:00:11. > :00:13.It's the threat of another banking crisis, and not a speech to a huge
:00:13. > :00:17.conference hall that keeps political leaders awake at night.
:00:17. > :00:22.Is there a plan to stop another crash? How close are we to a
:00:22. > :00:24.banking meltdown? And is there a way to prevent it? With Greece in
:00:24. > :00:28.turmoil once again, the markets seem to think that Europe's leaders
:00:28. > :00:33.are about to act. But is that just wishful thinking?
:00:33. > :00:36.We discuss who's going to default, who's going bankrupt, and who's
:00:36. > :00:41.left carrying the can. Meanwhile, the Prime Minister
:00:42. > :00:44.shares with us his views on borrowing. The only way out of a
:00:44. > :00:48.debt crisis is to deal with your debts.
:00:48. > :00:53.And on mortgages. Because the lenders won't lend, the builders
:00:53. > :01:01.won't build, and the buyers can't buy. We're going to sort this out.
:01:01. > :01:04.So are we supposed to borrow money or not?
:01:04. > :01:07.The Syrian Government lets Lyse Doucet into the town where soldiers
:01:07. > :01:11.have clashed with protestors, there is no problem at all. We haven't
:01:11. > :01:19.talked to one person in Duma. We haven't spoken to a single person.
:01:19. > :01:24.You want us to go, OK, we're going. Also tonight, the moods of the time,
:01:24. > :01:31.and music of the time. You know I hate rembering, I can't bear it, it
:01:31. > :01:36.is all past, you know. Brian Eno, veteran musician and
:01:36. > :01:45.record producer is here to talk about what these horrible economic
:01:45. > :01:49.circumstances might do for modern music.
:01:49. > :01:53.The British news machine was focused on Manchester today.
:01:53. > :01:57.Dutifully dancing attendance on the Prime Minister's speech to the
:01:57. > :02:00.Conservative Party Conference. But decisions of much more importance
:02:00. > :02:05.than anything announced there, were being mulled over elsewhere. For
:02:05. > :02:09.the crisis in the euro has now become a banking crisis. And the
:02:09. > :02:18.possibility of a catastrophic collapse had the German Chancellor
:02:18. > :02:24.promising today to shore up banks the European Union muttering about
:02:24. > :02:28.similar and the sper national monetary - International Monetary
:02:28. > :02:32.Fund talking about getting involved. Is there any plan emerging to shore
:02:32. > :02:36.up the banks? Four months ago, in the middle of the last Greek crisis,
:02:36. > :02:40.I remember being briefed by people close to this action that there was
:02:40. > :02:43.a danger of another Lehman Brothers. If we let Greece default it would
:02:43. > :02:48.shoot through the system and cause another Lehman Brothers. Four
:02:48. > :02:52.months on, all the signs are that many of the stresses in the system
:02:52. > :02:56.are higher than they were when Lehman collapsed. There was a
:02:56. > :03:00.danger, it is not inevitable, that we could have a similar kind of
:03:00. > :03:03.crisis, at more or less any moment. Against this you have to judge what
:03:03. > :03:07.the actions are. There are just three things that need to be done.
:03:07. > :03:11.Greece needs to be sorted out. It is either defaulting or not
:03:11. > :03:15.defaulting. But there is a committee chewing its pen sit,
:03:15. > :03:20.right now in Athens, deciding - pencil, right now in Athens
:03:20. > :03:24.deciding whether or not to do that. The banks need to be recapitalised,
:03:24. > :03:27.someone needs to say there is a plan, not what it is, just a rough
:03:27. > :03:33.outline and people agree it. That too, we have not had that today.
:03:33. > :03:36.Then the big countries, bubbling on the edges, Spain and Italy, which
:03:36. > :03:40.have more structural problems, not so urgent as Greece, but probably
:03:40. > :03:46.bigger. Somebody needs to work out what is to be done about them. I
:03:46. > :03:52.just, with protestors on the streets of Wall Street, protests
:03:52. > :03:58.going all over America, not yet on the scale we see in Greece and
:03:58. > :04:05.Italy, but people generally expressing their disquiet. The
:04:05. > :04:11.short answer is today's been almost day of inaction and going backwards.
:04:11. > :04:15.The bad news drips out day by day, Greece set to miss its budget
:04:15. > :04:20.target. Dexia, the Belgium bank, in trouble, Italy downgraded, and
:04:20. > :04:27.ominously, the bad news flow is speeding up. Faced with the dlet of
:04:27. > :04:31.a Greek debt default, the banks most exposed are showing. It is
:04:31. > :04:36.Dexia, based in Belgium, but so big it would have to be bailed out and
:04:36. > :04:41.broken up with French help. Dexia is not a very big bank. It is
:04:41. > :04:45.partly French and partly Belgian. There is doubt about which country
:04:45. > :04:48.stands behind it. It has a lot of exposure to sovereign debt,
:04:48. > :04:51.particularly Greece. There are reasons to worry about Dexia, on
:04:51. > :04:54.its own it is small. The bigger concern is people will start to
:04:54. > :04:58.worry about other banks, they are even talking about Deutsche Bank,
:04:58. > :05:04.the biggest bank in Europe. Next in the firing line, French banks, and
:05:04. > :05:07.they are not just exposed to Greece. This is a mesh of the default risk
:05:07. > :05:12.This is a mesh of the default risk faced by 25 major global banks. It
:05:12. > :05:16.is higher now than in 2008, that reflects fears of a global slowdown,
:05:16. > :05:22.a second credit crunch, and political paralysis. Suddenly there
:05:22. > :05:27.is talk of bank recapitalisation, as in 2008, a mixture of Arab and
:05:27. > :05:32.far eastern billions and state bailouts. Who will organise it?
:05:32. > :05:35.Chancellor Merkel today came round to the idea in principle.
:05:35. > :05:39.TRANSLATION: The German Government, as the Finance Minister has made
:05:39. > :05:43.very clear in the last two days, stands ready to implement such a
:05:43. > :05:46.capitalisation of the banks if it is needed. We need criteria, we are
:05:46. > :05:51.under time pressure wrecks need to make a decision quickly. The IMF
:05:51. > :05:58.seemed to make a decision today. It volunteered to pile in, alongside
:05:58. > :06:02.Europe, and start rescuing banks Europe, and start rescuing banks
:06:03. > :06:09.itself. There are many other possiblities that are now opened up
:06:09. > :06:13.by this new model for the FSF that we could envisage and we would be
:06:13. > :06:17.ready to make that role. Like ourselves, many other private
:06:17. > :06:23.investors. This is revolutionary, creative, thought the journalists.
:06:23. > :06:26.Within hours, the IMF had retracted the proposal. Moody's last night
:06:26. > :06:30.downgraded Italy's credit rating by three notches, and gave three
:06:30. > :06:35.reasons. And again, it is down to more than just Greece. They cited
:06:35. > :06:40.the increased risk that Italy would default, the downturn in the global
:06:40. > :06:47.economy, and political leadership uncertainty. A sideswipe at Silvio
:06:47. > :06:50.Berlusconi's chaotic Government. Shows at the centre of the 2008
:06:50. > :06:55.bailout are exasperated at the foot-dragging and inaction. They
:06:55. > :07:00.need to understand the lessons we learned in 2007/08. The first is,
:07:00. > :07:09.act very quickly, secondly, overshoot market expectation,
:07:09. > :07:12.thirdly, act comprehensively, seal off all the avenues of attack, and
:07:12. > :07:16.lastly, don't disagree with each other in public. They haven't
:07:16. > :07:20.learned one of those lessons. Greece it is a deluge of rhetoric,
:07:20. > :07:27.protest, tear gas, and economic pain. Few doubt where it will end.
:07:27. > :07:31.Really, Greece is in a situation where it is insolvent, and the deal
:07:31. > :07:35.agreed on its behalf with banks is insufficient to make it solvent. So
:07:35. > :07:40.it needs to have a further restructuring. They need to
:07:40. > :07:44.actually have a firewall between Greece, which is insolvent and
:07:44. > :07:49.Italy and Spain, which has liquidity issues. So it has been
:07:49. > :07:52.another day of rioting andify finance, with nothing solved, and
:07:52. > :07:56.very - at high finance, with nothing solved and very few
:07:56. > :07:59.questions answered. Joining us now is Lord Myners, the
:07:59. > :08:03.former finance secretary, who organised the recapitalisation of
:08:03. > :08:07.the banks here in 2008, Tracey Corrigan, editor of the Wall Street
:08:07. > :08:11.Journal, Europe, and from our studio in Washington, we're joined
:08:11. > :08:15.by the kpwheist, Dr Robert Shapiro, who advised President Obama, and
:08:15. > :08:19.now the IMF. How close are we to banking
:08:19. > :08:22.meltdown? We are already in a banking crisis, demonstrated by the
:08:22. > :08:26.fact that banks are no longer able to finance themselves, many of them
:08:26. > :08:34.in the short-term markets, they are having to rely on the European
:08:34. > :08:40.Central Bank. The closer we get to that abyss the more concrete the
:08:40. > :08:45.plan will be that the Government, that the IMF or EFSF, will have to
:08:45. > :08:48.come up with to convince the market we are not about to go into a
:08:48. > :08:52.meltdown. Robert Shapiro, how does it look from where you are?
:08:52. > :08:55.looks very serious, there has been an underlying problem from the
:08:55. > :09:00.beginning, that is a monetary union can only survive if the full faith
:09:00. > :09:05.and credit of the union is behind the full faith and credit of each
:09:05. > :09:09.member. The problem for the eurozone is there are only really
:09:09. > :09:17.about six members, and only one large one, who have really sound
:09:17. > :09:22.full faith and credit. The problems have really outpaced the capacity
:09:22. > :09:27.of the eurozone's arrangements to address them. So consequently they
:09:27. > :09:32.have to go to more radical reforms. So, just leaving the question of
:09:33. > :09:36.the reform of the euro, to one side, looking specifically at the banking
:09:36. > :09:41.crisis which this has developed into, Lord Myners, you were in
:09:41. > :09:45.charge of the recapitalisation of the banks in 2008, what should be
:09:45. > :09:49.done? Decisive action. Without any further delay. In this type of
:09:49. > :09:56.situation, if you delay, it becomes more costly. The banks need a
:09:56. > :10:01.significant increase in capital. A minimum of 50 billion euros,
:10:01. > :10:04.possibly as much as 150 billion. Plus more liquidity and decisive
:10:04. > :10:10.action by the regulators to agree some new common standards about
:10:10. > :10:13.capital. The key thing is to move with determination and with a
:10:13. > :10:17.comprehensive programme. It is very interesting f it is as plain as the
:10:17. > :10:22.nose on your face, why hasn't anyone done it? Because none of the
:10:22. > :10:26.political leaders want to have to tell Tony Blair tax-payers that
:10:26. > :10:30.once again they are car - to tell their tax-payers that once again
:10:30. > :10:34.they will be carrying the can for this. What do you think? It is not
:10:34. > :10:42.just the money, they have to come up with a set of arrangements,
:10:42. > :10:46.which will assure global investors that if the problems in sovereign
:10:46. > :10:50.debt continue that there will be, that there is access to a great
:10:50. > :10:56.deal more money. The amount of money required to recapitalise at
:10:56. > :11:00.this point, may be a small traction of what would be required if we had
:11:00. > :11:04.a - fraction of what would be required if we had a full blown
:11:04. > :11:09.crisis on Italian and Spanish sovereign debt. Is there enough
:11:09. > :11:14.money physically to do it, Lord Myners? This would require the
:11:14. > :11:23.combined resources of national treasures, the union Financial
:11:23. > :11:26.Stability Facility, and the IM - national treasure rees, the
:11:26. > :11:29.European Financial Stability Facility, the IMF is not willing to
:11:29. > :11:33.step in and provide funds, the Governments have to say they will
:11:33. > :11:37.be there with capital and compel the banks to take capital. That
:11:37. > :11:44.means tax-payers? Yes. It is interesting the IMF is talking
:11:44. > :11:48.about coming into it, if reluctantly, there is clearly a
:11:48. > :11:55.worry that the eurozone won't get it sorted out and may need the IMF
:11:55. > :11:59.as a backstop. Who are the main problem makers, let's Naimos?
:11:59. > :12:04.structural, you have to get - name names. It is structural. You have
:12:04. > :12:10.to get all the countries to agree. In the turnt extension of the EFSF,
:12:10. > :12:14.that is going on at the moment, we are waiting for a vote in Slovakia,
:12:14. > :12:24.where a junior partner in the coalition is holding things up.
:12:24. > :12:25.
:12:26. > :12:29.Let's suppose political leaders remain resistant, what happens?
:12:29. > :12:33.they cannot address this in a credible way, I believe within two
:12:33. > :12:37.to three weeks we will have a meltdown in sovereign debt, which
:12:37. > :12:41.will produce a meltdown across the European banking system. We are not
:12:41. > :12:45.just talking about a relatively small Belgium bank. We are talking
:12:45. > :12:49.about the largest banks in the world, the largest banks in Germany
:12:49. > :12:53.and France. That will spread, it will spread to the United Kingdom,
:12:53. > :12:57.in part through sovereign debt problems in Ireland, it will spread
:12:57. > :13:02.everywhere because the global financial system is so
:13:02. > :13:06.interconnected they are each, all the banks, counter parties to every
:13:06. > :13:10.significant bank in the United States and Britain, Japan, and
:13:10. > :13:19.around the world. This would be a crisis that would be, in my view,
:13:19. > :13:23.more serious than the crisis in 200. - 2008. Is he exaggerating? I wish
:13:23. > :13:27.I could give a more cheerful complex. We are on the verge of a
:13:27. > :13:29.perfect storm. A number of European countries cannot raise money, banks
:13:29. > :13:33.are therefore increasingly worried about the default, therefore people
:13:33. > :13:37.won't lend money to banks, therefore banks won't lend money to
:13:38. > :13:42.business. Something has to be done. It has to be done substantially
:13:42. > :13:47.across the whole of Europe. If you do it individually, country by
:13:47. > :13:53.country, you simply shift the focus from one bank to another. That is
:13:53. > :13:59.why in October 200, we obliged all UK banks to increase capitalisation.
:13:59. > :14:03.We are often accused, journalists of being apocalyptic, this is an
:14:03. > :14:08.apeople lips. What happened to the spirit of the G20? You can still
:14:08. > :14:13.see a way round this, on a more positive note. You can still see a
:14:13. > :14:16.way of taking concerted action which would now, the banks have
:14:16. > :14:19.short-term funding, they can get short-term funding from the
:14:19. > :14:23.European Central Bank. There is not an immediate liquidity crisis. If
:14:23. > :14:26.we get a situation where the banks are recapitalised, and the Greek
:14:26. > :14:31.situation sorted out, and the markets convinced that Spain and
:14:31. > :14:35.Italy, which are really the big ones, will get through this, even
:14:35. > :14:40.with some trouble. If we can push things out a couple of years until
:14:40. > :14:43.that happens, it can still be averted. Are we talking about a
:14:43. > :14:47.crisis that affects, apart from the taxpayer, who has to pay out if
:14:47. > :14:50.action is taken. If the banks go under, does it affect ordinary
:14:50. > :14:55.people? It will have an effect on economic activity. It is worthwhile
:14:55. > :15:01.saying that the UK banks are pretty strongly capitalised. This is not a
:15:01. > :15:05.problem for UK and Scandinavian banks. You have already heard Dr
:15:05. > :15:08.Shapiro say it will affect UK banks? It will affect the UK
:15:08. > :15:11.economy, which is why we have an interest in the economy. The UK
:15:11. > :15:16.banks n relative terms are very well capitalised compared with most
:15:16. > :15:20.European banks. Well, what we don't know, we do know, for example, in
:15:20. > :15:22.the United States, there is relatively, our banks have
:15:22. > :15:27.relatively little exposure to European sovereign debt. They have
:15:27. > :15:32.been getting rid of those holdings for a year. However, no-one knows
:15:32. > :15:37.the state of credit default swaps held by these institutions, again
:15:37. > :15:41.sovereign debt, and against European banks. Nor do we know the
:15:41. > :15:47.state of Credit Default Swaps held by British banks. Nor are we
:15:47. > :15:52.certain of how serious the exposure of British banks is to the Irish
:15:52. > :15:56.sovereign debt problems. What needs to happen night now, Lord Myners?
:15:56. > :15:59.Very significant agreement across Europe to recapitalise the banks.
:15:59. > :16:03.This problem can be solved, it is within the wit of man to do t but
:16:03. > :16:07.it requires the political will of Europe's leaders to agree a
:16:07. > :16:11.programme as soon as possible. Thus far we haven't seen it, have
:16:11. > :16:15.we? No, they are talking in more urgent terms about the plan for the
:16:15. > :16:22.plan, but we haven't got the plan yet. We need to get that now.
:16:22. > :16:26.Thank you very much. We really need two things, not only
:16:27. > :16:31.to recapitalise the banks, even more crucially we have to come up
:16:31. > :16:35.with a credible plan to preserve the stability of the sovereign debt
:16:35. > :16:38.of Italy and Spain. Thank you very much.
:16:38. > :16:44.The main political conference season came to an end today with
:16:44. > :16:49.David Cameron's speech to the one ten thousand nt of the electorate
:16:49. > :16:57.who spent the last few days in Manchester. There was some old,
:16:57. > :17:01.some new, some borrowed and everything washed in blue. A work
:17:02. > :17:06.aday speech, for a work aday crowd. He said there was no money for
:17:06. > :17:08.fireworks, so he asked people to imagine a fireworks display in the
:17:08. > :17:12.future. At party conference top politicians
:17:12. > :17:17.get photographed all day long, the leader's speech, his opportunity to
:17:17. > :17:21.give us his picture. The Chancellor, of course, knew what he was going
:17:21. > :17:25.to say, as party members queued to get in, they could read the preview
:17:25. > :17:29.quotes handed out in time for this morning's newspapers. The whole
:17:29. > :17:32.purpose of the speech is, not to say anything, at least not to say
:17:32. > :17:35.anything startling or revalatory. We have been told to expect a
:17:35. > :17:39.restatement of main of the themes that we have heard from the Prime
:17:39. > :17:44.Minister many times before. The need to sort out the economy. If
:17:44. > :17:49.there is a change, it is simply going to be a tonal nudge, to put a
:17:49. > :17:52.bit more optimisim into the picture. So, you can imagine the
:17:52. > :17:57.consternation in the Prime Minister's camp, when it turned out
:17:57. > :18:04.he had, or his aides had, actually, said something. In briefings to
:18:04. > :18:09.journalists, which resulted in this headline. "Pay off your credit
:18:09. > :18:13.cards, for the sake of the economy". The quote says the only way to deal
:18:13. > :18:18.with the debt crisis is to pay off your debts. That means households,
:18:18. > :18:24.all of us, paying of the credit card and store card bills. This
:18:24. > :18:27.message is both ecomomically and politically difficult. Ecomomically
:18:27. > :18:30.because if everyone starts paying off their debts and spending money,
:18:30. > :18:36.as the Prime Minister appears to be telling us, we can kiss goodbye to
:18:36. > :18:40.a whole load of economic growth. It is what economists call the parodox
:18:40. > :18:45.of thrift. Politically it is difficult, because team Cameron
:18:45. > :18:48.know how bad it is to have a bunch of pretty well off people in
:18:48. > :18:51.cabinet, appearing to lecture the rest of us about what we should do
:18:51. > :18:55.with our money. Even as the seats were filling up,
:18:55. > :18:59.we were told the line was supposed to have described what was already
:18:59. > :19:03.going on. People were already paying back their debts, not, that
:19:03. > :19:07.this was the Government in some way, telling them what to do. In any
:19:07. > :19:10.case, we were told, the line was being we written. The Prime
:19:10. > :19:14.Minister's background was a blue sky obscured with clouds, it fitted
:19:14. > :19:19.with his core message on the economy. We need to tell the truth
:19:19. > :19:23.about the overall economic situation. People understand that
:19:23. > :19:28.when the economy goes into recession, times get tough. But
:19:28. > :19:33.normally, after a while, things pick up. Strong growth returns,
:19:33. > :19:39.people get back into work. This time it is not like that. People
:19:39. > :19:45.want to know why the good times are so long in coming. The reason, he
:19:45. > :19:49.said, was before we could recover, well we had to pay back debt. In
:19:49. > :19:55.saection containing the rewrit - a section containing the rewritten
:19:55. > :20:00.line about credit cards, Mr Cameron said borrowing more was not an
:20:00. > :20:03.option? Why, because it make us it more risky and the threat of higher
:20:03. > :20:07.taxes in future. The only way out of a debt crisis is to deal with
:20:07. > :20:13.your debts. That is why households are paying down the credit card and
:20:13. > :20:17.the store card bills. What had been a controversial line had become
:20:17. > :20:20.unremarkable. And no-one was surprised by Mr Cameron's pledge on
:20:20. > :20:25.the euro. As long as I'm Prime Minister, this country will never
:20:25. > :20:28.join the euro. Labour were blamed for the debt and criticised for not
:20:29. > :20:32.apologising. Public sector strikes were condemned, growth, Mr Cameron
:20:33. > :20:36.said, would come from the private sector. It needed, he said, a
:20:36. > :20:40.change to the planning laws. Mr Cameron said we needed a housing
:20:40. > :20:45.revolution to provide enough homes and enough lending for people to
:20:45. > :20:51.buy those homes. Some kinds of debt, it seems, are OK. Mr Cameron
:20:51. > :20:55.pledged to end, what he called, the scandal of barriers placed in the
:20:55. > :20:58.way of loving families adapting babies in care. And he said because
:20:58. > :21:01.gay marriage would strengthen family life, his party should
:21:01. > :21:03.support it. I don't support gay marriage in spite of being a
:21:03. > :21:10.Conservative, I support gay marriage because I am a
:21:10. > :21:18.Conservative. But mostly this speech was an
:21:18. > :21:21.exhortation, to believe in what he called the can-do spirit of Britain.
:21:21. > :21:25.No Britain ever had the largest land mass or richest resources, but
:21:25. > :21:29.we had the spirit. It is not the size of the dog in the fight, it is
:21:29. > :21:32.the size of the fight in the dog. Overcoming challenge, yes,
:21:32. > :21:35.confounding the sceptics, reinventing ourselves. We have the
:21:35. > :21:39.ideas and the people, and now we have a Government freeing those
:21:39. > :21:43.people, backing those ideas, let's see an optimistic future. Let's
:21:43. > :21:46.show the world some fight. Let us pull together, let us work together,
:21:46. > :21:53.and let us together lead Britain to better days ahead.
:21:53. > :21:58.APPLAUSE George what did you think of that
:21:58. > :22:01.speech? I thought it was fan tais particular, it struck the right now
:22:01. > :22:04.- fantastic, it struck the right note, all about leadership,
:22:04. > :22:08.optimisim. He won this over. He also spoke to the country. That is
:22:08. > :22:13.what we have been doing at this conference. The stuff about credit
:22:13. > :22:17.cards, was that poor drafting? he spoke what we have all been
:22:17. > :22:21.saying, this is a debt crisis, we need to deal with our debts, we
:22:21. > :22:29.understand you can't borrow your way out of debt, that analysis is
:22:29. > :22:39.shared by the British people. Mr Cameron's exit music was clearly
:22:39. > :22:40.
:22:40. > :22:43.inspired by yesterday's called cat flap (Love Cats by The Cure)
:22:43. > :22:47.The Conservative conference ended for the year.
:22:47. > :22:52.Stop talking, there is an audience out there. James Forsyth, the
:22:52. > :22:56.political editor of The Speckor, and John McTernan, political
:22:56. > :23:00.adviser to Tony Blair. They were chewing the fat of what went on in
:23:00. > :23:02.the conference. You might as well continue for the benefit of
:23:02. > :23:08.everybody. Three major conferences over what do we know about the
:23:08. > :23:10.state of British politics then? know there is a complete absence of
:23:10. > :23:14.genuine analysis about the depth of the crisis we face in Britain,
:23:14. > :23:17.Europe and the world, and any actions that any of the leading
:23:17. > :23:21.politicians can sketch out in any detail, that could give people
:23:21. > :23:24.confidence that the political leadership have some project to
:23:24. > :23:27.lead. I think we also know that the mass membership political party is
:23:28. > :23:30.completely and utterly dead. It was striking today during David
:23:30. > :23:35.Cameron's speech how many empty seats there were. Empty seats
:23:35. > :23:39.during a leader's speech. The Prime Minister's speech. I mean, this is
:23:39. > :23:45.a new going to fringe meetings, most people who get up to speak
:23:45. > :23:47.come from lobby groups and NGOs. There is a real problem in politics.
:23:48. > :23:50.There were moments when Cameron improved his delivery during the
:23:50. > :23:55.speech, those were the moments intended to be clipped for
:23:55. > :23:59.programmes like this or the news. There is something really sad
:23:59. > :24:03.happening. Why is the BBC slavishly sending off dozens and dozens of
:24:03. > :24:08.people, why do you go there, and you go there, these are empty
:24:08. > :24:12.events? I think the time has come to say we don't need annual party
:24:12. > :24:15.conferences any more. We're the only political culture in Europe
:24:15. > :24:19.that has annual conferences. They have now run their course. There is
:24:19. > :24:27.no purpose for the speeches, there is no purpose for the meetings. If
:24:27. > :24:30.it wasn't for the lobbyists paying for the passes and sponsoring the
:24:30. > :24:33.fringes. The party is addicted to the money from the lobbyists and
:24:34. > :24:40.the fringe meetings. They never made policy in the Tory Party, or
:24:40. > :24:42.the Labour Party for 20 years have they? I think the end of the mass
:24:43. > :24:46.membership party also reflects John's point, that there is a lack
:24:46. > :24:50.of reality to a lot of this talk. There is also, I think, a problem
:24:50. > :24:54.of, the one speech at the Tory Party conference that soared a
:24:54. > :24:57.little bit was George Osborne. It actually had some explanation to
:24:57. > :25:01.people of what is going wrong with the economy, this is why this time
:25:01. > :25:04.it is different, and this is why we are not growing. That is what we
:25:04. > :25:07.need. That is the danger of politics at the moment, is it seems
:25:07. > :25:12.incredibly detatched from people's lives. That is, when you look at
:25:12. > :25:14.what is going on in Europe, this is going to...To Be fair to the
:25:14. > :25:17.politicians, it is not entirely their fault they are detatched from
:25:17. > :25:23.real life. A lot of the events, which are really going to determine
:25:23. > :25:26.how people live in this country, aren't within their gift any way,
:25:26. > :25:30.are they? I think one of the big criticisms of Cameron's speech
:25:30. > :25:34.today, is there was no sense of what Britain wants the eurozone to
:25:34. > :25:38.do, or the rest of the world to do. There was no sense of I'm going to
:25:38. > :25:42.get on the world stage and load. It was almost very much here is what
:25:42. > :25:45.we do while the rest of the world go to hell in a hand cart. We are
:25:45. > :25:50.in a difficult position in terms of the eurozone. You heard the chaps
:25:50. > :25:53.here a few moments ago, talking about this possible cat it is a
:25:53. > :25:58.trophy about to overwhelm us, we don't have dog in that fight, do
:25:58. > :26:05.we? It is not even having a dog in the fight. I think we should
:26:05. > :26:09.probably ban all metaphors about dogs, cats and fighting.
:26:09. > :26:12.You have Obama facing an election, Merkel facing election, Sarkozy
:26:12. > :26:18.facing election. The three biggest players in the G20, involved in
:26:18. > :26:20.this, are all in fear of their own electorates. So there is a bit of
:26:20. > :26:27.paralysis in other people's politics that is feeding through
:26:27. > :26:33.into this. In contrast, and I think Lord Myners was right, the contrast
:26:33. > :26:37.with 2008, in a global vacuum, actually Gordon Brown did something,
:26:37. > :26:41.he flew to the eurozone and told them what to do. He did take the
:26:41. > :26:44.space and said the world should orchestrate pumping in money and
:26:45. > :26:49.demand. The difficulty today is it is not clear to me that Gordon
:26:49. > :26:52.Brown, or Alastair Darling would know what to say or their like, let
:26:52. > :26:57.alone have the authority to say it to the eurozone. In the end
:26:58. > :27:00.somebody has to take leadership. That is what was odd about
:27:00. > :27:04.Cameron's speech. The leadership was the strap line, there was
:27:04. > :27:07.nothing to lead, unless it was making sure that people can use
:27:07. > :27:11.highlighters in classrooms without health and safety instructions and
:27:11. > :27:16.goggles. When it came to the details they were pathetic. What
:27:16. > :27:21.did you think about the cock-up over the question of credit cards,
:27:21. > :27:25.what does that tell us about the state of the party. It is a very
:27:25. > :27:27.small thing, but, if you are going to try to orchestrate the
:27:27. > :27:31.newspapers to go with a particular line, you better get it right,
:27:31. > :27:34.hadn't you? I think what it tells you is how politicians are
:27:34. > :27:38.struggling to explain. The metaphor for the Conservative Party like to
:27:38. > :27:41.use is the deficit is like the nation's credit card, you can't
:27:41. > :27:47.keep running it up and borrowing more and more money, because you
:27:47. > :27:52.have to pay higher interest and then you end up bankrupt. When they
:27:52. > :27:57.tried to fly it in the speech in the extracts, then they said are
:27:57. > :28:01.you telling everybody to pay for credit card, because that would
:28:01. > :28:05.suck demand out of the economy. And also this thing of David Cameron
:28:05. > :28:10.being a very wealthy man. I think it is simpler than that, they don't
:28:10. > :28:15.have a proper operation in Number Ten. So many people must have read
:28:15. > :28:20.that, before you brief a passage to the paper, the press team, the
:28:20. > :28:25.political team, policy team, number 1, they all have to see it. In the
:28:25. > :28:30.whole set of people that looked at it, they didn't see it causing a
:28:30. > :28:35.bad headline. There are people works closely with the Prime
:28:35. > :28:38.Minister that don't know how newspapers operate or language can
:28:38. > :28:41.be mest misconstrued. There is a failure at the head of the
:28:41. > :28:46.operation. If you brief it, it has to be in the speech.
:28:46. > :28:51.A woman came back from the dead today. Actually Syria put a woman
:28:51. > :28:55.on television, whom the regime claimed had been reported by
:28:55. > :29:01.foreign media as having been beheaded. Thus, they boasted, do we
:29:01. > :29:06.give the lie of the concerted campaign of subversion and
:29:06. > :29:09.terrorism being raged against the boufd leader accidental dictator,
:29:09. > :29:13.Bashar al-Assad. Western reporters who want to find out what is really
:29:13. > :29:17.going on there aren't allowed in. The authorities made an exception
:29:17. > :29:27.for our Lyse Doucet. Though quite how helpful this is to have the co-
:29:27. > :29:37.
:29:37. > :29:40.operation of the regime is another Douma, a suburb of Damascus.
:29:40. > :29:49.An activist in Douma gave us this footage, showing clashes between
:29:49. > :29:54.troops and protestors. They say it has been going on for months.
:29:54. > :29:58.This is why we asked the Government for permission to visit Douma. It
:29:58. > :30:03.was the first place in Damascus to see protests.
:30:03. > :30:09.As we entered Douma, the mood changes. We start seeing soldiers.
:30:09. > :30:16.Look more closely, they are concealed in this olive grove. A
:30:16. > :30:24.car joins us, a group of men we are told know this neighbourhood, they
:30:24. > :30:32.will show us around. We ask to go to places where people
:30:32. > :30:36.gather. They take us to a filling station. We have been trying to
:30:36. > :30:39.negotiate with our escorts, as they are called, what we can see in the
:30:39. > :30:43.suburbs of Douma. It is clear they don't want us to see very much. It
:30:43. > :30:47.is the time of day when not a lot of people are out in the streets,
:30:47. > :30:51.but they still don't want us to go to the markets or places like this.
:30:51. > :30:55.They don't really want us to film here. It feels like a ghost town.
:30:55. > :31:03.We insist we have to meet people who live here. They insist we need
:31:03. > :31:06.to move on. Our next stop, a roundabout. Pretty,
:31:06. > :31:14.but deserted. We were hoping it was a gathering place so we can meet
:31:14. > :31:21.some of the people of Douma, but, in fact, it is pretty quiet here.
:31:21. > :31:26.We hear the call to prayer. Could we go to the main mosque? They say
:31:26. > :31:30.there isn't one. What does he want? You haven't done anything wrong.
:31:30. > :31:34.haven't finished Douma yet or talked to one person in Douma. We
:31:34. > :31:42.haven't spoken to a single person. You want us to go, please, please.
:31:42. > :31:47.OK, we are going. They tell us it is for our
:31:47. > :31:51.protection. Terrorists could attack us. We were told we had to leave
:31:51. > :31:55.immediatey, we weren't really told why. It is really frustrating. We
:31:55. > :32:05.were told by the Government we had to show the truth of the situation.
:32:05. > :32:09.But how can you do that when you can't even film.
:32:09. > :32:14.This may be what they didn't want us to see. This footage was filmed
:32:14. > :32:24.by activists. They say it is from the day we were there. A
:32:24. > :32:27.
:32:27. > :32:31.demonstration, and then arrests. We can't do anything here.
:32:31. > :32:35.terribly sorry. We asked to go back. We are back in Douma again, after
:32:35. > :32:43.our last visit we complained to the Government, they have given us
:32:43. > :32:48.permission to return. We drive past the olive grove where
:32:48. > :32:54.soldiers still wait. We return to the roundabout where we had been
:32:54. > :32:59.told to leave. Last time we filmed trees and a flag. This time a palm
:32:59. > :33:03.tree is part of the story. Those are blood stains do you think?
:33:03. > :33:08.Syrian officials told us a bomb had been found here the day previous.
:33:08. > :33:13.They wanted us to see the work of what they called armed gangs.
:33:13. > :33:18.Around 1.15 pm yesterday, three officers were trying to dismantle a
:33:18. > :33:23.bomb planted here, unfortunately the bomb was being detonated from
:33:23. > :33:29.the remote. So the man who was trying to dismantle it, with his
:33:29. > :33:35.hands, has been split into two pieces. His compan and the other
:33:35. > :33:41.two were killed. - Companion and two others had killed. A man drives
:33:41. > :33:45.up on a motorcycle and said he hadn't heard an explosion. A crowd
:33:45. > :33:53.starts forming, there is confusion about what happened here. Why were
:33:53. > :33:58.they killed if it didn't destroy the tree? Hard one to answer.
:33:58. > :34:07.As the crowd grows there are more men in shell suits, shadowing us,
:34:07. > :34:10.talking on mobiles, listening in. At times like this, Damascenes, who
:34:10. > :34:14.don't have anything nice to say about the Government, don't say
:34:14. > :34:19.anything at all. Unexpectedly one man starts speaking. He wants to be
:34:19. > :34:24.heard and seen. He tells us his son was picked up by security forces
:34:24. > :34:28.yesterday. What was your son doing? Was he protesting? He said they
:34:29. > :34:33.were leaving the mosque, there was a demonstration outside. They
:34:33. > :34:36.weren't at t but they started shooting towards them. They were
:34:36. > :34:44.separated and he saw him being dragged away. His mother is crying
:34:44. > :34:50.looking for him. We will arrest him. Why did you
:34:50. > :34:59.decide to tell us your story? He said he was afraid now, but what
:34:59. > :35:03.will happen will happen. No armoured gangs? Look how quickly
:35:03. > :35:08.the crowd has gathered, they saw a foreign camera here and people
:35:08. > :35:18.wanted to tell their story, in fact this man is very brave to tell us
:35:18. > :35:20.
:35:20. > :35:25.the story of his son who has been taken in.
:35:25. > :35:34.We head down the street to Douma's main mosque, we are immediately
:35:34. > :35:39.surrounded by young men. Suddenly it's a protest.
:35:39. > :35:42.Their voices carry. Within minutes security is on the way. A bus has
:35:42. > :35:47.just arrived with soldiers and yet they are still chanting, and they
:35:47. > :35:54.are not leaving. This is our weapon, they say, the
:35:54. > :35:59.camera is our weapon. Freedom, freedom. Freedom.
:35:59. > :36:04.wanted to stay to see how this would unfold, but we were told we
:36:04. > :36:11.must leave, there is a threat against us.
:36:11. > :36:18.But we don't miss everything. Soldiers to the left. Oh my God, oh
:36:18. > :36:24.my God. Oh my goodness. I can show you what
:36:24. > :36:28.is happening to the right of me, I can't show you, there are two green
:36:28. > :36:33.buses of soldiers pulling away from the square. They just flooded this
:36:33. > :36:40.area moments after we were here, and people were criticising the
:36:40. > :36:46.Government for arresting and shooting at people. As soldiers
:36:46. > :36:49.move down the street, our second visit comes to an end.
:36:49. > :36:54.We are leaving Douma now, but unlike all the other places we
:36:54. > :36:58.visited during our time in Syria, we leave knowing what people think,
:36:58. > :37:08.because they told us. This horrible feeling, we don't
:37:08. > :37:13.
:37:13. > :37:18.know what's going to happen to them We still don't know what happened
:37:18. > :37:23.to the people we met. Today some activists sent us this footage from
:37:23. > :37:32.Douma. We can't verify it, but it appears to show soldiers outside
:37:32. > :37:36.someone's door. Well now, back here, whatever
:37:36. > :37:39.solution is found to the current economic crisis, if indeed one can
:37:39. > :37:45.be found, we are going to be living in difficult times for a long while
:37:45. > :37:49.yet. Money, or lack of it, trust, or lack of it, hope or lack of it,
:37:49. > :37:54.shape our cultural world as much as they shape our politics. Pop Art
:37:54. > :38:00.and punk music, for example, are inacceptable from particular times.
:38:00. > :38:03.So what can we expect this unhappy era to throw up. Do hard times make
:38:03. > :38:07.good music or art? We thought it would be interesting to hear what
:38:07. > :38:17.Brian Eno, one of the world's foremost music producers and
:38:17. > :38:24.
:38:24. > :38:31.writers thinks. Before we hear from It's Nick Clegg's one-time adviser
:38:31. > :38:36.on youth issues. In his own salad days, as the keyboard noodler-in-
:38:36. > :38:46.chief of art rockers, Roxy Music. His outfits were enough to catch
:38:46. > :38:47.
:38:47. > :38:53.your eye, or even have it out! Don't think the roof's leaking down
:38:53. > :39:01.at Eno's lab, no it is the sound of ambient music. The composer has
:39:01. > :39:09.been applying his cool all can he me to this often misunder- alchemy
:39:09. > :39:15.to this often misunderstood genre. You think him of the music boffin,
:39:15. > :39:21.the musical genius of music. His CV is pretty impressive, starting from
:39:21. > :39:29.Roxy Music, his own wild and strange solo years, and then as a
:39:29. > :39:34.producer for multi, multimillion selling albums by people like U2
:39:34. > :39:37.and Coldplay it's a maverick genius burrowing around on the fringes of
:39:37. > :39:45.rock n' roll, producing some of the most interesting work of the last
:39:45. > :39:52.30, 40 years. Do grim times produce great music.
:39:52. > :39:58.Eno may be in a position to know. When he was producing David Bowi,
:39:58. > :40:02.he's lepbldly Berlin albums in the 1960s, Britain had strikes. In 1980,
:40:02. > :40:06.the year of Ronald Reagan becoming President, he was working with
:40:06. > :40:10.seminal American outfit, Talking Heads. The theory that poverty
:40:10. > :40:13.equals interesting culture, is not necessarily one I would like to
:40:13. > :40:17.pursue, I would rather people weren't poor. But obviously when
:40:17. > :40:21.you have a situation like this, it makes people angry, and it makes
:40:21. > :40:25.people frustrated if they are not depressed. And that means they are
:40:25. > :40:28.going to do something. Whether or not it takes the form of the riots
:40:28. > :40:35.that we have seen, or whether or not it takes the form of people
:40:35. > :40:39.making music, or whether or not it takes the form of other types of
:40:39. > :40:42.protest, music is great form of communication. I would always hope
:40:42. > :40:47.people would make music and will make music to accompany these hard
:40:47. > :40:53.times. I'm sure they will. It will be very exciting. As to how Brian
:40:53. > :40:59.Eno makes music with U2 and others, we sense it is not by turning all
:40:59. > :41:03.the knobs up to 1 he has been known to issue musicians with cryptic
:41:03. > :41:08.notes. Sometimes I write on bits of card, rhythm, melody, precussion,
:41:08. > :41:13.something like that. He has these cards that he invented that he
:41:13. > :41:19.would produce, and they would just have words on them, you know, like
:41:19. > :41:26."blue" or "brain", or "tomorrow" or "side salad", I don't know what. He
:41:26. > :41:29.would produce the cards in the studio and the musicians have to
:41:29. > :41:38.play side salad or blue. It is a way of pushing people out of their
:41:38. > :41:43.box. Coldplay released an album, helmed
:41:43. > :41:49.by Mr Eno at the time of the banking crisis. That is the last
:41:49. > :41:53.banking crisis. Hmm, have we hit snag with the theory that troubled
:41:53. > :41:58.times bring forth great music. Ha ha ha had a.
:41:58. > :42:03.Well, you know, everybody has to pay the bills. And also, if you are
:42:03. > :42:08.asked to do something, it is very pleasant. And if you're asked to do
:42:08. > :42:14.something you often do it. I don't have a problem with Eno producing
:42:14. > :42:24.Coldplay or U2. He does plenty of other stuff besides that is
:42:24. > :42:25.
:42:25. > :42:28.interesting. Eno remains endlessly inventive, his latest idea he calls
:42:28. > :42:35.generative music n which a computer sequences programmed sounds. I like
:42:35. > :42:43.it, but I'm not sure it is the Christmas number one. The chrome-
:42:44. > :42:46.domed maverick genius, or whatever is here. With side salad! How is it
:42:46. > :42:51.chrome-dome! This theory about difficult times making interesting
:42:51. > :42:56.music, do you buy it? I think difficult times make for good
:42:56. > :43:00.audiences. I think when times are difficult people are much more
:43:00. > :43:05.interested in art. They are much more interested in seeing things,
:43:05. > :43:08.in being challenged in new ways, in finding exciting new feelings. In
:43:08. > :43:12.comfortable times people aren't very much. Do you think it is
:43:12. > :43:17.happening now? Yes i do. I think there is much more live performance
:43:17. > :43:25.than there has been ever in my life. And of course, there are all these
:43:25. > :43:29.new arts that are appearing now. A lot of them internet based or ap-
:43:29. > :43:32.based. Which are really very exciting, that is the beginning of
:43:32. > :43:37.the future. I think the conventional art forms are losing
:43:37. > :43:42.their funding, in some respects, but creativity is a little bit like
:43:42. > :43:46.water, it seeps out wherever there is an outlet. You are talking about
:43:46. > :43:51.music being the expression of creativity, or is it border than
:43:52. > :43:56.music? Broader - broader than music? Broader. You have to look at
:43:56. > :44:00.all the new art forms, you have to look at 1911 and looking at the
:44:00. > :44:07.first films made. It is very difficult to imagine when you see a
:44:07. > :44:17.flickering train going into a station, that, that will turn into
:44:17. > :44:17.
:44:17. > :44:23.Sit Zen Kane or something like that or Martin Scorsce. What other sort
:44:23. > :44:27.of things? There are lots of things called aps and a lot of people
:44:27. > :44:31.carry a computer in their pocket, means an artist has a new place to
:44:31. > :44:35.work. A lot of people are taking advantage of it, including me.
:44:35. > :44:39.you taking advantage at a visual level, a musical level, or what?
:44:39. > :44:43.Both of those things. Some how it is all scrambled up together?
:44:43. > :44:47.That is one of the things going on, the distinctions between the arts
:44:47. > :44:52.are starting to break down. Everything is much more power rus,
:44:52. > :45:01.it is possible to - porous, it is possible to work in a new landscape
:45:01. > :45:05.that is visual, musical and textual. And everything is available?
:45:05. > :45:11.Including the complete history of recorded art. One thing I notice
:45:11. > :45:18.with young musicians is their palate is enormously broad. They
:45:18. > :45:23.are able to bring in Dave Brubeck and Talking Heads and collageing
:45:23. > :45:28.them together. One of the problems an artist faces is to decide what
:45:28. > :45:31.form shall I work in, what am I doing. I didn't have that problem.
:45:32. > :45:36.I inherited the idea of being a particular type of musician and I
:45:36. > :45:44.expanded it a bit. I never was looking at 50 years past of music
:45:44. > :45:50.as my palate. They are all equally available and considered equally
:45:50. > :45:54.worthwhile, whether Dave Brubeck or Beethoven, or whatever? Do you know
:45:54. > :45:59.this term "open source" t refers to way of constructing and creating
:45:59. > :46:03.things, by sharing them. In a way, the whole cultural world has sort
:46:03. > :46:08.of gone open source. So that everybody is making things, making
:46:08. > :46:12.them available to be shared. As soon as they are digital, they are
:46:12. > :46:18.very shareable, it is very easy to bind together things that are
:46:18. > :46:25.already digital. This idea of open source, which sort of loses the
:46:25. > :46:30.idea of the artist as the primary controlling individual, and the
:46:30. > :46:34.artist becomes more like a member of a commune. So artists are
:46:34. > :46:37.working more and more in communities, and I think people are
:46:37. > :46:41.as well. Is there a particular type of sound that emerges from that
:46:41. > :46:46.sint sis at the end, in a way that you can associate punk, for example,
:46:46. > :46:53.with a particular time in our history? Well, I think, though I
:46:53. > :46:58.don't like to blow my own trumpet, that this idea of generative music,
:46:58. > :47:02.that I talk about, is something that will prove to be a feature of
:47:02. > :47:07.the future. The idea of the composer being more like a gardener
:47:07. > :47:10.than an architect. The vision of the composer traditionally is
:47:10. > :47:15.somebody who has the whole piece in their head and writes it down.
:47:15. > :47:20.Where as, I think, more and more what people are doing now, is
:47:20. > :47:23.assembling sets of musical seeds, and planting them, and watching
:47:23. > :47:31.them develop, watching them evolve. Both electronically and through
:47:31. > :47:35.sharing with other composers and musicians. So, I think we're in a,
:47:35. > :47:42.Cameron talks about the Big Society, it is actually here, we are already
:47:42. > :47:50.doing t we won't recognise it for a long time, but there is an expon
:47:50. > :47:54.earnings expansion of the thaing - exponential expansion from the book
:47:54. > :47:58.The Rational Optimisim, the growth of the collective mind, the idea of
:47:58. > :48:02.people becoming more and more intelligent by sharing in a larger
:48:02. > :48:06.and larger collective mind. Do you know our brains are getting smaller.
:48:06. > :48:16.That is an alarming thought on which to end. That's it for tonight.
:48:16. > :48:22.
:48:22. > :48:26.Quite a blustery spell of weather, rain clearing away from the south-
:48:26. > :48:30.east over the next hour or two. All eyes to the North West, we will
:48:30. > :48:33.start the day with blustery showers. Despite a bright start further
:48:33. > :48:38.south and east, the showers will rattle in on the breeze. Most of us
:48:38. > :48:44.can expect a shower or two on the day. It will be cooler than it has
:48:44. > :48:48.get higher than the mid-teens in most places. Not everyone will get
:48:48. > :48:53.showers, most will. When they come along, they could well be quite
:48:53. > :48:56.heavy. The further north and west you go across the UK, the more
:48:56. > :49:01.widespread and heavier there could well be hail and thunder mixed in
:49:01. > :49:04.as well. Those winds will gust up to 50-60 miles an hour for a time,
:49:04. > :49:09.across parts of Northern Ireland, and up across western Scotland as
:49:09. > :49:15.well. Over high ground of Scotland, we could well see some snow, up
:49:15. > :49:18.over the mountain tops, primarily. A chilly feel, a blustery wind,
:49:18. > :49:22.plenty of showers around. The good news is on Friday most of the
:49:22. > :49:27.showers have dyed away, it will be a bright and - died away, and it
:49:27. > :49:31.will be a bright and crisp end to the week. Make the most of it, it
:49:31. > :49:34.won't last that long, a ridge of high pressure will come in, the