shaken the manufacturing sector in Europe and

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

:08:16.:08:20.

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

:08:20.:08:25.

term, properly planned public investments in infrastructure and

:08:25.:08:28.

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

:08:28.:08:32.

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

:08:32.:08:36.

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

:08:36.:08:41.

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

:08:41.:08:48.

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

:08:48.:08:53.

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

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

:08:58.:09:01.

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

:09:01.:09:06.

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

:09:06.:09:13.

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

:09:13.:09:17.

the transatlantic economies, desperately, and we have not

:09:17.:09:22.

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

:09:22.:09:26.

economies that did not react properly to globalisation at this

:09:26.:09:30.

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

:09:30.:09:33.

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

:09:33.:09:37.

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

:09:37.:09:42.

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

:09:42.:09:45.

think they are politically impossible, it is just that our

:09:45.:09:50.

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

:09:50.:09:54.

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

:09:54.:09:59.

part of globalisation, but that consumption bubble collapsed in

:09:59.:10:04.

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

:10:04.:10:08.

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

:10:08.:10:15.

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

:10:15.:10:20.

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

:10:20.:10:24.

not only shaking the competitiveness of a core part of

:10:24.:10:29.

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

:10:30.:10:32.

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

:10:32.:10:36.

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

:10:36.:10:39.

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

:10:39.:10:46.

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

:10:46.:10:55.

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

:10:55.:10:59.

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

:10:59.:11:04.

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

:11:04.:11:10.

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

:11:10.:11:13.

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

:11:13.:11:18.

response Tim Condona very strong phrase, the rich have basically

:11:18.:11:25.

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

:11:25.:11:29.

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

:11:29.:11:33.

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

:11:33.:11:37.

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

:11:37.:11:41.

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

:11:41.:11:46.

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

:11:46.:11:50.

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

:11:50.:11:53.

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

:11:53.:11:56.

globalisation has been very good for our living standards and the

:11:56.:11:59.

living standards of those, particularly the poor in the third

:11:59.:12:03.

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

:12:03.:12:06.

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

:12:06.:12:10.

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

:12:10.:12:13.

impose on individuals, you get people going and doing business

:12:13.:12:19.

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

:12:19.:12:23.

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

:12:23.:12:26.

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

:12:26.:12:29.

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

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

:12:35.:12:39.

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

:12:39.:12:42.

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

:12:42.:12:46.

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

:12:46.:12:49.

essentially, have left people nowhere to show leadership?

:12:49.:12:53.

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

:12:53.:12:59.

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

:12:59.:13:02.

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

:13:02.:13:06.

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

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

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is a very serious, very consequential ideolgical divide.

:13:15.:13:19.

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

:13:19.:13:23.

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

:13:23.:13:29.

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

:13:29.:13:35.

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

:13:35.:13:39.

important politician, one of the leading Republican candidates for

:13:39.:13:44.

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

:13:44.:13:51.

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

:13:51.:13:57.

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

:13:57.:14:02.

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

:14:02.:14:05.

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

:14:05.:14:09.

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

:14:09.:14:12.

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

:14:12.:14:20.

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

:14:20.:14:25.

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

:14:25.:14:29.

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

:14:29.:14:33.

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

:14:33.:14:38.

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

:14:38.:14:45.

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

:14:45.:14:49.

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

:14:49.:14:53.

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

:14:53.:14:57.

political polarisation, but the fact that both political parties

:14:57.:15:01.

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

:15:01.:15:07.

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

:15:07.:15:11.

paying twice. They are paying by how globalisation is rearranging

:15:11.:15:15.

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

:15:15.:15:20.

the politics and economics are reaching a dramatic crisis point in

:15:20.:15:25.

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

:15:25.:15:30.

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

:15:30.:15:35.

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

:15:35.:15:38.

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

:15:38.:15:43.

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

:15:43.:15:47.

enter a continuing era of greater instability.

:15:47.:15:51.

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

:15:51.:15:55.

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

:15:55.:15:58.

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

:15:58.:16:02.

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

:16:03.:16:05.

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

:16:05.:16:09.

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

:16:09.:16:14.

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

:16:14.:16:19.

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

:16:19.:16:24.

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

:16:24.:16:28.

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

:16:28.:16:32.

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

:16:32.:16:35.

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

:16:35.:16:41.

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

:16:41.:16:44.

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

:16:44.:16:49.

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

:16:49.:16:53.

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

:16:53.:16:57.

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

:16:57.:17:00.

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

:17:00.:17:03.

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

:17:03.:17:07.

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

:17:07.:17:11.

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

:17:11.:17:14.

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

:17:14.:17:20.

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

:17:20.:17:23.

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

:17:23.:17:26.

destroyed their banking system. Through more or less regulation,

:17:26.:17:30.

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

:17:31.:17:34.

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

:17:34.:17:38.

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

:17:39.:17:42.

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

:17:42.:17:46.

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

:17:46.:17:51.

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

:17:51.:17:54.

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

:17:55.:17:58.

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

:17:58.:18:02.

call a series of unprecedented and immediate actions, including a

:18:02.:18:06.

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

:18:06.:18:11.

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

:18:11.:18:14.

tonight the UN said it was investigating allegations of a

:18:14.:18:18.

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

:18:18.:18:21.

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

:18:21.:18:24.

tough words or economic sanctions can achieve anything without

:18:24.:18:34.

military might. It has taken five months of

:18:34.:18:40.

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

:18:40.:18:43.

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

:18:43.:18:53.
:18:53.:18:54.

chorus of condemnation. This morning President Obama called

:18:54.:18:58.

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

:18:58.:19:03.

sanctions to date, targeting the Syrian Government. These sanctions

:19:03.:19:08.

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

:19:08.:19:12.

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

:19:12.:19:16.

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

:19:16.:19:21.

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

:19:21.:19:24.

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

:19:25.:19:30.

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

:19:30.:19:34.

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

:19:34.:19:39.

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

:19:39.:19:44.

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

:19:44.:19:48.

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

:19:48.:19:51.

committed, and Syria should be referred to the International

:19:51.:19:57.

Criminal Court. In one incident 26 blindfolded men

:19:57.:20:03.

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

:20:03.:20:07.

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

:20:07.:20:11.

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

:20:11.:20:17.

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

:20:17.:20:24.

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

:20:24.:20:28.

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

:20:28.:20:35.

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

:20:35.:20:39.

despite mounting international concern, there is no prospect of

:20:39.:20:45.

western military intervention. This is going to be battle of

:20:45.:20:50.

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

:20:50.:20:55.

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

:20:55.:21:03.

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

:21:03.:21:08.

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

:21:08.:21:13.

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

:21:13.:21:19.

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

:21:19.:21:23.

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

:21:23.:21:27.

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

:21:27.:21:33.

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

:21:33.:21:40.

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

:21:40.:21:45.

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

:21:45.:21:50.

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

:21:50.:21:55.

are seriously divided between exiles, those inside Syria, secular

:21:55.:21:59.

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

:21:59.:22:08.

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

:22:08.:22:12.

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

:22:12.:22:19.

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

:22:19.:22:23.

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

:22:23.:22:30.

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

:22:30.:22:33.

is a reaction of considerable frustration from the US and the

:22:33.:22:38.

west. With Syrians burying ever-growing

:22:38.:22:42.

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

:22:42.:22:45.

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

:22:45.:22:51.

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

:22:51.:22:55.

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

:22:55.:22:59.

want to tighten the screws on his regime.

:22:59.:23:05.

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

:23:05.:23:10.

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

:23:10.:23:15.

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

:23:15.:23:18.

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

:23:18.:23:22.

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

:23:22.:23:27.

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

:23:27.:23:32.

effects that effect profound countries in the region. It hats

:23:32.:23:37.

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

:23:37.:23:41.

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

:23:41.:23:46.

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

:23:46.:23:50.

five months ago we saw a military intervention, proving more

:23:50.:23:54.

difficult than perhaps was initially anticipated. This has

:23:54.:23:57.

contributed to the cautious approach to Syria. They have

:23:57.:24:00.

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

:24:00.:24:07.

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

:24:07.:24:12.

up until this point, very sure that the American administration

:24:12.:24:16.

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

:24:16.:24:23.

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

:24:23.:24:31.

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

:24:31.:24:36.

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

:24:36.:24:39.

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

:24:39.:24:43.

because the Americans realised there won't be any reconciliation

:24:43.:24:48.

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

:24:48.:24:53.

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

:24:53.:24:56.

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

:24:56.:25:02.

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

:25:02.:25:09.

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

:25:09.:25:12.

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

:25:12.:25:18.

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

:25:18.:25:22.

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

:25:22.:25:25.

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

:25:25.:25:30.

and other European countries, to sever existing economic

:25:31.:25:35.

transactions and relationships. Politically it will be important to

:25:35.:25:40.

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

:25:40.:25:45.

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

:25:45.:25:48.

the United Nations provides a very interesting opportunity. Also today

:25:48.:25:54.

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

:25:54.:25:57.

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

:25:57.:26:02.

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

:26:02.:26:06.

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

:26:06.:26:11.

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

:26:11.:26:14.

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

:26:14.:26:18.

is that kind of pressure from inside Syria that is ultimately

:26:18.:26:23.

going to be decisive. That whole thought of the

:26:23.:26:26.

International Criminal Court, do you think that makes it more

:26:26.:26:30.

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

:26:30.:26:35.

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

:26:35.:26:42.

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

:26:42.:26:49.

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

:26:49.:26:57.

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

:26:57.:27:01.

Americans declared recently. He thought that he could actually work

:27:01.:27:07.

with them to create a mechanism whereby Syria can actually transfer

:27:07.:27:11.

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

:27:11.:27:14.

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

:27:14.:27:20.

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

:27:20.:27:28.

gok circumstance versus the pragmatisim of stability -

:27:28.:27:33.

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

:27:33.:27:36.

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

:27:36.:27:39.

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

:27:40.:27:45.

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

:27:45.:27:49.

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

:27:49.:27:53.

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

:27:53.:27:58.

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

:27:58.:28:04.

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

:28:04.:28:08.

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

:28:08.:28:12.

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

:28:12.:28:17.

the nature of the regime or his behaviour.

:28:17.:28:24.

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

:28:24.:28:29.

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

:28:29.:28:33.

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

:28:33.:28:37.

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

:28:38.:28:43.

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

:28:43.:28:50.

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

:28:50.:28:53.

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

:28:53.:28:59.

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

:28:59.:29:06.

means going to university before tuition fees in England treble next

:29:07.:29:11.

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

:29:11.:29:17.

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

:29:17.:29:20.

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

:29:20.:29:26.

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

:29:26.:29:29.

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

:29:29.:29:33.

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

:29:33.:29:38.

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

:29:38.:29:47.

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

:29:47.:29:50.

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

:29:50.:29:56.

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

:29:56.:29:59.

prospective students more discerning. Four years in

:29:59.:30:01.

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

:30:01.:30:06.

sell their degrees, and to demonstrate to the students that

:30:06.:30:09.

the universities are of high quality and the programmes of study

:30:09.:30:14.

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

:30:14.:30:19.

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

:30:19.:30:22.

employment. Some fear it is students from poorer backgrounds

:30:22.:30:26.

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

:30:27.:30:30.

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

:30:30.:30:36.

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

:30:36.:30:40.

that will affect choice and psychology. Perhaps those with a

:30:40.:30:44.

background without those at university, and without the

:30:44.:30:49.

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

:30:49.:30:53.

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

:30:53.:31:00.

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

:31:00.:31:05.

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

:31:05.:31:14.

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

:31:14.:31:21.

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

:31:21.:31:24.

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

:31:24.:31:27.

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

:31:27.:31:31.

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

:31:31.:31:36.

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

:31:36.:31:42.

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

:31:42.:31:47.

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

:31:47.:31:53.

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

:31:53.:32:03.
:32:03.:32:09.

Studies studied the 2006 tuition That is close to zero and

:32:09.:32:12.

statistically insignificant. At the university of East London, they

:32:12.:32:17.

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

:32:17.:32:20.

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

:32:20.:32:23.

can understand, the Government, working with universities and the

:32:23.:32:27.

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

:32:27.:32:29.

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

:32:30.:32:33.

those messages out to some of the more difficult to reach

:32:33.:32:38.

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

:32:38.:32:42.

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

:32:43.:32:47.

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

:32:47.:32:53.

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

:32:53.:32:58.

tuition fees discourage poorer students we might see them

:32:58.:33:08.
:33:08.:33:22.

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

:33:22.:33:26.

is actually exam results that are the biggest factor in getting

:33:26.:33:30.

students from poorer backgrounds into university. That is the real

:33:30.:33:33.

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

:33:33.:33:37.

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

:33:37.:33:45.

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

:33:45.:33:49.

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

:33:49.:33:53.

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

:33:53.:33:58.

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

:33:58.:34:01.

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

:34:01.:34:05.

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

:34:05.:34:09.

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

:34:09.:34:13.

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

:34:13.:34:20.

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

:34:20.:34:27.

the master of compromise and ended up its victim.

:34:27.:34:31.

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

:34:31.:34:39.

at stake. He listened carefully and then said,

:34:39.:34:46.

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

:34:46.:34:52.

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

:34:52.:34:58.

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

:34:58.:35:05.

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

:35:05.:35:09.

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

:35:09.:35:15.

away. That enormous white building across

:35:15.:35:19.

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

:35:19.:35:23.

headquarters of someone very high up and very important, Vladimir

:35:23.:35:27.

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

:35:27.:35:32.

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

:35:32.:35:36.

attempted coup that tried to topple Mikhail Gorbachev and reverse his

:35:36.:35:44.

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

:35:44.:35:47.

people, economic upheaval was beginning to make life unbearable.

:35:47.:35:53.

The Soviet President, Mikhail Gorbachev, took the brunt of

:35:53.:35:57.

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

:35:57.:36:02.

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

:36:02.:36:05.

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

:36:05.:36:09.

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

:36:09.:36:14.

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

:36:14.:36:19.

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

:36:19.:36:24.

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

:36:24.:36:27.

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

:36:27.:36:32.

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

:36:32.:36:38.

the queue to kill Gorbachev was just too long!

:36:38.:36:45.

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

:36:45.:36:50.

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

:36:50.:36:56.

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

:36:56.:37:00.

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

:37:00.:37:09.

incapable of governing, we were quite convinced about this.

:37:09.:37:13.

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

:37:13.:37:18.

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

:37:18.:37:27.

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

:37:27.:37:30.

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

:37:30.:37:35.

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

:37:35.:37:41.

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

:37:41.:37:45.

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

:37:45.:37:49.

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

:37:49.:37:52.

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

:37:52.:37:57.

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

:37:57.:38:06.

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

:38:06.:38:10.

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

:38:10.:38:17.

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

:38:17.:38:22.

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

:38:22.:38:28.

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

:38:28.:38:38.
:38:38.:38:43.

The coup plotters sent a delegation to confront Gorbachev at his

:38:43.:38:47.

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

:38:47.:38:52.

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

:38:52.:39:00.

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

:39:01.:39:06.

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

:39:06.:39:11.

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

:39:11.:39:16.

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

:39:16.:39:23.

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

:39:23.:39:29.

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

:39:29.:39:39.
:39:39.:39:55.

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

:39:55.:39:59.

State television and radio announced that Gorbachev was ill

:39:59.:40:04.

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

:40:04.:40:14.
:40:14.:40:18.

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

:40:18.:40:22.

Moscow, Gorbachev realised the phones were disconnected, and he

:40:22.:40:26.

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

:40:26.:40:36.

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

:40:36.:40:42.

seashore and everywhere. We entrance they parked cars so nobody

:40:42.:40:47.

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

:40:47.:40:52.

let anyone through. TRANSLATION: Several of our

:40:52.:40:55.

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

:40:55.:40:58.

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

:40:58.:41:03.

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

:41:03.:41:08.

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

:41:08.:41:12.

us from every staircase. In the capital, Boris Yeltsin

:41:12.:41:16.

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

:41:16.:41:26.
:41:26.:41:26.

White House to defend Russia's fledgling democracy.

:41:27.:41:29.

Thousands gathered, people who realised after six years of

:41:29.:41:39.
:41:39.:41:43.

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

:41:43.:41:49.

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

:41:49.:41:53.

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

:41:53.:41:57.

Gorbachev and his family returned to Moscow, but everything had

:41:57.:42:01.

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

:42:01.:42:07.

Gorbachev. A showdown in the Russian

:42:07.:42:13.

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

:42:13.:42:23.
:42:23.:42:27.

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

:42:27.:42:32.

President, interrupted him with the bombshell news that he was

:42:32.:42:36.

outlawing the communist party, Gorbachev no longer had the power

:42:36.:42:43.

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

:42:44.:42:50.

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

:42:50.:42:57.

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

:42:57.:43:01.

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

:43:01.:43:11.
:43:11.:43:12.

without Gorbachev, and we agreed to meet in Belarus.

:43:12.:43:17.

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

:43:17.:43:24.

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

:43:24.:43:30.

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

:43:30.:43:35.

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

:43:35.:43:42.

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

:43:42.:43:46.

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

:43:46.:43:52.

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

:43:52.:43:56.

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

:43:56.:44:04.

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

:44:04.:44:08.

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

:44:08.:44:13.

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

:44:13.:44:18.

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

:44:18.:44:21.

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

:44:21.:44:27.

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

:44:27.:44:37.
:44:37.:44:38.

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

:44:38.:44:44.

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

:44:44.:44:50.

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

:44:50.:44:59.

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

:44:59.:45:03.

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

:45:03.:45:11.

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

:45:11.:45:19.

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

:45:19.:45:25.

Germany. The communist old guard, from East

:45:25.:45:31.

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

:45:31.:45:41.
:45:41.:45:42.

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

:45:42.:45:51.

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

:45:51.:45:56.

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

:45:56.:46:03.

stability, but stability kills stagnation.

:46:03.:46:07.

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

:46:07.:46:12.

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

:46:12.:46:22.
:46:22.:46:24.

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

:46:24.:46:29.

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

:46:29.:46:36.

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

:46:36.:46:42.

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

:46:42.:46:46.

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

:46:46.:46:50.

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

:46:50.:46:54.

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

:46:54.:46:57.

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

:46:57.:47:04.

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

:47:04.:47:09.

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

:47:09.:47:16.

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

:47:16.:47:26.
:47:26.:47:43.

hearing because the council Some people Geithnering in with A-

:47:43.:47:52.

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

:47:52.:48:01.

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

:48:01.:48:06.

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

:48:06.:48:09.

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

:48:09.:48:16.

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

:48:16.:48:22.

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

:48:22.:48:28.

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

:48:28.:48:32.

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

:48:32.:48:35.

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

:48:35.:48:39.

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

:48:39.:48:43.

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

:48:43.:48:47.

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

:48:47.:48:52.

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

:48:52.:48:56.

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

:48:56.:49:00.

uncertainty by the weekend, parts of northern England and the

:49:00.:49:05.

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

:49:05.:49:08.

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

:49:08.:49:12.

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

:49:12.:49:17.

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