:00:08. > :00:13.Have Europe's leaders delivered us from disaster? At least for a
:00:13. > :00:17.little while. There was a deal, but one that begs more questions than
:00:17. > :00:21.it answered. One thing is clear tonight, that Greece will get a
:00:21. > :00:25.write-down on its debts, but will it be the last it need one. The
:00:25. > :00:30.centre of the crisis is moving across the Adriatic, with all eyes
:00:30. > :00:36.on Italy. I will ask, Romano Prodi, the man who ushered in the euro in
:00:36. > :00:40.1999, if he's about to call time on Silvio Berlusconi. With fiscal
:00:40. > :00:43.integration part of the new euro deal, is it now clear that Britain
:00:43. > :00:48.will never be at the heart of Europe. I will speak to the
:00:48. > :00:53.Treasury, and from New York, the Shadow Chancellor, Ed Balls. Next
:00:53. > :00:57.week, the world's population will pass seven billion souls, do we
:00:57. > :01:05.need to revolutionise our eating habits. We will be cooking and
:01:05. > :01:12.eating some insect delicacies with cullinary enthusiasts, the
:01:12. > :01:17.Colombian ambassador, and a very adventurous cook.
:01:17. > :01:22.Good evening, it took unto the dark watches of the Brussels night, but
:01:22. > :01:27.in the end there was a deal of sorts. A 50% loss of those who lent
:01:27. > :01:32.Greece money. The French President said they had prevented a cat it is
:01:32. > :01:36.a trophy, but Greece shouldn't have been allowed to - catastrophy, but
:01:36. > :01:41.Greece shouldn't have been allowed to join the euro. There was a
:01:41. > :01:45.trillion fund for future bailouts. Markets bounced on the news, but
:01:45. > :01:54.nobody thinks the crisis is over. Maize Paul Mason was there when it
:01:54. > :01:58.happened, he - Paul Mason was there, but joins us now.
:01:58. > :02:02.I think it was massive event. In the first place. We are about to
:02:02. > :02:05.see a developed world country renege on its debts in modern times,
:02:05. > :02:09.that hasn't happened before. We don't know what happens when that
:02:09. > :02:12.happens. On top of that, I think it was big because the European Union
:02:12. > :02:16.had to admit everything it has done for the last 18 months didn't work.
:02:16. > :02:19.Remember it is not just the Greek politicians sitting in Athens
:02:19. > :02:25.saying let's do more austerity, we can recover, the EU signed every
:02:25. > :02:29.one of those plans. On top of that, I think we have taken a major step
:02:29. > :02:35.forward, de facto, towards fiscal union. This EFSF fund, we will hear
:02:35. > :02:38.the details of, it is a rough form of fiscal union, if it doesn't work
:02:38. > :02:42.the European Central Bank will have to controversially step in and do
:02:42. > :02:45.exactly the same thing, that is yet another, unofficial, unplanned step
:02:45. > :02:48.towards fiscal union. The credibility of, as it were, the
:02:48. > :02:56.recent past, is burning, and we just have to hope that the burning
:02:56. > :03:02.doesn't, as it were, get through to the core of the euro project.
:03:02. > :03:06.Up until 4.00am this morning, the euro was burning, but in the
:03:06. > :03:11.Brussels twilight, the politicians found way to put the fire out.
:03:11. > :03:14.The French President, who had resisted the idea of banks losing
:03:14. > :03:23.money over Greece, tonight laid it on the line to journalists, just
:03:23. > :03:28.how much they would have to lose. TRANSLATION: We asked the banks we
:03:28. > :03:34.thought carried a responsibility for their loans to renounce 50% of
:03:34. > :03:40.their claims. So as a result of last night's meeting, Greek debt
:03:40. > :03:47.has gone from 200 to 100 billion euros. The deal, when it came,
:03:48. > :03:54.surprised on lookers with its coherence. 50% of grees Greek
:03:54. > :03:59.detects to banks will be written off, voluntarily, it says. It will
:03:59. > :04:03.be sweetened with 30% of tax- payers' money. Banks will be
:04:03. > :04:09.recapitalised with tax-payers' money, and the EFSF, the
:04:09. > :04:13.megabailout fund, will be expanded to one trillion euro, by borrowing.
:04:13. > :04:19.The fund's boss is headed to China to drum up support. The price for
:04:19. > :04:24.Greece will be high. To Athens they woke up to more news of austerity,
:04:24. > :04:28.and effective control of fiscal policy hand over to a committee of
:04:28. > :04:32.foreigners. TRANSLATION: I don't think it was a good deal. But it
:04:32. > :04:36.was inevitable. At the moment Greece is bankrupt. TRANSLATION:
:04:36. > :04:41.is a dark and shadey deal, everything here gets worse by the
:04:41. > :04:46.day, God help us. This graph shows the horror story
:04:46. > :04:53.Euro-leaders were faced with on the eve of the summit, a new projection
:04:53. > :04:58.showing Greek debt out of control, peaking at 186% of GDP next year,
:04:58. > :05:06.and still 140% in 2030. Under this morning's deal, debt peaks lower
:05:06. > :05:10.and falls paster to 120% of GDP by 2020. - faster to 120% of GDP by
:05:10. > :05:16.2020. 120% is a very high proportion of debt. Greece would
:05:16. > :05:20.still be very heavily indetected by 2020, even if they - indebted by
:05:20. > :05:26.2020, even if they achieved the stated aims. If it fails, since
:05:26. > :05:34.this is the last roll of the dice, the implication would be that
:05:34. > :05:37.Greece will have to leave the euro. It would have to default of its own
:05:37. > :05:43.accord, it would have to reduce the debt through its own decision
:05:43. > :05:47.making, not the decision making of the EU, and the powers, it would
:05:47. > :05:51.have to leave the Euro-. It may fail because the details are
:05:51. > :05:56.crucial, and many are missing. We know French banks will be hit hard
:05:56. > :06:00.by the Greek writedown. We don't know where the money will come from
:06:00. > :06:03.to recapitalise them. It wouldn't surprise me at all to find a number
:06:03. > :06:06.of banks, including particular French banks, have to raise rather
:06:06. > :06:09.more capital than that, it wouldn't surprise me either to find they
:06:10. > :06:14.can't raise it from the private markets, and they have to get that
:06:14. > :06:18.money from Governments. Which then puts quite a lot of strain on the
:06:18. > :06:23.French Government's position, which is already under threat. There is a
:06:23. > :06:29.chance that France is going to lose its triple A credit rating. As we
:06:29. > :06:33.waited last night, and waited, the decision to boost the he was was
:06:33. > :06:38.was expected, but again - EFSF, was expected, but again we don't know
:06:38. > :06:43.who will raise the money. But we know that one trillion euros will
:06:43. > :06:47.be borrowed on risky terms. If it comes from European banks that is
:06:47. > :06:50.not a good result. What happens in those circumstances is if these
:06:50. > :06:55.sovereign borrowers go down, then the institutions that lose as a
:06:55. > :06:59.result of that are European banks. What's at the root of the problem
:06:59. > :07:03.here, is European Governments being unable, or unwilling to put up a
:07:03. > :07:07.enough money themselves to put their own money at risk. It was
:07:07. > :07:12.these worries that led, not just the French, but also David Cameron,
:07:12. > :07:15.last night, to propose behind the scenes the European Central Bank as
:07:15. > :07:20.the backstop, to leap beyond its mand date and become the ultimate
:07:20. > :07:26.buyer of bad debt in Europe. Critics think that suicidal.
:07:26. > :07:31.We are asking the ECB to buy the debt of 17 states, not one state.
:07:31. > :07:36.Some of these states are manifesto insolvent. So we are asking the ECB,
:07:36. > :07:42.in other words, to act as if it were a fiscal authority itself.
:07:42. > :07:45.We're asking it to create by stealth, as it were, the
:07:45. > :07:50.hommojisation of these types of debts, that doesn't exist in
:07:50. > :07:55.praktirbgs we are asking it to acts the state which - practice. We are
:07:55. > :08:00.asking it to act as the state which Europe lacks. For all these reasons,
:08:01. > :08:05.the euro leaders have to hope that last night's decisions put the fire
:08:05. > :08:11.of debt contagion out for good. With us is the Financial Secretary
:08:11. > :08:15.to the Treasury, Mark Hoban. Does the deal commit UK tax-payers to
:08:15. > :08:20.pay up for eurozone countries in difficult difficulty? We have made
:08:20. > :08:24.it clear that the UK Government won't be contributing towards the
:08:24. > :08:29.strengthening of the EFSF, the bailout fund. The Chancellor made
:08:29. > :08:36.that clear this morning, it is a matter for the eurozone to resolve.
:08:36. > :08:40.Let's talk about the IMF He makes it clear he thinks we should put
:08:40. > :08:44.more money into the IMF, that is committing UK tax-payers to put
:08:44. > :08:50.more money into a fund which may eventually be used to help eurozone
:08:50. > :08:54.countries? Let's be clear, there has been no request for IMF
:08:54. > :08:58.resource, and the IMF can't lend money to the bailout fund, but only
:08:58. > :09:02.to countries as part of an agreed bailout programme. What is
:09:02. > :09:06.suggested is the IMF helps administer the bailout fund, or the
:09:06. > :09:11.special purpose vehicle, that is what we are talking about, which
:09:11. > :09:14.doesn't involve the IMF lending out money. The idea that some people
:09:14. > :09:20.call suicidal, David Cameron saying that the ECB should be the one to
:09:20. > :09:24.lend the money? I think the challenge is, trying to find the
:09:24. > :09:29.resources to ensure the bailout fund is credible, and it can, not
:09:29. > :09:34.only help recapitalise banks, if they can't find capital from
:09:34. > :09:39.markets or their own Governments, but also put a firewall around
:09:39. > :09:44.Greece. You don't need the ECB at all, that is out of the equation?
:09:44. > :09:49.What's important is that the mechanism is there to ensure that
:09:49. > :09:53.the bailout fund is big enough, and strong enough. That is why, given
:09:53. > :09:59.that the eurozone have ruled out using the ECB, they are now looking
:09:59. > :10:07.at other areas. Not using the ECB, in your view, the ECB will not be
:10:07. > :10:12.called on? That's what the eurozone lead - leaders agreed last night.
:10:12. > :10:17.What do you think should happen? What Paul Mason said last night was
:10:17. > :10:20.absolutely right. Last night's deal was good progress, now they need to
:10:20. > :10:28.provide detail to boost market confidence and keep it on track.
:10:28. > :10:30.Part of that detail is how will the EFSF be funded. Let's talk about
:10:30. > :10:35.our banks, are you convinced our banks are secure at the moment?
:10:35. > :10:38.What the work that the EBA, the European Banking Authority did
:10:38. > :10:41.demonstrate, is there was no requirement for additional capital
:10:41. > :10:45.to be paid into British banks. What we have seen over the course of the
:10:45. > :10:50.last two or three years, is British banks, putting aside more capital,
:10:50. > :10:53.and also holding high liquidity. That has meant they have been in a
:10:53. > :10:58.better place to withstand this crisis than banks elsewhere. At the
:10:58. > :11:04.moment we have talked about the fact it is more the French banks
:11:04. > :11:08.exposed to the write-down of Greek debt, what if other countries in
:11:08. > :11:14.the European Union need write-downs, British banks will be more exposed?
:11:14. > :11:17.The European Banking Authority, looked at the exposures each bank
:11:17. > :11:20.has to European sovereign debt and market-to-market, that is
:11:20. > :11:23.demonstrated where capital is required in places like Greece and
:11:23. > :11:27.Spain, and France and Italy, and those countries where it is not
:11:27. > :11:31.required, that includes Britain. I think our banks are in a good place
:11:31. > :11:35.to withstand this. Of course the Bank of England and the FSA do
:11:35. > :11:38.regularly look at what's happening in the banks and ensure they are
:11:38. > :11:41.still safe. What we have seen is significant progress in the last
:11:41. > :11:45.two or three years to strengthen the banks. That has kept our banks
:11:45. > :11:48.in a good place during this crisis. Thank you very much for joining us.
:11:48. > :11:51.We're joined by the Shadow Chancellor, Ed Balls, who joins us
:11:51. > :11:56.from New York. In your view, was the best deal
:11:56. > :11:59.done last night that could have been done? Well, we don't know, to
:11:59. > :12:03.be honest. It is good to have progress, it is good to see a
:12:03. > :12:06.political commitment, but we have been here before, where we have had
:12:06. > :12:11.strong words from eurozone leaders, and it has not turned out to
:12:11. > :12:14.deliver the detail. In fact, there has been contradictory messages
:12:14. > :12:17.afterwards. We will have to wait and see. I really hope they have
:12:17. > :12:21.managed to agree what needs to be done. At the moment there is a
:12:21. > :12:25.question about the detail, and there is two questions. First of
:12:25. > :12:29.all, in the end the European Central Bank ought to be the lender
:12:29. > :12:33.of last resort. If that is not going to happen, is there really
:12:33. > :12:37.the financial clout in the eurozone to do it other than the Central
:12:37. > :12:40.Bank. And secondly unless the European economy grows in the next
:12:40. > :12:45.year, this crisis will deepen. Is there a plan for growth and jobs?
:12:45. > :12:48.Not really on the table yet. That is actually the biggest risk to the
:12:48. > :12:53.eurozone economies and the British economy too. So, let's be clear,
:12:53. > :12:57.your view is, you have heard what Mark Hoban said, that actually the
:12:57. > :13:00.ECB should be directly involved, it will be very much as a state fiscal
:13:00. > :13:05.authority, it would be step anything, there would be a very
:13:05. > :13:09.strict set of rules and that is what the ECB's rules should be?
:13:09. > :13:12.Mark was being diplomatic. But the fact is, there is a single currency,
:13:12. > :13:16.in a single currency, in America, or in Britain, where we have a
:13:16. > :13:19.currency, and in the eurozone, the lender of last resort, should be
:13:19. > :13:24.the Central Bank. And the Central Bank should say, we will stand
:13:24. > :13:28.behind the sovereign debt of our member states. Now there is a quid
:13:28. > :13:33.pro quo for that, which is fiscal responsibility, but the problem in
:13:33. > :13:37.recent months has been this doubt. Will the ECB actually guarantee
:13:37. > :13:41.Italian debt when there is no solvency problem for Italian debt.
:13:41. > :13:44.The problem is this question mark, the question mark is, is there
:13:44. > :13:48.really a political commitment in Germany, France and other member
:13:48. > :13:52.states, to deliver on the reality of what they have already done,
:13:52. > :13:55.which is form a single currency. What we are seeing instead is lots
:13:55. > :13:59.of gyrations, getting money from the Chinese, and now there is the
:13:59. > :14:02.question of the IMF putting money in, it is all a substitute for
:14:02. > :14:05.doing what should be done in a single currency, which is have a
:14:05. > :14:08.Central Bank with the power and political backing to do what it
:14:08. > :14:12.takes. Let's talk about the IMF, Labour voted against increasing the
:14:12. > :14:17.amount of money into the IMF. Was that a mistake when you voted
:14:17. > :14:20.against that in the summer? Not at all. Would it be a mistake now,
:14:20. > :14:25.George Osborne said today that they will increase the amount of money,
:14:25. > :14:28.if necessary, for the IMF, is he wrong about that? Let me explain
:14:28. > :14:32.exactly our position. The Conservative Party make as very odd
:14:32. > :14:36.claim about all of this. The IMF is a hugely important institution, I
:14:36. > :14:41.back it 100%, I was the chair of the deputies for a number of years.
:14:41. > :14:44.But what you can't do is say the IMF will step in to provide money
:14:44. > :14:48.for the eurozone, which the eurozone leaders themselves are not
:14:48. > :14:52.willing to sort out and commit. That is still a question mark. What
:14:52. > :14:56.the position was in the summer. What is your position now, quite
:14:56. > :15:00.clearly, is your position now, that you agree with George Osborne, that
:15:01. > :15:05.if necessary, there will be an increase in funds, from Britain to
:15:05. > :15:12.the IMF, do you agree with that or not? Well, what we said in the
:15:12. > :15:16.summer, and what I will vae say to you again tonight, is - I will say
:15:16. > :15:22.to you again tonight, if they are not relying on IMF funding to bail
:15:22. > :15:28.out the eurozone, for an excuse of the eurozone putting the money up,
:15:28. > :15:32.then I agree to an upping of the subscription. But if it is so the
:15:32. > :15:35.eurozone itself hasn't got to do it, that would be completely wrong and
:15:35. > :15:41.misleading to British tax-payers. There is a lot of clarity - lack of
:15:41. > :15:46.clarity about what the role will be. President Sarkozy was talking about
:15:46. > :15:53.the financial transaction tax again, do you support the so-called Tobin
:15:53. > :15:56.tax, do you support that tax? if it is based on the widest
:15:56. > :16:00.constituency possible, that must include the major financial centres
:16:00. > :16:04.of the world. It wouldn't be satisfactory for it to happen
:16:04. > :16:07.simply at the level of the eurozone. You don't think it should just be
:16:07. > :16:09.the eurozone? I don't, that has never been the Government as
:16:09. > :16:13.position, the British Government under Labour and now Conservative,
:16:13. > :16:16.is here in New York, in other financial centre, they would all
:16:16. > :16:21.need to be part of it. My frustration is George Osborne says
:16:21. > :16:24.no to a eurozone tax, but is not making the case for global action,
:16:24. > :16:30.that is what I have been discussing the last couple of days here in New
:16:30. > :16:33.York. A global case for action on a financial transactions' tax.
:16:33. > :16:36.Eurozone-only, absolutely not. The big question is, are we going to
:16:36. > :16:40.have growth and jobs in the eurozone in the British economy in
:16:40. > :16:46.the next year, without that all of this is pie in the sky.
:16:46. > :16:49.Ed Balls thank you very much. For years, Silvio Berlusconi has
:16:49. > :16:55.provided colourful and sometimes staggering stories for the world's
:16:55. > :16:58.media. Now, however, feel he might be the key to making sure the
:16:58. > :17:04.European crisis won't get much worse. Italy is the third-largest
:17:04. > :17:09.economy in the eurozone, and has considerable debts. If it needs
:17:09. > :17:14.bailout, the question is Germany's pockets won't be deep enough, that
:17:14. > :17:23.is why there has been pressure on the ilt Italian premier for
:17:23. > :17:27.austerity and reform. We have spent the day in Rome.
:17:27. > :17:33.Austerity, Italy? Some how the who words just don't go together. This
:17:33. > :17:37.is still a country that knows how to live well. That makes and sells
:17:37. > :17:43.quality goods the whole world wants to buy, and yet, the fear is, that
:17:43. > :17:50.the disease that is sinking the Greek economy, may spread here next.
:17:50. > :17:54.With a public debt equal to about 120% of its GDP, and growth barely
:17:54. > :18:01.above zero, Italy has to reform fast, to avoid possible financial
:18:01. > :18:03.meltdown, and a bailout the EU might not be able to afford. The
:18:03. > :18:07.Prime Minister, Silvio Berlusconi, seems to have calmed the fears of
:18:07. > :18:11.some of his fellow EU leaders this week, with a list of plans to cut
:18:11. > :18:17.spending and revive the economy. The question is, can Berlusconi,
:18:17. > :18:24.that great salesman, sell those reforms to his own people. The
:18:24. > :18:30.answer, from Italy's powerful trades unions, is IRA sounding, no.
:18:30. > :18:35.It would be negative because the burden of the crisis is put only on
:18:35. > :18:44.the shoulders of the workers and the pensioners. For the pensioners
:18:44. > :18:49.increasing the age of working to to the retirement, for the workers
:18:49. > :18:56.easing dismissal by enterprises, and for the young people having
:18:56. > :19:06.nothing in terms of employment for new jobs.
:19:06. > :19:13.
:19:14. > :19:23.But in Italy's parliament yesterday, passions over the retirement age
:19:24. > :19:26.
:19:26. > :19:30.led to fist at this cuffs between some deputies, - this member of the
:19:30. > :19:38.Northern League was not involved in that, but she won't take economic
:19:38. > :19:42.lessons from Germany and France, and resents the conconned sepbgs
:19:42. > :19:46.this week TRANSLATION: It is not nice to laugh at another country,
:19:46. > :19:50.and not nice behaviour from two respectable people, who both have
:19:50. > :19:53.different internal problems of their own. Her party was reported
:19:53. > :19:59.this week to have dropped its long standing opposition to raising the
:19:59. > :20:02.pension age. In fact there was no major concession. Retirement at 67
:20:02. > :20:08.won't become universal until 2026, as already planned. In this society,
:20:08. > :20:12.where many are used to long holidays, generous benefits and job
:20:12. > :20:18.security, it won't be easy for Mr Berlusconi, or any other leader to
:20:18. > :20:23.deliver on promises of speedy reform. It is our ruling class,
:20:23. > :20:31.including the political class, including trade unions, the
:20:31. > :20:35.entrepeneurs, the bankers, are they ready to risk something in terplgs
:20:35. > :20:40.of consensus between their - in terms of consensus between their
:20:40. > :20:46.associates and public opinion, and do something that can be, to some
:20:46. > :20:54.extent, not exactly popular, but that is needed? On this I have
:20:54. > :20:58.doubts. I think there is not this sort of ability now, there is not
:20:58. > :21:02.enough willingness to risk something. One problem in
:21:02. > :21:06.persuading Italians to accept reform, is that the political class,
:21:06. > :21:13.which must implement any changes, is itself so widely discredited by
:21:13. > :21:19.revelations of its featherbeded lifestyle. How come, Italians ask,
:21:19. > :21:24.an MP can serve just one-term, and still receive 5,000 euros a month
:21:24. > :21:30.in pension at age 50. While an ordinary voter will get 1,000 a
:21:31. > :21:38.month, an offage, at age 65, after a whole lifetime's work. If there
:21:38. > :21:43.is no reform, will Europe end up throwing money at itly the as
:21:43. > :21:46.recklessly as the tourist at the Trevi fountain.
:21:46. > :21:50.Some think Italy will solve its own problems, perhaps under a new
:21:50. > :21:54.Government. Is that wishful thinking? If they are wrong, the
:21:54. > :21:57.consequences for the whole European project would be immeasurable.
:21:57. > :22:05.cost of financing our debt would become so high, and this will
:22:05. > :22:12.happen if we do not do the things that were discussing before I think
:22:12. > :22:15.in that case Italy will be forced out of the euro at some point, by
:22:15. > :22:24.the markets. Only the European Central Bank could do something,
:22:24. > :22:30.but how then becomes not exactly clear. At that point, the euro and
:22:30. > :22:34.the area could break up. In the streets of the eternal city, you
:22:34. > :22:38.might think, crisis, what crisis? Tomorrow in the streets there will
:22:38. > :22:46.be a demonstration by pensioners, angry about falling living
:22:46. > :22:49.standards. The organisers' slogan "when there is a threat of cuts
:22:49. > :22:55.nessun dorma" nobody sleeps. I will speak to the former Italian Prime
:22:55. > :23:01.Minister, Romano Prodi, in a moment. First, no-one disputes last night's
:23:01. > :23:04.events could be a new era in Europe, with the eurozone fiscal
:23:04. > :23:07.integration being regards as a Euro-state. What will bind it
:23:07. > :23:11.together and who will bind it together? Our diplomatic editor is
:23:11. > :23:16.here with his thoughts. What do you think the UK
:23:16. > :23:18.Government's real reaction to last night's summit is? As you imply,
:23:18. > :23:21.superficial politeness, if you think about the two key messages
:23:21. > :23:25.they have been giving. They have been disappointed in both. On the
:23:25. > :23:31.one hand, the Chancellor, we want to move towards some kind of fiscal
:23:31. > :23:34.union, on the other hand, the UK and the other ten non-your you are
:23:34. > :23:37.eurozone countries, must - non- eurozone countries must not be shut
:23:37. > :23:41.out of it. We know the key business was done last night after the ten
:23:42. > :23:45.had left and it was just the eurozone. What can the Government
:23:45. > :23:49.say today, simply reiterate their earlier position, and we heard that
:23:49. > :23:53.today from William Hague. changes or reforms that take place
:23:53. > :23:57.within the eurozone, it is vital that matters like the European
:23:57. > :24:02.single market which belongs to all 27 of the EU members, that those
:24:02. > :24:07.decisions are made by the 27 nations. So in any changes the top
:24:07. > :24:10.priority of the UK will be to ensure that is the case. But are
:24:10. > :24:14.there actually opportunities for David Cameron in this situation?
:24:14. > :24:20.There could be. If things go full speed towards fiscal union, in a
:24:20. > :24:25.way they clearly are not doing, but if it picks up momentum, there
:24:25. > :24:28.could be a definitive two-stage Europe. Casting some people back to
:24:28. > :24:31.the 1960s for a similar moment. If you look back to the very early
:24:32. > :24:34.days, Britain and some of the other countries, the so-called outer
:24:34. > :24:39.seven, they were called, they were the country on the fringes of
:24:39. > :24:45.Europe, that were not part of the EEC, as it then was. And France was
:24:45. > :24:51.the leading power in the EEC, they blocked Britain's entry, and they
:24:51. > :24:56.saw the EEC as a vehicle for an extension of their political will
:24:56. > :25:00.through Europe. Germany relatively weak back then. Britain had EFTA,
:25:00. > :25:06.the European free trade association on the margins. Today, different
:25:06. > :25:10.shadeings on the map, the core is bigger, the 17 of the eurozone,
:25:10. > :25:14.including one or two of the EFTA countries, but there is an
:25:14. > :25:17.opportunity in the east there are countries also like Sweden, that
:25:17. > :25:21.are closely aligned, and there have been definite hints from Downing
:25:21. > :25:27.Street that they see a political opportunity here in marshalling the
:25:28. > :25:31.awkward squad, as it were, the non- eurozone countries. If you try to
:25:31. > :25:35.project ahead in the coming months or years, we could see a situation
:25:35. > :25:40.where France's diplomatic objectives of the last 50 years
:25:41. > :25:46.come absolutely no nougt, as Germany takes over real power
:25:46. > :25:53.within the eurozone. Britain has some kind of diplomatic latitude on
:25:53. > :25:57.the periphery. To discuss that in the studio, former British cabinet
:25:57. > :26:00.minister, Lyon Britain. And former Italian Prime Minister and
:26:00. > :26:04.President of the European Commission when the euro was
:26:04. > :26:08.introduced, Romano Prodi. First of all, Romano Prodi, tonight
:26:08. > :26:13.President Sarkozy said it was a mistake to have let Greece into the
:26:13. > :26:20.euro in the first place, you were presiding at that time, is he
:26:20. > :26:26.right? Well Greece came later. year later? Not when I was there.
:26:26. > :26:34.But any way. We have to be also very clear, when the commission
:26:35. > :26:40.proposed to France and Germany, to all the countries, to check the
:26:40. > :26:48.national accounts of the countries, France, Britain, and Italy, who was
:26:48. > :26:54.trailing in that moment. They refused it, they refused even the
:26:54. > :27:02.control, and so Greece could cheat because it was permitted to cheat.
:27:02. > :27:07.This is the real historical fact. It is important, because you know,
:27:07. > :27:14.when I declared in that time that we couldn't only be based on the
:27:14. > :27:21."stability pact", because it was stupid, I told them, maybe I used a
:27:21. > :27:25.bad word, I was just thinking what could happen. You needed an
:27:25. > :27:29.authority, but it was refused by the leading European states.
:27:29. > :27:33.now we're in a situation where looking from Greece across the
:27:33. > :27:38.Adriatic, it is your country, where a lot of the problems lie. And some
:27:38. > :27:44.of these problems, for Silvio Berlusconi, may be insurmountable.
:27:44. > :27:51.What is going to happen, because soon Italy may need a bailout too?
:27:51. > :27:59.Look, look, look, let's be clear, insurmountable is a strong word. In
:27:59. > :28:07.the sense that we have 120% outstanding debt, it is the same
:28:07. > :28:11.number we had when Italy entered into the euro. But your growth is
:28:11. > :28:19.only 0.7%? Yes, yes, yes, I come to the growth. Because you are right,
:28:19. > :28:24.this is the point. But you know, a tragic aspect is, if your debt
:28:24. > :28:32.explodes, second, the deficit is under control, much better than in
:28:32. > :28:37.France, or in the UK. I want to bring in Lyon Britain, Romano Prodi,
:28:37. > :28:41.just one quick question for you on this, in order for Italy to have to
:28:41. > :28:51.put its house in order, does Silvio Berlusconi have to go quickly?
:28:51. > :28:57.He has to go quickly. He has been obliged because of the letter he
:28:57. > :28:59.sent, it was, I think, written with a pencil of the European
:28:59. > :29:03.authorities. I have another question for you on the basis of
:29:03. > :29:07.that, before I come to Leon Britain, if Silvio Berlusconi has to go
:29:07. > :29:17.quickly, are you going to come back, are you going to ride to the
:29:17. > :29:19.
:29:19. > :29:23.rescue? Me? Personally you mean? No, I am grandfather!
:29:24. > :29:28.Is Italy one of the biggest problems now in facing the eurozone
:29:28. > :29:31.countries? There is no doubt at all that Italy needs and radical
:29:31. > :29:35.structural reform and that is a very important factor in the whole
:29:35. > :29:40.equation. There is no doubt about that. Where do you think last
:29:40. > :29:45.night's deal leaves Britain, because you heard Mark Urban say,
:29:45. > :29:50.there may be a role for Britain, as a kind of the ringleader of the
:29:50. > :29:54.others? Let's be clear, what Britain's real interests are. They
:29:54. > :29:58.are, above all, to protect the operation of the single market,
:29:58. > :30:02.which has been a huge gain for Britain. And which means the
:30:02. > :30:08.removal of barriers across Europe. And therefore, what Britain has to
:30:08. > :30:12.do is to be extremely vigilent about that, and rightly so. Whether
:30:13. > :30:16.other countries engage in diplomatic manoeuvres or not, is a
:30:16. > :30:21.of very much less importance in protecting the single market.
:30:21. > :30:24.Romano Prodi, on your view of where Britain stands on this, obviously
:30:24. > :30:27.it was only the ten who were talking last night about the way to
:30:27. > :30:30.sort out the problems in the eurozone, Britain had to leave
:30:30. > :30:40.because Britain is now seen by some as not being at the heart of Europe.
:30:40. > :30:49.Do you think that Britain has lost its position in Europe now? Yes. I
:30:49. > :30:57.think, yes. Because I do think that Europe cannot be stopped. We will
:30:57. > :31:04.make progress, and I see the UK more and more in a corner, less and
:31:04. > :31:14.less, more and more reluctant to engage itself in European
:31:14. > :31:14.
:31:14. > :31:21.engagments. After last night, I think that in any case. Europe will
:31:21. > :31:30.be more strongly linked to the European countries, and the UK is
:31:30. > :31:34.not among them. The EU remains absolutely central to Britain, and
:31:34. > :31:38.yes it does. Does it? It doesn't remain essential to a lot of the
:31:38. > :31:42.backbenchers in the Conservative Government? You will not find there
:31:42. > :31:46.are very many backbenchers asking Britain to leave the EU. They are
:31:46. > :31:50.asking for a re-think? They are asking for a renegotiation of
:31:50. > :31:52.various aspects, which may or may not be possible. The important
:31:52. > :31:56.thing is Britain's membership of the European Union cannot be taken
:31:56. > :31:59.away from it. Britain's participation in the single
:32:00. > :32:04.currency, and the maintenance of the single market, something
:32:05. > :32:08.Britain is entitled to, legally, demand, and protect. That is
:32:08. > :32:11.Britain's main interest. Manoeuvrings of a diplomatic kind,
:32:11. > :32:15.in my view, are much less important than that, particularly at the
:32:15. > :32:20.moment. What Britain has to watch is to make sure that any
:32:20. > :32:23.developments with the political or economic, do not jeopardise its
:32:23. > :32:27.central position of the kind that I have described. It is interesting,
:32:27. > :32:30.Romano Prodi, that now we have a situation where, as you heard
:32:30. > :32:34.earlier, that actually France maybe the ones who have trouble in their
:32:34. > :32:40.leading position in Europe, and actually de facto what we have is a
:32:40. > :32:50.kind of capital of Europe, that is Berlin. What do you think of that?
:32:50. > :32:52.
:32:52. > :32:56.Well, first of all, to reply to what Leon said before. If you go on
:32:56. > :33:04.with the reinforced co-operation, and reinforce and reinforce, and
:33:04. > :33:11.the UK always stays out, of course, it loses the central power in
:33:11. > :33:15.Europe. Certainly it must protect the Common Market, everything, but,
:33:15. > :33:21.there will be an increased distance between the leading European
:33:21. > :33:24.countries, and the reluctant European countries. This is taken
:33:24. > :33:29.for granted. They will be left behind. What do you make of the
:33:29. > :33:34.idea that actually the force to be reckoned with now is Germany, and
:33:34. > :33:42.that Angela Merkel really leads the way? Well, look, I have to be very
:33:42. > :33:50.frank and clear, by far, it is completely changed, Europe, since
:33:50. > :33:58.20 years ago. Now Germany is absolutely leading. No doubt about
:33:58. > :34:04.that. My point is that maybe the Germans think they are too big for
:34:04. > :34:11.Europe. That is a very good point. Both of those points, the de facto
:34:11. > :34:14.capital of Europe is Berlin now? The leading country economically in
:34:14. > :34:17.the eurozone is, of course, Germany, there is no question about that.
:34:17. > :34:22.The important thing to remember from the British point of view, is
:34:22. > :34:25.the British Government, George Osborne has said, that he actually
:34:25. > :34:31.encourages and wants there to be greater fiscal integration in the
:34:31. > :34:35.eurozone, and he wants to do that, because he thinks that is in the
:34:35. > :34:39.interests of Britain, eventhough Britain is not participant in it.
:34:39. > :34:43.That's very important. Thank you very much. Before we go on to the
:34:43. > :34:48.next item, let's do the papers on this. The Financial Times has China
:34:48. > :34:58.set to aid the Europe bailout. This is the one trillion euro bailout
:34:58. > :34:59.
:34:59. > :35:09.package. The Mail has Osbourne clawing back EU powers.
:35:09. > :35:12.
:35:13. > :35:16.Guardian All week Newsnight has been looking at the possible
:35:16. > :35:20.implications of a growing world population. Tonight we examine the
:35:20. > :35:26.foods of the future. They are nutritious, protein-rich and easy
:35:26. > :35:34.to farm. Were l we soon all be eating inglrb will we soon all be
:35:34. > :35:39.eating infects. Joining me is the Colombian ambassador, Mauricio
:35:39. > :35:44.Rodriguez, who has brought some Colombian delicacies.
:35:44. > :35:54.And we have our chef cooking up locusts and mealworms. First we
:35:54. > :35:55.
:35:55. > :36:00.Look at any restaurant menu and it appears to offer a world of choice.
:36:00. > :36:05.Lamb, pork, chicken, fish, but, actually, we humans are very
:36:05. > :36:15.conservative when it comes to food. We eat just a handful of the more
:36:15. > :36:20.than seven million animals species reckoned to exist on the planet.
:36:20. > :36:25.But is it time for us to get a bit more adventurous. There is a
:36:25. > :36:31.growing movement arguing the world needs to eat more of these.
:36:31. > :36:36.Insects. Daniel is the head chef here, what have you on offer today?
:36:36. > :36:43.Here we are cooking locusts and crickets in a mixture of chilli and
:36:44. > :36:49.south eastern flavours, we serve them on top of a salad, and call it
:36:49. > :36:53."bug salad". Is it popular? It is. This is a locust, let me try that.
:36:53. > :36:58.It is a rather unusual salad ingredient, some people would find
:36:58. > :37:03.the prospect of eating this little chap disgusting. I will give it a
:37:03. > :37:13.go. There is a nice crunch. But it is more of a texture than a flavour,
:37:13. > :37:15.
:37:15. > :37:19.but there is a lovely chilli sauce there. That's not bad.
:37:19. > :37:29.# Insects # See them crawling
:37:29. > :37:29.
:37:30. > :37:34.# Insects The Netherlands is leading the way
:37:34. > :37:40.in insect-eating research. At this farm they produce mealworms for man
:37:40. > :37:45.maland human consumption. - animal and human consumption. Is
:37:45. > :37:50.it good being an insect farmer? think it is rather efficient
:37:50. > :37:55.farming. They love to live together in a box upon each other. It is no
:37:55. > :38:00.problem. They love to be crowded together? In the darkness. It is
:38:00. > :38:08.humane. It is their natural behaviour. These are the beatles
:38:08. > :38:12.are the mealworms. These beatles will give each 150 eggs. For a kilo
:38:13. > :38:19.of feed, ten kilos of feed, how much insect do you get? Ten loyal
:38:19. > :38:25.co-of feed will give you eight kilos of mealworms. How does it
:38:25. > :38:31.compare with other animals? Pigs need ten kilos of feed to get three
:38:31. > :38:35.kilos of pig. These are the mealworms? These are the giant
:38:35. > :38:44.mealworms. They will not bite? bit. You will get used to that. You
:38:44. > :38:50.will not die of them. What do these eat? Carrots and chaff. From wheat
:38:50. > :38:55.They eat waste products? In nature they clean up the mess so, they can
:38:55. > :39:01.eat anything. You feeling peckish? If you are, you are in for a
:39:01. > :39:05.nutritional feast, the UN's Food and Agriculture Organisation says
:39:05. > :39:12.insect protein content is comparable to meat, and many
:39:12. > :39:22.contain amenoacids, fibre, in the he can sow skeleton, and iron,
:39:22. > :39:25.calcium and B vitamins. This is an ent tomorrowologyist who is keen to
:39:25. > :39:32.- entomologist who wants to encourage us to eat the insects he
:39:32. > :39:38.has made his life's work. He says it is less risky than eating other
:39:38. > :39:42.animals. Insecretarys are much less related to humans, so diseases that
:39:42. > :39:48.insects have don't jump easily to humans, that is different from pigs
:39:48. > :39:52.and cows. What has persuaded the European Union to offer a grant of
:39:53. > :39:57.2.5 million euros to research insects as food, and the UN to
:39:57. > :40:01.advocate their consumption, are arguments that farming insects is
:40:01. > :40:04.more environmentally friendly. Insects produce much less
:40:04. > :40:11.greenhouse gases than pigs or cattle. How much better are they?
:40:11. > :40:15.If you compare pigs to locusts then lok kuss are doing - locusts are
:40:15. > :40:19.doing eight-times better. Chickens are better than pigs, if you had to
:40:19. > :40:26.choose between chicken and insect meat, you will always choose the
:40:26. > :40:30.chicken? Why. Because chicken is delicious? Why are insects not
:40:30. > :40:36.delicious. These are bees, poached in their own honey, I think that is
:40:36. > :40:41.a little bit mean? I actually serve these on creme brulee. Crunch,
:40:41. > :40:44.strong taste of honey, also another flavour. It tends to be menthol
:40:45. > :40:53.coming through, that is the bee, not the honey.
:40:53. > :41:00.There is a texture of hair! The 12 ounce steak is 1,000 lok cuss kuss
:41:00. > :41:07.to get the - lock kuss to get the same amount of protein. Can you
:41:07. > :41:13.imagine that. I can't, but some clever person will come up with a
:41:13. > :41:20.protein powder based on locusts. It will be called "earth bounty" or
:41:20. > :41:25.something, they will be clever with it. The disgust is huge in western
:41:25. > :41:28.societies, you think by calling it another name that will work.
:41:28. > :41:31.can't underestimate what will happen to food prices across the
:41:31. > :41:34.western world in the next 20 years, there is every evidence they could
:41:34. > :41:39.double or triple. When things like that start happening other
:41:40. > :41:43.considerations will go by the by. It won't be the plate of 1,000
:41:43. > :41:47.locusts to replace the sirloin steak, it will be the very clever
:41:47. > :41:52.powder that will rep Tate the meat proteins, put it in a cheap sausage
:41:52. > :42:02.and you are laughing. Can western revulsion to eating insects be
:42:02. > :42:04.
:42:04. > :42:10.overcome? Time for a very unscientific Newsnight experiment.
:42:10. > :42:18.We dressed the producer, Ian, in a fly suit, we gave him a tray of
:42:18. > :42:28.taste snacks and we took to the streets. Would you like a snack?
:42:28. > :42:34.Not particularly. Nein. That is quite nice. You will have a
:42:34. > :42:44.chocolate scorpion. Gone for a locust. What about a quick bee
:42:44. > :42:48.before you go. There you go. There is a nice little crunchy flavour,
:42:48. > :42:54.the chilli sauce coming through. Yeah. You quite like the insects
:42:54. > :43:01.now. I won't try that. You have just had a bee, scorpion and locust,
:43:01. > :43:07.and you are turning your nose up at a mealworm! People had more of an
:43:07. > :43:11.appetite than I expected. Maybe we will all be eating the insect
:43:11. > :43:15.sasauges afterall. Stefan, I know you are finishing off a dish at the
:43:15. > :43:18.moment. Ambassador you feel no revulsion at all about insects. Is
:43:18. > :43:23.that simply because that you find them tasty, or because they are
:43:23. > :43:26.going to be a good source of protein in an ever-demanding world.
:43:26. > :43:32.Insects are not only the food of the future, they are already the
:43:32. > :43:42.food of the present. Let me show you an example. These are apbts.
:43:42. > :43:43.
:43:43. > :43:49.These are big-ass? Big-bottomed, diplomatic language. They sum from
:43:49. > :43:56.Santander. Are they treated? Yes, of course. They are soaked in salty
:43:56. > :44:02.water and then they are roasted. They taste salty and crunchy.
:44:02. > :44:09.are OK. They are some of the best ones. These are a delicacy. They
:44:09. > :44:13.are very much in demand. We sell over 1,000 packages, small packages
:44:13. > :44:17.of ants in London, every month. Stefan, you are cooking with this
:44:17. > :44:22.for a reason, you also have a story to tell about the things we eat
:44:22. > :44:25.already and don't realise we are eating insects. These are seen as
:44:25. > :44:33.gimmick foods in Britain, I'm hoping this will change. We eat a
:44:33. > :44:43.lot of the stuff any way. A plate of mealworms there. Far more kilos
:44:43. > :44:52.of actual food. Very resource food. We eat a lot of those already.
:44:52. > :44:58.will wash that down there. I just have ant on my teeth! This is bee
:44:58. > :45:08.vomit and honey. Have one of these marshmallows, have a try of it, it
:45:08. > :45:08.
:45:08. > :45:12.is an ordinary marshmallow, but made it these fellas, they are
:45:12. > :45:19.cochienelle bugs, they are these little fellas, grind them down and
:45:19. > :45:24.see what happens to add them to water. This has honey, corriander,
:45:24. > :45:28.and what pug? Locust, mealworms and crickets. I would say it is a
:45:28. > :45:31.delicious way to eat this stuff. The thing is, do you notice the
:45:31. > :45:36.fact it is anything more than crunch, do you get a flavour from
:45:36. > :45:42.the insect? I would say you do. A huge amount of protein, when it
:45:42. > :45:46.caramelises it you get the effect. They have a lot of protein but much
:45:46. > :45:51.less fat and much less cholesterol. Don't you need to eat an awful lot
:45:51. > :45:57.of insects to get the same protein from chicken and meat, you would
:45:57. > :46:01.have to eat a pile? Not really, according experts, you get the same
:46:01. > :46:05.amount as a piece of steak, and you get much less fat, they are
:46:05. > :46:09.recommending to eat this. The production is much better for the
:46:09. > :46:17.world, because it is environmentally friendly. These
:46:17. > :46:22.ants don't need fertilisers, pesticides, fungicides, and they
:46:22. > :46:32.don't produce methane. What do you drink with this? For me I prefer
:46:32. > :46:35.
:46:35. > :46:41.beer, it is the perfect drink for ants, snacks. They are are they?
:46:41. > :46:47.They are salty snackss. These ones are cooked? They are already cooked
:46:47. > :46:54.and roasted. They are very nice. They are really good. These are in
:46:54. > :46:59.a bit of salt and curry. These are delicacies, eaten on a night out in
:46:59. > :47:03.a cocktail bar. Will they become a food staple in this country. Are we
:47:03. > :47:06.really going to be eating insects? I think so, there are no other
:47:06. > :47:09.alternatives. It is impossible to supply food to the growing
:47:09. > :47:13.population, the type of food we are eating today, we need to look at
:47:13. > :47:18.other options, this is a very healthy option for all of us.
:47:19. > :47:27.hope you can manage to have some insects for the weekend, some big-
:47:27. > :47:32.bottomed ants, from all of us tonight, from Newsnight, good night.
:47:32. > :47:35.# Hey good looking # What you got cooking
:47:35. > :47:39.Mu how's about cooking something up with me
:47:39. > :47:49.# Hey sweet baby # Don't you think maybe
:47:49. > :47:52.
:47:52. > :47:55.# We could find us It is the season of mists and
:47:55. > :47:59.mellow fruitfulness. Nasty fog patches in the morning across the
:47:59. > :48:03.Midlands and Bristol. Be aware if you are on the move first thing.
:48:03. > :48:06.Most of us will have a lovely day with a lot of sunshine out there.
:48:06. > :48:11.Temperatures nothing spectacular, in the sunshine light winds across
:48:11. > :48:14.the heart of England, feeling pleasant once the fog is cleared.
:48:14. > :48:19.In the south-east it will stay stubborn and cloudy with the odd
:48:19. > :48:22.spot of rain. For the south west in stark contrast to Thursday, we have
:48:22. > :48:28.lost the rain clouds and we have sunshine, a super afternoon for
:48:28. > :48:31.much of the South-West and Wales. A little bit of fair weather cloud,
:48:31. > :48:35.temperatures 11-13 degrees. For Northern Ireland too it will be a
:48:35. > :48:38.bright and breezy, the rain clouds holding off. They will arrive
:48:38. > :48:41.during the course of the evening, knocking on the door of the
:48:41. > :48:45.Hebrides. Most of Scotland having a fine day, the best of the sunshine
:48:45. > :48:49.further south and east. Looking ahead to the weekend, the more
:48:49. > :48:53.northern parts of the UK will turn cloudier with outbreaks of rain.
:48:53. > :48:57.Particularly for the west of Scotland and Northern Ireland.
:48:57. > :49:02.Southwards it stays dry. Cloud coming and going, some sunshine
:49:02. > :49:05.warming up nicely as we go through the weekend, reporting some