26/10/2011 Newsnight


26/10/2011

It's crunch time for the eurozone. Will European leaders holding a crucial summit in Brussels be able to put aside their differences and strike a deal to resolve the debt crisis?


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Transcript


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The make or break meeting on the future of the euro has neither made

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it nor broken it, it looks as if the series of decisions due to be

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taken today, won't now be taken until tomorrow. That is at the

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earliest, it is already gone 11.30 in Brussels. A lot of talk but no

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detail, can Europe's leaders agree how to save the project, they claim

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is key to the continent's future. There is no substantive deal

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tonight, but we may just have seen the birth of a non-euro group.

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Banking has rules that need to be learned and followed. What is a

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billion or so to bank, how can it go missing and no-one notice. John

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Lanchester believes the whole system is so opaque, no-one at the

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top can have any confidence they have a clue what is going on. Nick

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Leeson, the man who brought down Barings Bank, knows exactly how

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true that is. As the seven billionth inhabitant of the planet

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arrives, we look at population in this country. That is the end for

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me, no more sex! Much of it is to do with foreign

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women giving birth in Britain. What does it promise for the future. At

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the global level, the head of the United Nations Population Fund is

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here with Liones Shriver, who needs to talk about the number of babies

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A Greek, an Italian and an Irishman go into a bar, a German settles the

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bill. Much of what was agreed to by the German Parliament today was

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that. But tonight's so-called final and decisive meeting, which was

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supposed to save the euro, is still going on and looks set to go on.

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The Italian Prime Minister did turn up at the EU summit in Brussels

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today, like a schoolboy handing in late homework, with a letter said

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to be promising his Government will try to get a grip. Whether the big

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scheme on the brink of being agreed, we don't know. Paul Mason may have

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an idea. What is up? It will be several hours before

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anybody gets to the bar here in Brussels. They are still behind me

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at it, trying to do the deal. The three things they are trying to do

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is to save Greece, save the banks and then save the eurozone from a

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meltdown following on from not doing the first two. They have

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actually managed to come up with a deal we this already done on Sunday,

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which is to recapitalise Europe's banks. There will be conditions put

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on those banks, shareholders will take some deillusion, anybody who

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can't take the hit of Greece effectively going part bust, will

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be recapitalised. That is a done deal. The other two are not. Across

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the road from me the banks are in negotiation with the EU about how

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much of a hit they are prepared to take. They don't want to take much.

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Meanwhile, there is this huge issue of what does Italy do in return for

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the best part of a trillion euros, for the megabailout that is so

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eluding them. Van Rompuy's spokesman said there

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would be a deal, is there going to be a deal or not? There will be a

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deal. The deal will be a sort of agreement in principle. To come

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back, not even at the Cannes summit, I'm led to understand, but in mid-

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November, and that all the options that are on the table now, about

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the shape of the bailout fund, the ESFS, will still be on the stable

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even after Cannes. If the draft they are discussing tonight, I have

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had sight of the draft, comes out as it went in. The deal is very

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general. The British officials are saying don't expect anything more

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than principles. They live in an armour-plated world,

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he canueding power. But Europe's leaders came here today, because

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for 18 months they have been powerless in the face of market

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logic. And nobody has been more powerless than George Papandreou,

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the Greek Prime Minister. Of all the crises facing the summit, only

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one is imminent. This man's country is rapidly going bust, and soon the

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banks that lent the money will have to decide by how much. And only

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then does this get real. On Friday, Europe's leaders were warned that

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Greek debt is, like its streets, running out of control. The task in

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Brussels to decide how much of the 200 billion worth of debt, held by

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banks, will be written off. The IMF wants 75%, the European Commission

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wanted 60%. The Germans 50%, the banks as little as possible, and to

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do it voluntarily. The voluntary principle is key, because it

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imposes losses on those who have speculated against Greek debt.

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Buyers of derivative, known as credit default swaps. Some think it

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would be better just to let Greece go, formally, bust. The banks are

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resisting haircut, they don't want the losses on the balance sheet.

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They don't want to be recapitalised. There is also a more cynical move

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by the European Commission, and political leaders in Europe, to

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close down the Credit Default Swap market, we which they believe has

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exacerbated the debt markets. Effectively, if they can ban

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trading in the CDS market, and avoid a default, these instruments

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become worthless as a hedge, which is what they were primarily set up

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to achieve. It is a backhand way to close down market they don't like.

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So far the Greek debt issue remains unsolved, but on one issue there is

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progress. Tonight, the European Union

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announced a deal on bank recapitalisation. European banks

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will be forced to raise their core capital to 9% by June 2012.

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Regulators, including in Britain, would force the banks to raise the

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money rather than shrinking back their loans, and those that can't

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raise it privately would be part nationalised. TRANSLATION:

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Everything the euro group does has to be in keeping with the idea of

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the unity of the European Union. We will, in that spirit, present

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certain practical solutions, so we can reconcile these two important

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European interests. The euro area integration on the one hand, and

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the maintaining of the integration of 27 member states. But there is

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one final bit of the jigsaw which is huge, and still missing. It

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concerns the European Financial Stability Facility, the ESFS, a

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megabailout fund. Today has been the tale of two Parliaments, the

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German one, in an orderly way, rubber stamping a deal to expand

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the ESFS. And the Italian Parliament, where the far right,

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and the hard right, had a punch-up over somebody's comment about

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somebody else's wife. To those studying the merging deal

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in Brussels, the contrast sun fortunate, since Italy is the main

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reason why they need to expand the bailout fund. The country is slowly

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being frozen out of the sovereign debt markets, and the Government is

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faltering. The problem with Italy is the paralysis. This Government

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is in a paralysis situation, without the capability to approve

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and to decide what is necessary for the country, and for the country

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the priorities are debt reduction and policies for growth. So for Mr

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Berlusconi, the question is obvious. REPORTER: How can the rest of the

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world take you seriously when you can't deliver austerity?

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David Cameron left the meeting early tonight, Britain not part of

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the core eurozone 17, but not before making this statement.

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made good progress on the bank recapitalisation, that wasn't

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watered down, it has now been agreed. It will only go ahead when

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the other parts of a full package go ahead, and further progress on

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that needs to happen tonight. Well, Paul is in Brussels now. What

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is David Cameron trying to do, Paul? What I think he's trying to

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do, Jeremy, is stealthy create a kind of non-euro group, of the ten

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nations that are not in the single currency. He met the Danes, the

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Swedes, the Poles and the Czechs tonight, that is who he chose to

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meet. The Telegraph is reporting tomorrow it has had sight of the

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diplomatic notes. Britain's negotiating position is this, it

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wants concrete and effective mechanisms to prevent the emerging

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eurozone, it is a were, solidarity, that we are seeing hopefully behind

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us, from damaging Britain's national interest. Mr Cameron made

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it clear last weekend, that will be a condition of Britain, as it were,

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butting out of the whole treaty renegotiation, that will need to

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take place to make the eurozone new mechanisms work. The problem

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Britain has, is that we want, the British Government wants the

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eurozone to work, and to get more like a fiscal union. But as it does,

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and John Major the former Prime Minister is righting in the papers

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tomorrow, in the FT, saying this, we have to decide what powers we

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want to take back. Cameron was laser like in that meeting and

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outside it. That is as significant for us as the Brits, as what is

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going on now still behind me in the negotiating chamber. When are you

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expecting any kind of announcement here? Midnight, maybe afterwards.

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Look, the announcement will be very vague. We don't know how big a hit

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the banks are going to take, if at all. There is still no way they can

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finalise the commitment to bailout Italy, best part of a trillion,

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that is what the ESFS is for. Until Berlusconi comes along with a plan

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for Italian growth based on more that prof Ligacy. He won't do it

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until November 17th, nobody knows the symbolism or significance of it,

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he picked the date. With us is Terry Smith, and Katynka Barysch,

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from Centre For European Reform, and Megan Greene economist. What do

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we make of the fact that there hasn't been the promised decisive

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agreement today, tonight? They said it would be a comprehensive

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solution, but they have been backing down from that since, and

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saying it probably wouldn't end the crisis. There is no surprise there

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isn't a comprehensive solution. think it is impossible for them to

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come up with a comprehensive solution. It was a pipe dream to

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think they could. And you? I agree with that. The problem goes so much

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deeper. The problem is we have overindebted nations in Europe that

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don't grow. We have lack of solidarity, we don't know how to

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get the ECB in. These aren't problems you will sort out in one

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night. Like previous summits. say you will? They are trying to

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calm down financial markets and buy time. Do you think they will?

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think they will. The markets are placid enough, easily led enough,

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to calm down now, are they, and back off? I think the markets

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understand that what they are trying to do now, this three-part

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package, is fiendishly complicated. I would be surprised if they came

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up with a quick solution, with all the numbers and here is the package,

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and this is what it looks like. Because there is so many different

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things that need to come together. It is complex, I'm not too

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surprised by that. The sharks like you in the market, are you going to

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be pacified by this? No, they have not done anything to address, even

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in the things they are discussing, the underlying causes of this. The

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peripheral countries are still all falling short of their deficit

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reduction. It is quite clear that Greece has defaulted, and will go

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further into default, and some other countries will have to leave

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the currency to recover. baffled by some of the talk. All

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this talk about a deal on recapitalising banks, a deal

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involves two contracting parties. The banks have to agree to this,

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they haven't agreed to it? It is not just agreeing, the capital has

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to come, it comes from the Governments putting this forward,

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already too heavily indebted and putting more money into the banks.

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It is not a solution. This is a closed system, there isn't any more

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money other than in one place, which is Germany, even then there

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is not enough so save this without bankrupting Germany, frankly.

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do you make of it? I think the markets might be pacified for a

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week or two, they will see it is not the best solution, but second

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or third best. It doesn't matter f they leverage the ESFS and able to

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support Italy and Spain for 12 months, it is OK if the markets are

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putting pressure on those countries. Do you get the impression that

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these political leaders gathering in Brussels actually have much

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understanding of how markets work? None, it seems to me. Talk of

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leveraging the ESFS, isn't that what got us into the problem in the

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first place. The bailout fund? you stopped someone on the street

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and said you would solve the problem of being overindebted by

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borrowing more money, they would look at you strangely.

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The German Chancellor said this morning, she had this rather

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apocalyptic talk when she talked to the German Parliament, saying

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nobody should take for granted another 50 years of peace and

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prosperity in Europe, they are not for granted, that is why I say if

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the euro fails, Europe fails. This is pretty dark talk? She has been

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saying the same sentence many times over many months. It is expected.

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Will they start war again? Not war, of course. She talked about 50

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years of peace and pros port not taken for granted? The political

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instability you are seeing in the streets of Greece, if this fails

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and we go into a deep, deep recession, you might see it more

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widely in Europe. This is what she's warning about. She's also the

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Chancellor of Germany, expected make statements about the future of

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Europe, strongly. In the beginning when she sounded modest and making

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it sound that it wasn't a problem, she was criticised. Now she has

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brought it up a bit, that is exactly what she should be doing,

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she got a big majority for her mandate to negotiate in Brussels on

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the back of it. What about this idea that Paul Mason was talking

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about just there, of the attempt to form a non-euro group. Many people

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have pointed out that the British ambition, that the euro problem be

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solved by greater fiscal integration, if necessary, in

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Europe, marginalises Europe. But this non-euro group within the

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European Union, actually would be a counter balance thing? Why are we

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worried about being marginalised, the Swiss don't have problems with

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being in the centre of Europe and out, even though they have the

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independent currency and in the centre of Europe. What is the worry.

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It sounds like people saying what they were saying when we were urged

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to join in the first place, we were told it would be a catastrophy, and

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the opposite is true. I think England is trying to stage its

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recovery on balancing the economy on exports mostly going to the

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eurozone. Britain has a choice to make about the role in Europe.

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is the reason it matters, because it matters to us it directly

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effects the well being of everyone in this country. Not just within

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the eurozone. But this idea of there being some sort of balancing

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entity within the European Union is a really interesting one, is it

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viable? I don't think it is viable, I also don't think the eurozone is

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viable in the medium to long-term. Longer term, supposing they do,

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supposing the markets hold off and say we will accept your assurances

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tonight, and they will hold off until November or when ever it is

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we get a few more details, long- term, is the euro viable? I don't

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think it is, I think in 12 months time when this leveraged ESFS runs

:16:32.:16:36.

out of money and Italy Spain go to the markets, they won't look any

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better than they do now. At that point the future of the euro really

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is called into question. inherent contradictions in the euro

:16:44.:16:48.

will still be there, whatever is agreed, won't they? I'm still a

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believer the euro can hold together. Italy and Spain might have

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liquidity problems, but they are countries that should be able to

:16:57.:17:02.

service their debt in the medium to long-term, if we get through the

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rough patch. And if we put enough support into place that the markets

:17:06.:17:10.

stop worrying about Italy and Spain, then, of course, the interest rates

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go down and they are able to service their debt. Greece can't,

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Greece is insolvent, this is why they are talking about a bigger

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reduction in debt. I still believe there is a lot of political will in

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Europe to save this. For me, the most important statement today, did

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not come from the German Parliament or David Cameron, it came from

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Mario Dragiewho said they would continue to buy in the markets.

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He's a politically appointed figure? The head of the European

:17:42.:17:48.

Central Bank. That is still a reasonably independent institution.

:17:48.:17:54.

Hasn't this whole crisis shown us the crisis of political political

:17:54.:17:57.

expectations when it comes to the real world? The issue is the

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eurozone is made up of 17 sovereign countries, and you cannot expect 17

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sovereign countries getting together to make policy with the

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same speed as, let's say, the Federal Reserve in America. Where

:18:10.:18:14.

will we be in a year's time? In a year's time I think Greece will

:18:14.:18:17.

have defaulted, it has defaulted already. Everyone agrees that.

:18:17.:18:23.

will be out of the euro, and one of the greatest things is he who

:18:23.:18:28.

defends everything defends nothing, the defence of Greece may make it

:18:28.:18:31.

impossible to defend Spain, Portugal and Italy. They may have

:18:31.:18:34.

to go for capital controls, like in the UK, when we had exchange

:18:34.:18:39.

control, to stay in there, otherwise they will have a flight

:18:39.:18:42.

of euro deposits from banks that will bring down the banking system.

:18:42.:18:49.

I don't understand what you mean? On the day the euro deposits are no

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longer eurobut drachma, all the deposits from Italy, Spain and

:18:53.:18:57.

Portugal will get up and leave, and that will cause a domino effect

:18:57.:19:01.

that will be very bad. They have to follow out of the euro or put up

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capital controls such as we used to have. Thank you very much.

:19:05.:19:08.

Earlier this evening a former director at the environment bank,

:19:08.:19:13.

Goldman Sachs, handed himself into the europolice, Rajat Gupta has

:19:13.:19:16.

been charged with insider trading. UBS, the big Swiss bank, proudly

:19:16.:19:20.

said today, they won't need to cut any bonuses this year, despite the

:19:20.:19:25.

fact last month they discovered what is called a $2.3 billion

:19:25.:19:28.

unauthorised trading loss. The scandals keep coming. What has gone

:19:28.:19:37.

wrong with banking? In my job, every account, every

:19:37.:19:42.

letter, is not just a soulless piece of paper, but a reflection of

:19:42.:19:51.

some man's life, hope and ambition. Within living memory banks were

:19:51.:19:56.

seen as bastions of respectability, your local branch manager was a

:19:56.:19:59.

formidable pillar of society, guarding your money and

:19:59.:20:05.

occasionally admonishing you to live within your means.

:20:05.:20:10.

But during the 1980s, as the walls between riskier trading and high

:20:10.:20:15.

street banks fell, we grew accustomed to seeing a privileged

:20:15.:20:21.

few in the world's major cities, quaffing champagne and driving

:20:21.:20:28.

Ferraris, greed had become good. And as the rogue trader, Nick

:20:28.:20:32.

Leeson's practices were exposed, the public saw the risks behind the

:20:33.:20:37.

profits. Time and again we were told the ruems were tightening up,

:20:37.:20:41.

time and again rogue traders hit the headlines, and images of

:20:41.:20:45.

conspicuous consumption in the City never went away. Now the title of

:20:45.:20:48.

banker seems to conjure up nothing but contempt in the public mind,

:20:48.:20:51.

despite the fact that the financial sector employs more than a million

:20:51.:20:59.

people in the UK, and last year formed 10% of our GDP. The occupy

:20:59.:21:04.

movement is loudly lamenting the respectablisation of greed. The

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image of banking is of an opaque world where very few understand the

:21:08.:21:12.

rules, and those who do, are ruthlessly selfish, and beyond

:21:12.:21:17.

control. It is our bank and they need to

:21:17.:21:22.

follow our rules. How did banking fall so far from grace? Can it ever

:21:23.:21:27.

return to its position as a pillar of society?

:21:27.:21:31.

With us now, Nick Leeson, who found infamey as the rogue trader who

:21:31.:21:34.

brought about the collapse of Barings Bank, and the journalist,

:21:35.:21:39.

John Lanchester, who wrote a book about the financial crisis, Whoops

:21:39.:21:45.

Why Everybody Owes Everybody ska nobody Can Pay. Nick Leeson, are

:21:46.:21:50.

you surprised these scandals keep on happening? I am, the most recent

:21:51.:21:54.

scandal shocked me extremely. I know how incompetent and negligible

:21:54.:21:59.

I was in Singapore and the bank. Each scandal is described as the

:21:59.:22:02.

wake-up call that nobody should forget. But they occur far too

:22:03.:22:07.

frequently. Why is it that people do forget? I think there is

:22:07.:22:15.

something about you know, it is often to do with arbitrage, people

:22:15.:22:18.

making huge bets supposed to cancel each other out and making a profit

:22:18.:22:22.

from the sliver in the middle. What you have is people leaving out half

:22:22.:22:28.

of the bet, they are so confident about something they make gigantic

:22:28.:22:31.

unhedged punts, because they are certain they will work out. How is

:22:31.:22:36.

it the bosses don't spot it? think it is to do with the size,

:22:36.:22:42.

the speed, the interconnectiveness, the complexity. Banking is so

:22:42.:22:45.

colossal now, it moves at the click of a mouse, hot money moves around

:22:45.:22:50.

the world. I think the idea that you can have adult supervision of

:22:50.:22:53.

it, and someone wisely casting judgment and assessing the risks is

:22:53.:22:58.

just not true any more. Do you think the men on the boards, they

:22:58.:23:02.

are mainly men, the men on the boards of these banks, actually

:23:02.:23:06.

understand what is happening on their trading floors? I think not.

:23:06.:23:10.

I think sometimes in a very broad level they do. Some of these things

:23:10.:23:13.

called black box financial instruments, which featured a lot

:23:13.:23:16.

in the credit crunch, the whole point is the person buying them and

:23:16.:23:20.

the person selling them don't know what is in them. They are put

:23:20.:23:26.

together by financial engineers, with maths PHds, it is a black box.

:23:26.:23:32.

This is nuts? It is a market place based on financial innovation.

:23:32.:23:35.

Speed and complexity is extreme. It is a very competitive environment.

:23:35.:23:41.

The speed and complexity dwarfs other industries. There should be

:23:41.:23:45.

more control. You look at any financial scandal it is down to a

:23:45.:23:50.

very simple control not being in place. Why are the regulators so

:23:50.:23:54.

useless? They always have been. The regulators are always behind the

:23:54.:23:58.

curve. The innovation, the creativity, happens with such speed

:23:58.:24:02.

and complexity that they are always trying to catch up. And you look

:24:02.:24:06.

back 50 years, they were behind the curve then, you look back 16 years

:24:06.:24:12.

ago, which was the time of Barings, they were further behind the curve.

:24:12.:24:15.

If you try to look into the future they will still be behind. What

:24:15.:24:20.

would you do about that? For me it is not the quantity of regulation,

:24:20.:24:24.

whether there should be more or less, the quality has to improve.

:24:24.:24:29.

There is an awful lot of people who were employed by the FSA, being

:24:29.:24:32.

paid large salaries, but not really controlling the market place. So

:24:33.:24:36.

the output needs to be improved. I think you need better people,

:24:36.:24:42.

getting paid more, probably less people, but achieving more output.

:24:42.:24:45.

Public servants being paid a lot more, being paid salaries

:24:45.:24:49.

competitive with bankers? You have to, because the industry is

:24:49.:24:54.

cannibalistic, if you have a good regulator, a good auditor, or

:24:54.:24:57.

somebody on the market place, controlling what is going on, the

:24:57.:25:01.

banks employ them, because they pay them more money. Do you reckon that

:25:01.:25:08.

would work? It is a start. I think, tomorrow by the way, is the 25th

:25:08.:25:14.

anniversary of the big bank, in 1986, they have within on a 25-year,

:25:14.:25:18.

quarter century journey away from deregulation, we have to look at

:25:18.:25:21.

how that worked out for us, and head back in the general way.

:25:21.:25:25.

the question of how we see bankers, you know, it is an embarrassing

:25:25.:25:32.

thing to be for many people nowadays, isn't it? Are we being

:25:32.:25:40.

naive in expecting them to behave some how altruisticically? It seems

:25:40.:25:50.
:25:50.:25:51.

so, not so long kaing Captain Mannering was the image of banking,

:25:51.:25:55.

scruplous and unsympathetic, now we have this regulatory journey where

:25:55.:26:04.

they are seen as unscrupulous, greedy spivs. Is it fair? Not for

:26:04.:26:07.

everyone, there is a lot of principled people in banking. But

:26:07.:26:11.

it is said once a Government loses its reputation for competence, you

:26:11.:26:15.

never get it back. In the world of business, money and ethics, if you

:26:15.:26:18.

lose your reputation for basic decency, it is gone. You look at

:26:18.:26:24.

the last Labour Government, Tony Blair and Gordon Brown were clearly

:26:24.:26:32.

in awe of these nay bobs of finance, they were awestruck, why is that?

:26:32.:26:37.

think it is the case since the time of the big bang, the markets have

:26:37.:26:41.

moved on at such pace, that central banks and Governments have all been

:26:41.:26:45.

unable to keep up with it. There is not the degree of understanding

:26:45.:26:49.

there should be. I was never challenged during my time in

:26:49.:26:51.

Singapore, people didn't understand the business I was trying to

:26:51.:26:59.

transact. That is not acceptable, to anybody. When it gets to the

:26:59.:27:04.

extreme of tax-payers bailing out the banks, that makes it more

:27:04.:27:08.

unpalatable. What do you think, how they came to be so inspiring to

:27:08.:27:12.

many in the political class? think they are partly scared. They

:27:12.:27:16.

are the richest lobby in the world, and therefore the most powerful. It

:27:16.:27:20.

is a bit like one of those things when you have a very complicated

:27:20.:27:24.

chore to do, it is like having stand over you watch you get it

:27:24.:27:28.

wrong, and eventually say would you like me to sort it out for you, and

:27:28.:27:32.

that is what they did. They wrote their own rules and regulations.

:27:32.:27:37.

The idea was the market couldn't create any problems the market

:27:37.:27:42.

couldn't solve. It is that maxim that we now know, conclusively, is

:27:42.:27:46.

not true. Do you think the public need to wise up a bit about how

:27:46.:27:50.

banking operates? Absolutely, I think, you know, growing up, there

:27:50.:27:53.

were probably two industries that would have always had a bit of

:27:53.:27:57.

mystique for me, medicine and banking, the world of finance. I

:27:57.:28:00.

don't think people know enough about them. I had my own experience

:28:00.:28:05.

with cancer, I had to go and see an oncologist, and for a while I was

:28:05.:28:10.

passive recipient of what he told me. I changed that equation around

:28:10.:28:13.

by reading, empowering myself and being part of the process. That was

:28:13.:28:17.

really good for me, and helped me through the whole battle with

:28:17.:28:21.

cancer. I think right now, at this stage, the general public need to

:28:21.:28:25.

empower themselves, and rather than being passive recipients of what

:28:25.:28:28.

the bankers tell them, they need to be part of the equation and ask

:28:28.:28:32.

some searching questions. The degree of leverage people have put

:28:32.:28:36.

themselves under over the last number of years shocking. And for a

:28:36.:28:39.

banker to encourage that, and encourage at their own benefit, as

:28:39.:28:42.

well, they have sold as much of this product, these banking

:28:42.:28:48.

products as they can, around the globe, is not the way it should be.

:28:48.:28:53.

I completely agree. Britain's Government, plus private, plus

:28:53.:29:01.

corporate debt, is 466% of our GDP, that is a scarely big number. That

:29:01.:29:07.

came from people lending us money we didn't necessarily need to buy

:29:07.:29:10.

stuff we didn't necessarily need. There is a whole cycle of

:29:10.:29:15.

excessively cheap credit, which has brought us to a properly, serious

:29:15.:29:17.

predicament. We can extract ourselves, but it will take years

:29:17.:29:27.

and the road is uphill. The seven seventh billionth person will be

:29:27.:29:32.

born next week, the rate of population is increasing by 80

:29:32.:29:36.

million a year. We have been reporting the implications in

:29:36.:29:40.

Africa this week. But it is not just the developing world with

:29:40.:29:43.

problems. Figures today show our population is rising faster than

:29:43.:29:53.

any time in the past century. The total will reach 70 million in next

:29:53.:29:57.

10 years. 47% of the predicted rise will be down to immigration, the

:29:57.:30:01.

other increase, 53%, will be natural increase, the difference

:30:01.:30:05.

between births and deaths. Much of that is due to a leap in the number

:30:05.:30:10.

of children born to migrant mothers. Catrin Nye has spent three days on

:30:10.:30:20.
:30:20.:30:25.

a maternity ward in Leicester for There we go. More babies were born

:30:25.:30:35.
:30:35.:30:35.

in the UK last year than at any time since 1972. Hello sweetheart.

:30:35.:30:40.

Liz and kneel Franklin welcome the latest addition to the babyboom at

:30:40.:30:46.

Leicester Royal Infimary. In 2003, 8,800 babies were born here. This

:30:46.:30:56.
:30:56.:31:10.

Did you know about this little babyboom you are having, did you

:31:10.:31:17.

know it was coming? No we didn't. The national statistics weren't

:31:18.:31:22.

indicating quite the increase that we have seen over the last couple

:31:22.:31:26.

of years. In an ethically diverse city like Leicester, the influence

:31:26.:31:30.

of women born overseas is particularly apparent. 45% of women

:31:30.:31:34.

having babies here were born outside the UK. Across England and

:31:34.:31:41.

Wales, that is 25%. Midwives say they are having to adapt, as well

:31:41.:31:45.

as increase capacity. We knew it was twins, we didn't know the sex

:31:45.:31:54.

at that time. Sandra has just had someones, elij ja and Alicia, they

:31:54.:31:59.

met as teenagers in the Congo, and chanced upon each other many years

:31:59.:32:05.

later in a Leicester church. We have one boy already. What did you

:32:05.:32:10.

feel when you found out you were having twins? She phoned and said

:32:10.:32:14.

you know what it is twins, I screamed, God I'm going to die this

:32:14.:32:22.

time. That is the end of me, and no more sex!

:32:22.:32:26.

Are you planning to stay in Leicester? Yeah, I have been in

:32:26.:32:29.

Leicester for 11 years, I'm not planning to move anywhere else.

:32:29.:32:32.

Unless there is a good place to live.

:32:32.:32:39.

Sure? Honestly, you don't know that. I know. Do you like it here?

:32:39.:32:49.

you? I'm not welcome because I can't work, that is why I was even

:32:49.:32:55.

planning to have more babies, because it is like I was doing

:32:55.:33:00.

nothing. Midwives tell us free movement

:33:00.:33:04.

within the EU has seen a rise in women from Eastern Europe having

:33:04.:33:09.

their children here. Ava and Thomas are from Slovakia and also

:33:09.:33:13.

expecting twins. Thomas was a chef there, and cooks in a KFC here,

:33:13.:33:16.

they are not sure if they will remain in the UK, but are happy to

:33:17.:33:21.

travel back and forward until they decide. It is nothing different the

:33:21.:33:25.

UK or Slovakia, it is a European country, it doesn't matter if it is

:33:25.:33:35.

here or there. Here or there, it doesn't matter.

:33:35.:33:39.

You have an Indian lady, any translators there. The only thing

:33:39.:33:44.

with this lady is her baby has been separated from her, from all ladies,

:33:44.:33:50.

no matter what ethnicity, it is about extra concern to get her to

:33:50.:33:57.

see the baby on the neo-natal unit. Is English her first language?

:33:57.:34:01.

but she can communicate. Sometimes they come and English is not their

:34:01.:34:07.

first language but they can speak good English. If it isn't their

:34:07.:34:10.

first language we need translation services for. We do use the family

:34:10.:34:15.

sometimes, we try not to, to make sure what we are conveying is

:34:15.:34:17.

translated to the woman in the same way.

:34:17.:34:21.

It is the diversity of women having children here that is so apparent,

:34:21.:34:25.

and the pressures that go with that. They have to have specialists to

:34:25.:34:30.

deal with refugee mums, teenage mums, mothers with cardiac problems.

:34:30.:34:35.

Even a dedicated clinic for expectant mothers who have suffered

:34:35.:34:38.

genital mutilation. Reflective of the facilities here, the UK is has

:34:38.:34:43.

seen a significant jump in the number of over-40s having children,

:34:43.:34:48.

caused by both choice and medical advancement, meaning it is now a

:34:48.:34:51.

more realistic option. Emma Giltinam has just had her third

:34:51.:34:57.

baby at 43, it has not been without its difficulties. She has had five

:34:57.:35:03.

miscarriages because of an immune system abnormalty. During her last

:35:03.:35:08.

pregnancy her placenta didn't detatch after birth, something that

:35:08.:35:11.

would mean previously a hysterectomy. He's a double miracle.

:35:11.:35:15.

I had the thing to stop me miscarrying, at a lot of hospitals

:35:15.:35:19.

I wouldn't have a uterus to get pregnant with him. Are you

:35:19.:35:24.

considering a fourth? I walls warranted four, but, I - wanted

:35:24.:35:28.

four, I think I have used my nine lives up now, I'm not sure I would

:35:28.:35:32.

risk it again. With all the problems that we have had. I think

:35:32.:35:35.

I should probably count my blessings and stick at three now.

:35:35.:35:40.

We have got older mums like Emma, mums not born here, mums with

:35:40.:35:44.

medical conditions that used it mean they couldn't have children.

:35:44.:35:48.

For policy makers, any response is complicated by the sheer number of

:35:48.:35:52.

factors influencing the increase. Ten years ago the average woman in

:35:52.:36:00.

England and Wales had 1.63 children. Last year that had risen to 2. The

:36:00.:36:03.

average foreign-born woman used to have far more children than women

:36:03.:36:07.

born here, but recently that gap has narrowed. We have got to a

:36:07.:36:13.

point where the actual physical capacity of our units, can no

:36:13.:36:18.

longer cope with that increase, so what we are having to do this year,

:36:18.:36:23.

is put some capital investment in to created a decisional delivery

:36:23.:36:28.

rooms, additional maternity beds, and we are talking 50 additional

:36:28.:36:31.

midwives. This is when other places are having to see cutbacks, you are

:36:31.:36:35.

having to increase spending here? We are, yes. The challenge here is

:36:35.:36:38.

about numbers, how we adapt to having more children to deliver,

:36:38.:36:44.

mouths to feed, families to house. Wherever they hail from.

:36:44.:36:49.

We are simply having more babies, baby Franklin, just one of many.

:36:49.:36:52.

think there really is babyboom at the moment. There is a lot of

:36:52.:36:58.

people we know that have had babies. To some they are a work force,

:36:58.:37:03.

others a burden on our ever- decreasing resources. For Liz and

:37:03.:37:08.

Neil, simply everything they hoped for.

:37:08.:37:12.

That was Nye reporting. Here to discuss the - Catrin Nye reporting,

:37:12.:37:17.

here to discuss the rise in not just the Britain's population but

:37:17.:37:27.

the world's, is Babatunde Osotimehin, and Lionel Shriver,

:37:27.:37:31.

author and patron of Population Matters. What is your estimate of

:37:31.:37:35.

the total number sustainable on this planet? I don't think anybody

:37:35.:37:40.

knows that. Do you have an estimate? I would rather not put an

:37:40.:37:48.

estimate to it. Can we sustain this level of growth? Let me

:37:48.:37:50.

contextualise that growth, it is important to put that right out

:37:50.:37:55.

there. We have seven billion people today, and the growth rate of the

:37:55.:38:00.

world's population peaked in the 1960s, at about 2%. It has come

:38:00.:38:06.

down, gradually since then, it is about 1% now. If you take all these

:38:06.:38:11.

seven billion people in the world today, and you line them up, to

:38:11.:38:15.

have a group photograph. It would only fill the size of Los Angeles

:38:15.:38:22.

city. It is not about space. It is about distribution, it is about

:38:22.:38:25.

equity, and it is about social justice. If you really believe that

:38:25.:38:29.

people can live that closely cramped together? I'm not saying

:38:29.:38:34.

they are living. It is a pointless comparison that? It is a comparison

:38:34.:38:38.

you have to make, because when you...Why Don't you put a figure on,

:38:38.:38:43.

if you are prepared to make that sort of judgment, why won't you put

:38:43.:38:50.

a figure? Because in the middle 1960s, everybody said there was a

:38:50.:38:56.

population explosion, and that the world would not be able to sustain

:38:56.:39:00.

3.5 billion people. Today we have seven. They talked about lack of

:39:00.:39:06.

food, we produced more than 300% rise in food production. We can

:39:06.:39:10.

carry on indefinitely? I'm not saying that. Why not? I will throw

:39:10.:39:15.

out a figure for you. At about 9.5 billion people we are

:39:15.:39:21.

going to run out of fresh water, and that is, even if that fresh

:39:21.:39:24.

water were evenly distributed throughout the earth, which as we

:39:24.:39:28.

know it is not. The real limit is before that. We're getting pretty

:39:28.:39:34.

close that. You would accept that figure would you? I don't work with

:39:35.:39:38.

that kind of figures. That is political correctness? I tell you,

:39:39.:39:43.

no. We have to look at this diversity of the population

:39:43.:39:48.

dynamics. It is not just about growth. There are many other issues

:39:48.:39:53.

in populations. Shortage of water is a bit of a problem? It is, to

:39:53.:39:57.

everybody. But the context I want us to look at is that there is

:39:57.:40:03.

growth in some places, there is shrinking in some places, and there

:40:03.:40:10.

are issues around ash bannisation on some issues. On - Urbanisation

:40:10.:40:16.

on some issues. I would agree on some of that. All week on the news

:40:16.:40:20.

there is the question, how many people can the earth support.

:40:20.:40:23.

Ultimately that is not the right question, it is not about absolute

:40:23.:40:29.

capacity. It is a question of what number is optimal, what is a good

:40:29.:40:37.

future for the human race? If we allow our numbers to multiply up to

:40:37.:40:42.

the UN top projection, which is 16 billion, what is life like for

:40:42.:40:45.

those people, that is the proper question to ask. If that life is

:40:46.:40:51.

not the kind of life we want to live, if it is on the edge of the

:40:51.:40:55.

ability to feed people, then maybe we should take somes and now.

:40:55.:41:02.

would you propose? I feel that population organisations and

:41:02.:41:08.

Government funding has got distracted in the last 20 years. It

:41:08.:41:14.

has gone very PC, the emphasis has been on improving women's rights,

:41:14.:41:20.

which is good in itself, right. But that's supposed to have a knock-on

:41:20.:41:25.

effect. Women tend to have fewer children if you educate them in

:41:25.:41:30.

human rights? Yes. That is the evidence we have. Once we empower

:41:30.:41:37.

women, you educate them, they make choices which are different, and

:41:37.:41:42.

which tend to ensure that you have less babies, better quality of life,

:41:42.:41:48.

and we have examples. We are on the same page. Brazil is a good example.

:41:48.:41:53.

I completely agree with you. One of the things that helps women is just

:41:53.:41:59.

having birth control. That's what I mean that population organisations

:41:59.:42:02.

and Government policy has to folk cuss a little more on the nitty

:42:02.:42:06.

gritty of Jews making sure that people who don't have access to -

:42:06.:42:10.

just making sure that people who don't have access to family

:42:10.:42:15.

planning do. You are in favour of that in the Population Fund? I am,

:42:15.:42:21.

but I want to state it differently. Because the issue of being able to

:42:21.:42:24.

access also has issues around women's status and the issue of

:42:24.:42:30.

freedom. You know, we can talk about that in London, when you do

:42:30.:42:33.

have family planning clinics everywhere, and people have the

:42:33.:42:37.

right to walk into places and get it. You would be in favour of

:42:37.:42:41.

having them anywhere in the world? Right, but then it has to be in the

:42:41.:42:46.

context of the culture and the place you are working. For crying

:42:46.:42:50.

out loud there are places in the world you cannot set up these

:42:50.:42:53.

things without breaking some barriers and working with them.

:42:53.:43:01.

What I'm saying is that Huang Fang Wen a young girl of 13 or 14 is

:43:01.:43:06.

married off, she has no voice. Trying to provide family planning

:43:06.:43:10.

in a distant clinic won't make a difference to her life. You are

:43:10.:43:13.

saying the same things about empowering women, do you think

:43:13.:43:18.

there sanctions that ought to be taken beyond that, one-child

:43:18.:43:23.

policies? I don't believe coercion is necessary. Unless you have a

:43:23.:43:26.

really repressive Government it won't be effective. You can take a

:43:26.:43:31.

look at a country like Iran. It is hard to find something to admire in

:43:31.:43:41.

Iran, but they produced a miracle demo graphically. In the 1980s they

:43:41.:43:45.

reversed what was a pro-natalist policy and decided they really

:43:45.:43:49.

wanted to bring it down, at that time the total fertility rate for a

:43:49.:43:54.

woman was seven, and within a single generation by 2000, they

:43:54.:44:02.

brought it down to 2.1. How did they do it? A combination of

:44:02.:44:06.

changing the rhetoric and the religious policy, it was a cultural

:44:06.:44:10.

element, but it was also very practical. They put clinics

:44:10.:44:13.

everywhere. Including in the rural countryside and not just in the

:44:13.:44:20.

cities. And between those two policies, they made history demo

:44:20.:44:28.

graphically. We are saying the same thing. We are saying the same thing,

:44:28.:44:36.

if you didn't get mast the Mullahs that would never happen. That was a

:44:36.:44:39.

cultural intervention in Iran. You have to do that in other places,

:44:39.:44:43.

that is empowering them to access what they need to access. You said

:44:43.:44:51.

it, and it is absolutely cerbt, the only sustainable human - correct,

:44:51.:44:55.

the only sustainable thing that works magic is educate girls, give

:44:55.:45:01.

them what they need, make it available. And give them

:45:01.:45:05.

contraception. I know. That goes with it. So it is not just about

:45:05.:45:11.

educating, it is educating, but making it accessible to them.

:45:11.:45:16.

also, this is awkward in the American context, but part of

:45:16.:45:23.

providing contraception is the ultimate contraception is giving

:45:23.:45:30.

people access to abortion. Safe abortion, that will be

:45:30.:45:36.

culturally sensitive in some countries I grant you. That became

:45:36.:45:39.

a problem. Would you accept the availability of abortion? In place

:45:39.:45:44.

where is it is legal, there are countries where it is legal, it

:45:44.:45:49.

should be available safely. Look what happened with the Bush

:45:49.:45:52.

administration, they cut way back on funding for population, because

:45:52.:45:55.

the stipulation was the organisation which you gave funding

:45:55.:46:00.

could not even advise on abortion, much less provide it, unfortunately

:46:00.:46:05.

we got a saneer man in the White House. One point has to be made,

:46:05.:46:09.

that is that preproductive health has to be provided to build women's

:46:09.:46:13.

rights, because it is not just about contraception, it is also

:46:13.:46:16.

about prevention of HIV transmission and several things, so

:46:16.:46:23.

it is not just contraception, it is a whole package. On tomorrow's

:46:23.:46:27.

night programme, Justin Rowlett has been investigating unlikely

:46:27.:46:31.

solutions to the growing demand on the planet's resources. With the

:46:31.:46:36.

world population about to hit seven billion, is it time we all started

:46:36.:46:43.

eating these? That's all from Newsnight tonight,

:46:43.:46:49.

join us tomorrow for another bucket Lloyd of doom and gloom. In China,

:46:49.:46:55.

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

Crunch time for the eurozone - will European leaders holding a crucial summit in Brussels be able to put aside their differences and strike a deal to resolve the debt crisis?


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