:00:10. > :00:14.Tonight, as we come on air, the leaders of the eurozone are putting
:00:14. > :00:20.extreme pressure on Greece to save the Euro-bailout and the euro
:00:20. > :00:27.itself. The Greek Prime Minister is summoned to meet the French
:00:27. > :00:31.President and the German Chancellor. Here at the G20 the Greeks have
:00:31. > :00:39.been told, fine, have your referendum, but you won't get any
:00:39. > :00:42.bailout money until that's over. The three-day debate on a no
:00:42. > :00:48.confidence motion in Mr Papandreou's Government has started
:00:48. > :00:55.here without him. So just as soon as he can extricate himself from
:00:55. > :01:01.that French embroillio, he will have to dash back to at thens to
:01:01. > :01:09.fight for his political life. will speak to the European
:01:09. > :01:13.council's President's righthand man. How similar are the economic
:01:14. > :01:16.problems of now to the Great Depression. The new head of the
:01:16. > :01:26.Press Complaints Commission will tell us why his job is still worth
:01:26. > :01:31.doing. And : # It's the end of the world as we
:01:31. > :01:40.know tl Michael Stipe and Mike Mills on why the band REM split,
:01:40. > :01:43.and why music and politics mix. Good evening, it is probably one of
:01:43. > :01:46.the most difficult evenings of George Papandreou's political life.
:01:46. > :01:49.This is the way it was supposed to go. Last week the eurozone leaders
:01:49. > :01:53.finally saved the currency. This week the biggest economies on earth,
:01:53. > :01:57.and the G20 would need in Cannes and use that as a springboard to
:01:57. > :02:00.push the worldwide recovery forward. It was a great script until it was
:02:00. > :02:06.thrown into the dustbin by Mr Papandreou's decision to hold a
:02:06. > :02:09.referendum on the terms of their bailout. We begin tonight in Cannes,
:02:09. > :02:16.where Greece's Prime Minister has been called in to see the head
:02:16. > :02:19.teachers for a real caning. The press conference with Mr
:02:19. > :02:24.Sarkozy and Mrs Merkel is still going on. It is not often you get
:02:24. > :02:27.at one of these conferences a real and serious action. But they are
:02:27. > :02:32.coming thick and fast in the last five minutes.
:02:32. > :02:37.The EU has formally suspended the eight billion debt repayment due to
:02:37. > :02:41.Greece that was agreed last week. Mrs Merkel said that there had been
:02:41. > :02:45.a big change in the psychology. A dramatic change in the psychology
:02:45. > :02:50.of the situation, because Greece called this referendum. She has
:02:50. > :02:53.accused the Greek Prime Minister of playing poker, and said that the
:02:53. > :02:58.Greek referendum question should be about in or out of the euro.
:02:58. > :03:03.Something that the Greeks themselves are not, of course, keen
:03:03. > :03:07.on. China has said that it's not interested in lending to the big
:03:07. > :03:10.bailout fund, the one trillion euro EFSF, that is going to be aimed at
:03:10. > :03:19.Italy. It is not interested, because with all this uncertainty
:03:19. > :03:23.around who can value the risk, who can base a calculation of risk on
:03:23. > :03:27.lending that kind of money. That is nice work for a country that wasn't
:03:27. > :03:32.even invited to the Cannes G20 country. Greece, too small to be in
:03:32. > :03:36.the top 20. The mood here, of course is very tense. It is still
:03:36. > :03:39.on going tonight. I think the reactions are even now filtering
:03:39. > :03:43.out and will do throughout the programme. Overall, there is a
:03:43. > :03:47.feeling that the Greek situation can be contained. Because the
:03:47. > :03:50.bigger situation with Italy, Spain and the rest of the world, does
:03:50. > :03:53.beckon the attention of these leaders, afterall the world could
:03:54. > :04:00.be on the brink of a double-dip recession. That is what they worry
:04:00. > :04:03.about. All today, ins and outs here at Cannes, with world leaders being
:04:03. > :04:09.told, get your act together they are under pressure to raise their
:04:09. > :04:13.game. In diplomatic speak, they are
:04:13. > :04:18.called Mer kozy, the two heads of state at the heart of Europe. When
:04:18. > :04:22.they met the Greek Prime Minister tonight, an unexpected invitey, it
:04:22. > :04:32.was not very cosy, because the Greek PM has basically spoiled
:04:32. > :04:35.their party. Although Cannes is in full lock down mode, on the luxury
:04:35. > :04:40.coastline it is some how hard to remember the world is in crisis.
:04:40. > :04:49.They chose this place to focus on the big issues, growth, currencies,
:04:49. > :04:54.the reregulation of the world. The summit's bim toll, 20 flags wrapped
:04:54. > :04:57.- symbol, 20 flags wrapped around something sweet, but Greece has
:04:58. > :05:03.soured things. Last Thursday Greece was offered a deal to write off 100
:05:03. > :05:07.billion euros worth of debt, with banks agreeing to take 50% losses.
:05:07. > :05:11.The price, years of austerity and control of economic policy handed
:05:11. > :05:15.to outside experts. But Greece needs to roll over 20 billion euros
:05:15. > :05:20.worth of existing debt by the end of January. With the referendum,
:05:20. > :05:26.nobody's sure who will lend. In the French parliament the response was
:05:26. > :05:30.blunt. TRANSLATION: You can't be in Europe to benefit from its
:05:30. > :05:36.solidarity, and aside from Europe to escape the discipline that every
:05:36. > :05:41.nation must consent to. Meanwhile, in Italy, there was an emergency
:05:41. > :05:44.cabinet meeting tonight, because the bond markets are signals danger.
:05:45. > :05:49.We knew the interest rates on Italy's long-term debts were
:05:49. > :05:53.getting frightening, but look at the interest rates on 12-month
:05:53. > :06:00.loans, usually below 1%. This is what's happened, it has spiked now
:06:00. > :06:04.above 5% this week. And some fear that's a signal the Italian crisis
:06:04. > :06:07.will imminently spill over into the banks, because this is the kind of
:06:07. > :06:11.debts banks use for short-term business. Americans are already
:06:11. > :06:15.telling Mr Berlusconi that you will not be able to sell your bonds for
:06:15. > :06:18.the next few weeks or months at the punitive interest rates, they are
:06:19. > :06:22.demanding, they don't trust you. Mr Berlusconi is enough of a business
:06:22. > :06:31.person to know what that signal means. Then when his closest
:06:31. > :06:35.friends, here at the G20, and in the G, say look, you have got to
:06:35. > :06:39.promise and do grb G7, you can't just promise it, you have to do it
:06:39. > :06:43.back home, and the young people have to have jobs, that is the only
:06:43. > :06:49.way to grow your economy. I think Berlusconi will finally bite the
:06:49. > :06:58.bullet and do it. It is hard to see it here amid the luxury of the
:06:58. > :07:04.Riviera, but the world recovery is slowing, growth is down, and debt
:07:04. > :07:09.up. Jose Angel Gurria, who runs the influential think-tank, OED, and
:07:09. > :07:14.who will be in the talks, thinks it is crucial to sort out Greece and
:07:14. > :07:20.then move on. Greece is unique in terms of the problems. We should
:07:20. > :07:24.ring-fence it, referendum or not. We should really stop the contagion
:07:24. > :07:28.and build the big firework. That might mean an even bigger bailout
:07:28. > :07:32.to Greece, just to ring-fence it completely, otherwise why are we
:07:32. > :07:37.sitting here worrying about it after a third of the debt is
:07:37. > :07:44.written off already? Because the original sin was that we said, in
:07:44. > :07:47.the beginning, two years ago, the future of Europe and the future of
:07:47. > :07:56.the euro, is linked to Greece. Whatever happens to Greece happens
:07:56. > :08:00.to all of us. That was obviously a mistake. Why is it that at summit
:08:00. > :08:04.after summit, we pass resolutions, we pass action plans, but we never
:08:04. > :08:08.see this structural question addressed? After spending a lot in
:08:08. > :08:14.order to get out of the recession, into a feeble recovery, where did
:08:14. > :08:20.that leave us? With huge deficits. And huge accumulated debt. More
:08:20. > :08:24.than 100% debt to GDP in the OECD on average. And you still have 10%
:08:24. > :08:29.unemployment, and you still have 20% unemployment of the youth, or
:08:29. > :08:33.30% or 40%, you still have people all over the world occupying the
:08:33. > :08:37.streets, occupying Wall Street or the City. They have pint haven't
:08:37. > :08:40.they? Of course they have a point. - They have a point, haven't they?
:08:40. > :08:43.Of course they have a point. That means no matter how tight the
:08:43. > :08:53.budgets are we have to leave space for them and the things that are
:08:53. > :08:57.the seedz of the future growth. the Greek crisis has centralised
:08:57. > :09:01.the problem, the rest of the world has enough of things that don't
:09:01. > :09:05.deliver growth. They have started to punish politics that don't
:09:05. > :09:08.deliver it. Mr Papandreou's arrival here signals how fast things are
:09:08. > :09:11.develop anything this crisis. Six months ago the arriving leaders
:09:11. > :09:14.could have looked at Greece and said that is what you don't want to
:09:14. > :09:19.happen. That is what happens when you lose control of your sovereign
:09:19. > :09:25.debt. Now they look at Papandreou and think, that is what happens if
:09:25. > :09:28.you lose control of your streets. And now, as a result of his
:09:28. > :09:36.referendum call, Mr Papandreou seems to have lost control of the
:09:36. > :09:40.very bailout he thought had saved him. I'm just noticing as you were
:09:40. > :09:45.watching that report, that the Merkel press conference in Cannes,
:09:45. > :09:50.Mrs Merkel is saying that the Greek referendum must ask does Greece
:09:50. > :09:54.wish to be in the eurozone area. We will pursue that in just a moment.
:09:54. > :09:59.The other part of the story is in Greece itself, where Mr
:09:59. > :10:03.Papandreou's referendum could lead to harder times ahead. There is
:10:03. > :10:07.really intense pressure on the Greeks, Mrs Merkel saying they are
:10:07. > :10:10.playing poker, and effectively saying any referendum is an in-out
:10:10. > :10:14.referendum? Yes, they couldn't be under any greater pressure than
:10:14. > :10:19.they are already. Mr Papandreou's party fraying under the strain,
:10:19. > :10:22.ministers going sick, all the rest of it. Of course we don't have a
:10:22. > :10:27.response at the moment to what's just been said in Cannes. But it is
:10:27. > :10:30.interesting that earlier today, Mr Papandreou's spokesman said quite
:10:30. > :10:34.specifically, that this would not be a referendum on the euro in or
:10:34. > :10:38.out. It was a referendum on the bailout package, and whether the
:10:38. > :10:42.people were prepared to accept it and implicitly the sacrifices it
:10:42. > :10:45.involves. It is interesting that they seem to have tried to head off
:10:45. > :10:49.that line, before even he arrived at that time dinner in Cannes. The
:10:49. > :10:53.other thing one can't help but think, is in the language of the
:10:53. > :10:58.accusation from Chancellor Merkel tonight, of playing poker, that
:10:58. > :11:01.there may be some indication of her own tactics in this supremely
:11:01. > :11:05.difficult moment. Perhaps they are all playing poker, but perhaps it
:11:05. > :11:09.is with other people's money. I notice that President Sarkozy is
:11:09. > :11:12.saying we cannot spend European tax-payers' money if Greece doesn't
:11:12. > :11:16.follow Brussels' agreement to the letter. How worried do you think
:11:16. > :11:24.the people are in Greece that they are going to be seriously punished
:11:24. > :11:28.for this referendum? There is this question of the eight billion euros,
:11:28. > :11:33.that was supposed to be made available to them in mid-November,
:11:33. > :11:38.to get them through the cry sifs trying to keep the economy afloat
:11:38. > :11:41.here. - crisis of trying to keep the economy afloat here. This could
:11:41. > :11:44.be the element of poker from Chancellor Merkel, is it a credible
:11:44. > :11:48.threat to withdraw this money. This evening they seem to be saying in
:11:48. > :11:51.Cannes, yes it is, this is not a deal you can pull apart and take
:11:51. > :11:55.the candy and then throw the rest of it open to the referendum. But
:11:55. > :12:00.many people in Greece will reflect that if that money is taken away,
:12:00. > :12:04.just a week or two, potentially, before Greeks go to the polls, that
:12:04. > :12:07.could have a disastrous effect on the course of the euro, and it
:12:07. > :12:11.could actually trigger the implosion that France and Germany
:12:11. > :12:15.are so desperate to avoid. So it will be fascinating to see whether
:12:15. > :12:20.they really are in ernest about that threat, or whether some kind
:12:20. > :12:24.of formula is put together, simply to get Greece through the crisis
:12:24. > :12:30.that leads up to the referendum, assuming it still happens. Thank
:12:30. > :12:35.you very much. The Greek decision to hold a
:12:35. > :12:41.referendum on the bailout package, and the implications, are being
:12:41. > :12:49.absorbed in every European capital. Joining me live is Alvaro Santos
:12:49. > :12:52.Pereira, the Portuguese Finance Minister, and Richard Corbett. How
:12:52. > :12:59.irritated are you in the EU leadership that Mr Papandreou has
:12:59. > :13:03.made you look like fools? Well, on the one hand the EU, as you know is
:13:03. > :13:06.not a centralised powerful authority, it is a union of
:13:06. > :13:10.democracies, and democratic procedures in each member-state
:13:10. > :13:15.have to be respected. But on the other hand, last week, when this
:13:15. > :13:18.package was put together, that everybody thought was a key turning
:13:18. > :13:23.point, there was no indication at that point from the Greek side that
:13:23. > :13:29.this may well be put to a referendum. Which, whatever its
:13:29. > :13:32.merits, prolongs the uncertainty for a long period of time. Indeed.
:13:32. > :13:36.Triggering a return to market volatility, which is undermining
:13:36. > :13:40.the whole process. Indeed, but it also shows the profound weakness at
:13:40. > :13:46.the very heart of the EU, when you have a deal which is unravelled
:13:46. > :13:50.within five days? Well, as I said, the EU is not a dictatorship, it is
:13:50. > :13:54.a uefpb democracies, you have to work with - a union of demok
:13:54. > :14:00.circumstance you have to work with the - democracies, and you have to
:14:00. > :14:04.work with the countries in that. If Greece so chooses to put this deal
:14:04. > :14:08.to a referendum it can. But you can also understand how others have
:14:08. > :14:13.reacted to that. They thought there was a deal that could be enacted
:14:13. > :14:17.quickly, that would already calm the markets, the initial effect was
:14:17. > :14:19.very beneficial, it was well received, this puts that in
:14:19. > :14:27.jeopardy. You can understand the reaction from other member states
:14:27. > :14:32.to that decision. Do you now see, in the words of Mrs Merkel, that
:14:32. > :14:38.has to be an in-out of the eurozone decision for Greece, however they
:14:39. > :14:43.word it, that is what is at stake here for Greece? It is indeed
:14:43. > :14:48.difficult to understand what a "no" would actually mean. Would they be
:14:48. > :14:52.saying, no, this loan is not big enough, we want a bigger loan to
:14:52. > :15:00.help us turn the corner, or are they saying we don't want any loan
:15:00. > :15:04.at all, we can manage wout without assistance from the rest of the
:15:04. > :15:07.Euro-- - eurozone. It is an odd situation to have a referendum the
:15:07. > :15:14.leadership, at least, thinks there is only one possible answer. But
:15:14. > :15:18.the people may well say we don't actually like that answer. But from
:15:18. > :15:25.different perspectives, you won't have an answer to what they want
:15:25. > :15:29.instead. Would you contrue this as an in-out - cons true this as an
:15:29. > :15:39.in-out vote s that how you see it? The Greek Government will formulate
:15:39. > :15:48.
:15:48. > :15:54.the question. You See the knock-on effect of a potential no-vote might
:15:54. > :15:59.bring the question of Greece leaving the euro might be possible.
:15:59. > :16:04.How do you view this Greek referendum? Good evening, for us
:16:04. > :16:12.the Greek referendum obviously increases the uncertainty, and
:16:12. > :16:16.increases volatility. On our part what we see is we are extremely
:16:16. > :16:21.strongly committed to reform, we are strongly committed to fiscal
:16:21. > :16:27.consolidation, we believe in a reform agenda that would bring,
:16:27. > :16:31.would make Portugal a country that is more business-friendly, more
:16:31. > :16:37.business orientated, with better labour laws, with new competition
:16:37. > :16:40.laws just approved and under public consultation. It could all be blown
:16:40. > :16:45.sideways? You may be doing all the right things, and with the angels
:16:45. > :16:51.on this but the Greek decision means months of uncertainty for you
:16:51. > :16:56.and the people of Portugal. The Greek decision increases the
:16:56. > :17:02.uncertainty, on our part, what we can do is show the world we are
:17:02. > :17:06.doing our best and doing whatever we can to maintain dialogue with
:17:06. > :17:10.the trade unions, we have maintained also a peaceful
:17:10. > :17:16.environment in Portugal, together we have had a very strong reform
:17:16. > :17:20.agenda. That makes sure fiscal consolidation is made possible,
:17:20. > :17:25.together with a growth agenda that is bringing large reforms to
:17:25. > :17:30.Portugal, unequivocal reforms. suggesting, whatever you do, your
:17:30. > :17:34.fate is in the hands of ten million people in Greece. It has nothing to
:17:34. > :17:38.do with these greet reforms you may be doing. It has to - great reforms
:17:38. > :17:44.you may be doing. It is to do with the Greek referendum going ahead
:17:44. > :17:49.and whether it blows up the euro? We strongly believe by doing the
:17:49. > :17:55.reform agenda we are doing, we will be able to stop any contagion that
:17:55. > :17:59.might come about with the Greek situation. Even if they vote no.
:17:59. > :18:02.strongly believe. For us it doesn't make sense to get out of the euro,
:18:02. > :18:06.for several reasons, including the fact that our exports are growing
:18:06. > :18:11.at 9% a year, they have been growing for quite a while, in the
:18:12. > :18:18.last three or four years they are growing very well. So, for us the
:18:18. > :18:23.euro, the impact of the euro has past passed, our exports are
:18:23. > :18:27.getting stronger and the economy getting more stronger, it doesn't
:18:27. > :18:31.make sense at all for us. Bringing in Mr Corbett again. You can
:18:31. > :18:35.imagine if you were in the Chinese delegation, they will look at this
:18:35. > :18:40.and think it is a complete shambles and not putting the Chinese people
:18:40. > :18:44.as money in anything to do with Europe? I think that - the Chinese
:18:44. > :18:47.people's money in anything to do with Europe? I think you have to
:18:47. > :18:52.look much further than Greece. The package agreed last week was in
:18:52. > :18:57.part about Greece, but also in part about building firewalls so make
:18:57. > :19:03.sure there is no contagion from Greece to other states in the euro,
:19:03. > :19:06.or the rest of the European Union. The increased capitalisation of
:19:06. > :19:11.banks, increasing the fire power of the so-called bailout fund. That is
:19:11. > :19:16.all designed to make sure there is no contagion from Greece. If you
:19:16. > :19:19.were China you wouldn't put money into it? Those aspects are not
:19:19. > :19:22.subject to the referendum in Greece, they still stand as part of the
:19:22. > :19:25.deal. They are still there and should reassure potential investors
:19:25. > :19:30.from other parts of the world. Thank you very much.
:19:30. > :19:33.Let's go back to Paul Mason in Cannes, who has not just been
:19:33. > :19:37.following tonight's events ahead of the G20 Summit tomorrow, but also
:19:37. > :19:43.looking at some of the lessons of history. We thought two years ago
:19:43. > :19:48.we had avoided a repeat of the Great Depression. We spent
:19:48. > :19:52.thrillions of digging ourselves out of the Lehman Brothers - trillions
:19:52. > :19:56.digging ourselves out of the Liam man brothers crisis. Required
:19:57. > :20:02.reading, the economic history of the early 1930s, that period is the
:20:02. > :20:06.period that shows us what happens if the - if during the crisis you
:20:06. > :20:11.enter, as we have done tonight, the finger-pointing stage, the blaming
:20:11. > :20:15.stage, and the competitive exit out of the crisis stage. I have been
:20:15. > :20:25.looking at what the parallels are, what we can learn, and how we can
:20:25. > :20:27.
:20:27. > :20:30.avoid repeating it. The depression of the 1930s began in Wall Street,
:20:30. > :20:35.with the share price crash. How did it get from Wall Street to the rest
:20:35. > :20:39.of the world. That is the story of a cross-border
:20:39. > :20:44.banking crisis, social unrest, countries reneging on their debts,
:20:44. > :20:48.and the breakdown of an international currency system. If
:20:48. > :20:53.that sounds familiar, it should. What is haunting the world's
:20:53. > :20:59.leaders, as they prepare for the G20 Summit is a repeat of the early
:20:59. > :21:01.1930s. In the 1930s there was a great
:21:01. > :21:05.fracturing of globalisation. So countries which had been used to
:21:05. > :21:08.co-operating with each other in a number of ways, all took to doing
:21:08. > :21:16.their own thing. They took to doing their own thing politically and
:21:16. > :21:21.economically. The world that collapsed in 1931
:21:21. > :21:27.was a glilt glittering, ultra modern world, the economic recovery
:21:27. > :21:31.of the 1920s had produced Art Deco, luxury for the masses, and for the
:21:31. > :21:39.elite, as with this family and its purpose-built deco mansion, what
:21:39. > :21:42.could possibly go wrong. The 1920s had seen rapid
:21:42. > :21:46.technological advance, when the crisis started it looked like just
:21:46. > :21:51.a blip, what had produced all this was a global system of trade and
:21:51. > :21:54.currencies based on gold. But in the fight to safe that system, they
:21:54. > :21:58.would destroy almost everything else. One of the things that
:21:59. > :22:03.happened in the 1930s was the very mechanism which people focused on,
:22:03. > :22:08.which they thought would promote globalisation, actually was a
:22:08. > :22:13.contributor to its end. The gold standard was a system of
:22:13. > :22:17.fixed exchange rates that obliged Governments to balance their books
:22:17. > :22:27.long-term. But in the worst-hit countries, once the downturn
:22:27. > :22:28.
:22:28. > :22:31.started, sticking to gold forced Governments to make austerity worse.
:22:31. > :22:35.Today some worry what happened with the gold standard could happen with
:22:35. > :22:40.the euro, here again, adherence to the rules is forcing some countries
:22:41. > :22:43.to impose harsh austerity. And even as the streets erupt, the European
:22:43. > :22:48.political class has convinced itself that nobody can leave the
:22:48. > :22:52.euro. The thing about Europe is the
:22:52. > :22:56.single currency, and the way that all these 17 countries are tied
:22:56. > :22:59.together by one exchange rate. The parallel with the early 1930s is
:22:59. > :23:08.clearly the gold standard, where some countries believe that the
:23:08. > :23:12.gold standard was the basis for prosperity. The reality was that it
:23:12. > :23:19.was imposing enormous deflation on some countries and the UK was one
:23:19. > :23:25.of the first to break-away. Britain's exit from gold in 1931
:23:25. > :23:28.forms a case study in how events can confound a currency peg. First,
:23:28. > :23:35.the Labour Government collapsed over the levels of austerity
:23:35. > :23:39.required to stay on gold. And then, amid defence cuts, the Royal Navy
:23:39. > :23:42.mutinyed. Those particular spending cuts led to parts of the Royal Navy,
:23:42. > :23:50.fearing that they would have very large salary cuts, and there was a
:23:50. > :23:54.mutiny, which included the flagship of the Navy, The Hood, this, in
:23:54. > :23:57.mid-September 1931 triggered a very widespread panic, people thought
:23:57. > :24:00.there might be a coup and all kinds of things, and international
:24:00. > :24:04.investors really panicked in respect of the UK. And the
:24:04. > :24:07.Government quite soon after gave up on the attempt to hold the gold
:24:07. > :24:12.standard. When Britain came off gold, the establishment were so
:24:12. > :24:17.shocked that one former Labour minister said, we didn't know you
:24:17. > :24:21.could do that. Germany and Japan came off gold in the same year, and
:24:21. > :24:27.the industrial output showed those who ran for the exits first,
:24:27. > :24:31.recovered first. The depression of the 1930s was felt worst by those
:24:31. > :24:37.countries that were last to abandon their commitment to the global
:24:37. > :24:41.system. America, and France. Of course, we know what happened,
:24:41. > :24:45.within a decade the big powers were engaged in trade wars, currency
:24:45. > :24:49.wars, land grabs, and ultimately military conflict.
:24:49. > :24:56.And the problem today is you can just see the beginnings of some of
:24:56. > :25:01.that. When the USA decided on a second
:25:01. > :25:05.round of qeesing, QE-2, the result was to boost inflation in the
:25:05. > :25:11.rapidly developing countries like bra still. Bra still's Finance
:25:11. > :25:17.Minister called it economic war and re- Brazil's Finance Minister
:25:17. > :25:21.called it economic war. Japan, fearing its exports would be hit by
:25:21. > :25:26.a weaker dollar, intervened to weaken its own currency,
:25:26. > :25:30.Switzerland did the same, Japan did the same this week and so did
:25:30. > :25:33.Argentina, that has led to some fearing the break up of
:25:33. > :25:43.globalisation, others to welcome it. I don't think there is a danger
:25:43. > :25:49.with retreating from globalisation. Globalisation has led to a lot of
:25:49. > :25:52.problems causing the credit crunch, we have to ask is this what we want,
:25:52. > :25:57.a world dominated by large companies with weak labour power.
:25:57. > :26:02.It is not a level playing field at the moment. You have Asian
:26:02. > :26:07.Governments gaming the system which manipulating the exchange rate.
:26:07. > :26:10.last week's euro deal injected, potentially, more friction into
:26:10. > :26:14.that argument. Europe needs to borrow a trillion, but when the man
:26:14. > :26:21.doing the borrowing turned up in China, with his begging bowl, he
:26:21. > :26:25.was told stop criticising us over currency, and then we will see.
:26:25. > :26:30.In the early 1930s, even as the global economy slid towards break
:26:30. > :26:34.up, the band played on. This was a world in which radio was growing
:26:34. > :26:39.rapidly, the movies were beginning to talk, public morals were getting
:26:39. > :26:45.loser. - looser. Today it seems impossible that our
:26:45. > :26:50.global system could disappear, so much of our culture is bound up
:26:50. > :26:57.with it. Their's did. Within a decade, the whole world of jazz,
:26:57. > :27:03.loose morals and modern art was gone.
:27:03. > :27:07.There is no legal justification whatever for France not paying the
:27:07. > :27:11.current installment of $20 million on her debt to us.
:27:11. > :27:16.Two things drove the break up, debts that had become politic sized,
:27:16. > :27:21.and social unrest. - politicised, and social unrest.
:27:21. > :27:27.On the streets, once unrest brokeout, it proved impossible for
:27:27. > :27:31.politicians to resist, and national route out of the crisis. This time
:27:31. > :27:35.around, free market economists have been at the forefront of defending
:27:35. > :27:40.globalisation, but now some are beginning to see the possibility of
:27:40. > :27:45.retreat. Do you think it is realistic for us to still be
:27:45. > :27:50.talking about a global, multilateral solution to this
:27:50. > :27:54.crisis? I think it is both unrealistic and if it were it would
:27:54. > :27:59.be a mistake. I think it would be better at this stage for us each to
:27:59. > :28:03.look to our own ramparts, each try our own thing, and if we see
:28:03. > :28:06.something is working better somewhere else than what we have
:28:06. > :28:10.tried we can copy them. If you wait too long and end up doing your own
:28:10. > :28:14.thing, you do your own thing in an environment in which the
:28:14. > :28:18.populations and the politicians who turn up as their spokesman, blame
:28:18. > :28:22.international co-ordination for the events. They will say, we have been
:28:22. > :28:28.forced, by the Germans or the Americans, or the IMF or the UN, to
:28:28. > :28:35.do things this way, and part of our identity now is that we are against
:28:35. > :28:39.them, the enemy. In Greece, that's already happening.
:28:39. > :28:45.But the occupy protests too, though international, are each putting
:28:45. > :28:50.pressure on national Governments to act. Here again, say the economists,
:28:50. > :28:55.there are lessons from history. should not underestimate the social
:28:55. > :28:59.and economic peril of neglecting the moral aspect of policy. If
:28:59. > :29:08.people are subject to injustice for long enough, they will ultimately
:29:08. > :29:12.reject that and the political consequences can be terrifying.
:29:12. > :29:21.1934 the San Francisco industrial strike, this is worse than the
:29:21. > :29:26.world war. Today we are a lot richer than in the 1930s, that
:29:26. > :29:29.should cushion the blow. But the social cohesion is lower. To a
:29:29. > :29:35.generation whose future has been cancelled, it will be of little
:29:35. > :29:39.comfort that things were worse back then.
:29:39. > :29:46.In the last few minutes, Mr Papandreou has been speaking, and
:29:46. > :29:54.he has been quite defiant. I believe it is crucial that we
:29:54. > :30:00.show the world that we can live up to our obligations. We can live up
:30:00. > :30:09.to these obligations, and this is crucial for our future
:30:09. > :30:12.participation in the eurozone. telegraphic though that statement
:30:12. > :30:15.scenes, it does contain a message, it tells the world that what Mr
:30:15. > :30:21.Papandreou is trying to do in Greece is to convince the Greek
:30:21. > :30:25.people to take the bailout, to take the conditions which involve having
:30:25. > :30:29.foreign civil servants inside their own ministries, and to stay inside
:30:29. > :30:33.the eurozone. It is telling Mrs Merkel and Mr Sarkozy this is a
:30:34. > :30:38.gamble, I'm taking on your behalf, to try to convince the Greek people.
:30:38. > :30:41.It is saying, in other words, it is not to the cynical, a gamble in
:30:41. > :30:45.which I end up being chucked out of power, and therefore I don't take
:30:45. > :30:50.the blame for the disaster. I think that was a very clear message there
:30:50. > :30:54.from Mr Papandreou. Thank you very much.
:30:54. > :30:57.After their handling, or non- handling of the newspaper hacking
:30:57. > :31:01.scandal, the Press Complaints Commission has appeared more or
:31:01. > :31:04.less friendless, a toothless poodle, according to Ed Milliband, a
:31:05. > :31:09.failure and we need a new system entirely, according to David
:31:09. > :31:13.Cameron. Now the PCC has a new chairman, Lord Hunt, does it have a
:31:13. > :31:20.future. We will ask Lord Hunt in a moment. First, how the PCC hit the
:31:20. > :31:23.headlines for all the wrong reasons. The phone hacking scandal destroyed
:31:23. > :31:30.Britain's biggest-selling newspaper, News of the World. It still
:31:30. > :31:35.threatens the Murdoch empire. Hello it is Glenn. How are you.
:31:36. > :31:40.Just a quick one, voice mail reset on Gordon Taylor, it has Tottenham-
:31:40. > :31:43.related issues there. Many believe it will soon claim the scalp of the
:31:43. > :31:46.regulatory body, the Press Complaints Commission too. The PCC
:31:46. > :31:50.has been absolutely shocking in terms of any pretence of regulating
:31:51. > :31:54.the press. They just haven't done it. If you examine the time line
:31:54. > :32:04.behind the phone hacking story, then the weight of evidence against
:32:04. > :32:05.
:32:05. > :32:09.the PCC becomes embarrassingly clear. It reveals an organisation
:32:09. > :32:12.totally dependian on the good will and operation of those it is
:32:12. > :32:16.regulating. It also shows that those trying to blow the whistle
:32:16. > :32:21.were wrong, and it gave the impression of a body trying to shut
:32:21. > :32:28.down the story. For the PCC the challenge began in 2006 with the
:32:28. > :32:35.arrest of News of the World's private investigator Glenn Mulcaire,
:32:35. > :32:41.he had been working with the royal correspondent, Clive Goodman,
:32:41. > :32:44.hacking phones. The Police swung into action and interviewed the
:32:44. > :32:50.suspects, the regulatory body said it was one rogue reporter, this
:32:50. > :32:55.satisfied the PCC. Later the PCC would write it was not its reblit
:32:55. > :32:58.to replicate the police investigation to establish other
:32:58. > :33:04.transgressions, so no powers of investigation, no powers of audit,
:33:04. > :33:08.all was well in the best of all possible worlds. In 2009 the
:33:08. > :33:12.Guardian revealed other journalists had known about the phone hacking.
:33:12. > :33:15.Once again the PCC swung action to investigate, and published a report.
:33:15. > :33:19.That report concluded there was no substantial evidence to support
:33:19. > :33:24.that and that it had not been materially misled. Indeed, a week
:33:24. > :33:28.later, when giving evidence to the society of newspaper editors, the
:33:28. > :33:31.chair said new evidence had emerged from a Metropolitan Police
:33:31. > :33:35.detective. Who said that the number of victims of phone hacking was
:33:35. > :33:40.just a handful, not the thoughs referred to in evidence by leading
:33:40. > :33:43.phone hacking lawyer Mark Lewis. Not only did you go along with the
:33:43. > :33:47.News of the World lying that it was only one rogue reporter, not only
:33:47. > :33:51.did you implicitly attack the Guardian. You are not hearing your
:33:51. > :33:56.answers, you ignored my answers. You then attacked the lawyer to
:33:56. > :34:01.testified to the Commons that 6,000 people had been hacked. I didn't
:34:01. > :34:08.attack the lawyer, I'm not going into that. You had to apologise and
:34:08. > :34:12.pay costs, correct. They ended up paying damages and my legal costs.
:34:12. > :34:14.They certainly didn't understand the full nature of the hacking
:34:14. > :34:20.scandal? Not only did they not understand it, they didn't bother
:34:20. > :34:23.to look at it and get evidence. They were more concerned it seems
:34:23. > :34:28.in pleasing the crowd and the pay masters rather than investigating
:34:28. > :34:32.the problem. Shortly after that interview, Baroness Buscombe
:34:32. > :34:36.announced she was stepping down. Her successor will have to decide
:34:36. > :34:39.if the PCC has lost so much credibility it can no longer
:34:39. > :34:49.command respect, or whether it is possible to strengthen the
:34:49. > :34:49.
:34:49. > :34:53.commission as part of reform. Lord Hunt here, the new head of the PCC.
:34:53. > :35:01.It sound from that worp that you are worse than useless, because you
:35:01. > :35:05.give a fig leaf of respectability to those newspapers? My job is not
:35:06. > :35:11.to look at the past, but to start with a blank sheet of paper and
:35:11. > :35:13.work out the best possible system for the self-regulation, the
:35:13. > :35:16.independent self-regulation of the press, that will command the
:35:16. > :35:22.confidence of the public. You don't start with a blank sheet of paper,
:35:22. > :35:27.you start with a Levison inquiry, not about the past but the future.
:35:27. > :35:36.You have to deal with that. Every single thing we have heard there
:35:36. > :35:41.suggests the PCC, if you like, are a union for newspapers who serve on
:35:41. > :35:44.the PCC The way I see it, I have just arrived, I have been given a
:35:44. > :35:48.blank piece of paper, I sense a mood for fundamental reform. It is
:35:48. > :35:53.my job now to work out what is the best possible structure.
:35:53. > :35:58.puzzled by the blank sheet of paper thing? There isn't one? There is
:35:58. > :36:03.for me. The past of the PCC doesn't matter? I'm suggesting you the
:36:03. > :36:06.future, if you you have got one, does matter, and the Levison
:36:06. > :36:10.Inquiry could say you are useless, as the Prime Minister and the
:36:10. > :36:16.leader of the opposition have said? What I would like to do is this,
:36:16. > :36:23.Lord Justice Levison has this inquiry, he's looking into a whole
:36:23. > :36:26.range of areas of policy, the ethics of the whole of the press
:36:26. > :36:30.regulatory system. What I would like to do is fill in my blank
:36:30. > :36:34.piece of paper, listening to everyone, taking account of all the
:36:34. > :36:38.concerns, some of which you have just expressed. And then present
:36:38. > :36:43.Lord Justice Levison with what I believe to be the solution. It is
:36:43. > :36:46.then up to him to decide whether that is adequate or not. But I'm
:36:46. > :36:50.going to do everything I can to produce the right result. That is
:36:50. > :36:53.very interesting, you also said a regulator, or self-regulator, is
:36:54. > :36:58.that how you see yourself, you would want to be a regulator,
:36:58. > :37:02.because the charges, - the charge is, you are not? I think one of the
:37:02. > :37:07.reasons I have been asked to do this job s I'm a lawyer. I have
:37:07. > :37:11.been with my law firm for 46 years, OK 35 years in parliament, but I
:37:11. > :37:15.have very understanding partners. I specialise in regulatory law. What
:37:15. > :37:22.I have to say straight away, in answer to the question you have
:37:22. > :37:28.raised, is that the PCC is not a regulator. Should it be? There
:37:28. > :37:33.needs to be a regulator, now another two bodies, the editors
:37:33. > :37:40.code committee, which actually, if you read the code, it is an
:37:40. > :37:46.excellent code, the sort of code that the late David Calcott wanted
:37:46. > :37:50.the press to endorse. Two years after he stepd set up the PCC, he
:37:50. > :37:54.said it wasn't strong enough or working. The point is systemic
:37:54. > :37:58.failure, I know you don't want to look back at the past, but as a
:37:58. > :38:03.regulator, you wouldn't go and regulate anybody by saying what do
:38:03. > :38:11.you think, OK, fine, would you expect it your self. That has to
:38:11. > :38:15.change or the PCC will go, won't it? I was in the cabinet that
:38:15. > :38:20.received the first of the reports and then the second. I approach
:38:20. > :38:23.this with two fundamental beliefs, first of all in self-regulation,
:38:23. > :38:27.and secondly in freedom of the press. I think that is one of the
:38:27. > :38:33.greatest assets we have. It carries with it, not only the right for
:38:33. > :38:37.free expression, but also the heavy responsibility. I have got to try
:38:37. > :38:41.to find the structure that will restore public confidence in the
:38:41. > :38:45.whole system. You are not there to be the last PCC chairman, are you.
:38:45. > :38:49.That is the implication? That is still to be decided, if there is an
:38:49. > :38:53.appetite for fundamental reform. I would hope we would see the
:38:53. > :38:58.existing work of the PCC, a lot unrecognised, which has been very
:38:58. > :39:02.effective in dealing with complaints. But I want to see a
:39:02. > :39:06.regulatory system, which does require renewal and regeneration. I
:39:06. > :39:09.will do my best. Thank you very much.
:39:09. > :39:15.To their fans they have always proved very popular right here in
:39:15. > :39:21.Britain. News that REM are spliting up after 1 years was a real moment
:39:21. > :39:25.of sadness. Their music - 31 years a real moment of sadness. Their
:39:25. > :39:30.music is called alternative right, but it is also a political voice
:39:30. > :39:38.throughout the world. Our report talks about why it really is the
:39:38. > :39:44.end of the world as we know it. # Shiny happy people
:39:44. > :39:48.The men from Athens Georgia, weren't your typical rock stars. As
:39:48. > :39:52.Rolling Stone Magazine said, they lived in some weird town nobody
:39:52. > :40:02.ever heard of, they didn't play power chords, they probably
:40:02. > :40:03.
:40:03. > :40:08.couldn't even spell spanned decks. Massive - Spandex. Massive stardom
:40:08. > :40:13.sat uncomfortably on REM shoulders. Unlike Bono, when you see him out
:40:13. > :40:18.in his leathers waving a flag, someone who looks to the manor born,
:40:18. > :40:21.it never looked quite that, rather like Morrisey in the Smith, they
:40:21. > :40:26.looked like they could do it, but never looked as comfortable doing
:40:26. > :40:34.it. In Michael Stipe he had a rock man, who subverted what the rock
:40:34. > :40:40.frontman was, more Quentin Crisp than Rock Viking.
:40:40. > :40:47.# Kaufman in the wrestling match # Yeah, yeah, yeah.
:40:47. > :40:51.REM took traditional American rock feel, and gave it a reading list.
:40:52. > :40:57.Their songs could be about subjects as ease sow teric about the
:40:57. > :41:03.troubled sitcom star, Andy Kaufman as in Man On The Moon.
:41:03. > :41:08.This was alternative rock. M it's the end of the world
:41:08. > :41:13.- # It's the end of the world # As we know it
:41:13. > :41:17.You could say the same of the causes REM championed.
:41:17. > :41:22.Members of the band have campaigned for environmental, feminist and
:41:22. > :41:29.human rights causes, and to encourage voting. But are they for
:41:29. > :41:34.real, or just celebrity liberals, as some have claimed. For a while
:41:35. > :41:40.they were lumped in with the charity aristocracy, I think they
:41:40. > :41:44.always remained true to a slightly esoteric and leftfield agenda.
:41:44. > :41:48.Stipe aligned himself with any number of causes, he genuinely
:41:48. > :41:51.believed in them, that is not to say anybody else didn't. You
:41:51. > :41:59.certainly felt his heart was in them rather more than Sting, shall
:41:59. > :42:02.we say. To take a liberal agenda, quite an
:42:02. > :42:10.explicitly liberal agenda and fill American rock stadiums with it and
:42:10. > :42:15.the radio, is no mean feat, it they have remained a constant in
:42:15. > :42:20.American conscience in the way that politicians haven't.
:42:21. > :42:26.idiosyncratic REM marked their break-up, not with fights and writs,
:42:26. > :42:31.but with a new video featuring Kirsten Dunst, was it that
:42:31. > :42:37.difficult 16th album, or did they chuck the towel in after David
:42:37. > :42:42.Cameron picked their Perfect Circle for his desert island disc. Was
:42:42. > :42:47.there a moment when you thought that's it, it's over? It was a long
:42:47. > :42:52.moment. Two years worth. We took a long time to figure out we wanted
:42:52. > :42:57.to call it a day and disband. you could go on, separate for a bit,
:42:57. > :43:01.come back for a bit, other bands do it, why? Because it was an
:43:01. > :43:04.opportunity for us to walk away on our own terms, which is something
:43:05. > :43:08.that, as far as I know, very few bands, certainly that have been
:43:08. > :43:12.around for any length of time, have had the opportunity to do. There
:43:12. > :43:19.are no external forces making us do this, we have no problems.
:43:19. > :43:23.don't hate each other? No. We can walk away as friends and feel like
:43:23. > :43:28.we have accomplished everything we wanted to accomplish. We touched on
:43:28. > :43:32.the politics there, going back to the Reagan administration, you
:43:32. > :43:37.spoke at the Clinton inaugural in 1993, how important was that for
:43:37. > :43:41.you, and does it mix with the music? That was a moment for
:43:41. > :43:46.America, we had been through 12 years of what I thought were the
:43:46. > :43:51.darkest political years of my country. In my lifetime. We had no
:43:51. > :43:58.idea that Bush and Cheney were on the horizon, they trumped his
:43:58. > :44:02.father. But to be able to welcome in someone who was relatively
:44:02. > :44:06.liberal-minded or at least moderate, as the Clinton administration
:44:06. > :44:10.started out to be, it was a great moment for America. This is a great
:44:10. > :44:15.moment for politics, isn't it, therefore, presumably for political
:44:16. > :44:19.song writing, I know some of you in your songs have touched in and out
:44:19. > :44:22.of it. This is great moment for it right now? It is easy to write
:44:22. > :44:26.about politics in the opposition, when you are the underdog and you
:44:26. > :44:30.are angry at what's going on. Eventhough we are huge fans of
:44:30. > :44:35.President Obama, the fact is, he has been stymied in so much of what
:44:35. > :44:43.he wanted to do by the minority, which seems inherently unfair to us,
:44:43. > :44:47.and just as irritating as having the majority being the problem.
:44:47. > :44:50.are not abandoning President Obama, and would support him next year?
:44:51. > :44:57.absolutely. He's in trouble isn't he? He's in trouble, this is my
:44:57. > :45:01.opinion, nothing more. He won't say up front that the administration
:45:01. > :45:06.that he followed screwed things up so badly, and that he and his
:45:06. > :45:11.administration had to clean up the mess. And I wish he would just say
:45:11. > :45:16.that. But it seems unpresidential to do so. When you have toured
:45:16. > :45:19.around the world for many years, very popular here, as we have said,
:45:19. > :45:25.do you notice how views of America and Americans have changed since
:45:25. > :45:30.you have started touring. In other words, how popular are Americans
:45:30. > :45:33.and how popular is America now? think it is better than it was
:45:33. > :45:38.certainly when we first started coming over here. There were the
:45:38. > :45:43.civils being placed around, we were the lighten - cuefls being placed
:45:43. > :45:47.around, and we were - cruise missiles being placed around and
:45:47. > :45:51.Westminster the face to complain to when we were here. General America
:45:51. > :45:55.is perceived a little better than when we started out, it is a
:45:55. > :46:01.neverending struggle and it doesn't get better in the big picture.
:46:01. > :46:06.important is it when anybody who is a celebrity in any field gets
:46:06. > :46:09.involved in causes, your causes have been Darfur and domestic
:46:10. > :46:14.politics. Does that actually help or not? I think it does, people
:46:14. > :46:19.have come up to me over the course of 32 years we have been together
:46:19. > :46:24.as band and said I was an aimless 17-year-old and I heard this song
:46:24. > :46:27.or saw this show and I'm an environmental lawyer, thank you for
:46:27. > :46:32.helping influence my life choice. Stuff like that happens, more often
:46:32. > :46:36.than you would think. That makes me feel, as a public figure, like our
:46:36. > :46:40.actism, although it might turn off some fans because they might have a
:46:40. > :46:44.different opinion, I think it is important to feel like you can
:46:44. > :46:48.express yourself. But is there a problem when you are one of the
:46:48. > :46:52.biggest rock bands in the world doing that kind of thing. Sometimes,
:46:52. > :46:56.for instance, Sting and Bono, not entirely popular with some people
:46:56. > :47:01.because of that? You certainly risk alienating people. As a human being,
:47:01. > :47:04.I have to get up and look at myself in the mirror in the morning. And
:47:04. > :47:08.what I live for is not to be popular with everyone, but to be
:47:08. > :47:11.true to what I believe in and what I feel. If that involves using our
:47:11. > :47:14.platform to make political statements and potentially
:47:14. > :47:19.alienating a certain portion of the audience, that is something we have
:47:19. > :47:29.to do any way. When are you getting back together again? We are not.
:47:29. > :47:30.
:47:30. > :47:37.Thank you for asking. When is the hell freezes over tour going to go
:47:37. > :47:40.on? It is over. Sad? It is bitter sweet, it is strangely liberating.
:47:40. > :47:45.Oddly liberating, we feel very comfortable with what we have done.
:47:45. > :47:52.Today's protest, the Occupy Wall Street, fans of that? Absolutely,
:47:52. > :47:56.yes. Let's get a quick last word from Paul in Cannes at the G20.
:47:56. > :48:01.In the last 60 minutes effectively what has happened is the deal done
:48:01. > :48:04.in Brussels last week has been put on hold. Greece won't get the eight
:48:04. > :48:09.billion bailout money it was due, until the referendum, it is fairly
:48:09. > :48:12.clear that the G20 leaders are accepting that Mr Papandreou wants
:48:12. > :48:15.the referendum, and we are being told he will try to go for it in
:48:15. > :48:19.December, possibly as early as the 5th of December. This could all
:48:19. > :48:23.change by Friday, he has to get it through the Greek parliament. But
:48:24. > :48:27.ultimately, there is a bit of poetic justice, the Greek crisis,
:48:27. > :48:31.at the root of all the other crises going on in this town, will be
:48:31. > :48:34.resolved by the Greek parliament and the Greek people.
:48:34. > :48:44.That is all from Newsnight tonight, more from Kirstie tomorrow, good
:48:44. > :48:50.
:48:50. > :48:54.Good evening, few of us will be completely dry overnight. Outbreaks
:48:54. > :48:57.of rain in the north and the east. Northern England and Scotland,
:48:57. > :49:00.conditions will improve during the day. A scattering of showers across
:49:00. > :49:04.the west and south initially. Developing a bit further inland.
:49:04. > :49:09.Some showers puorning into the back of northern England for the end of
:49:09. > :49:13.the afternoon. Much of the wet start will be dry and bright. There
:49:13. > :49:16.is that threat of showers anywhere across central and southern areas,
:49:16. > :49:21.some heavy, some of of the wetter conditions across East Anglia and
:49:21. > :49:26.the south-east. It looks as if across South-West England and Wales,
:49:26. > :49:29.the big threat of showers should be in the afternoon. Brighter weather
:49:29. > :49:31.throughout the day despite the continuing threat of showers. For
:49:31. > :49:37.Northern Ireland the heaviest of the showers again for the afternoon,
:49:37. > :49:40.a few rumbles of thunder too, the brighter spells, 15-16, same sort
:49:40. > :49:43.of values across Scotland, showers in the west of Scotland, but to the
:49:43. > :49:46.north and east it will be a brighter second half of the day.
:49:46. > :49:50.From Thursday into Friday, again some outbreaks of rain, Friday, you
:49:50. > :49:54.can see the city forecast, Scotland and Northern Ireland, not many
:49:54. > :49:58.showers to speak of, compared to further south, outbreaks of rain on
:49:58. > :50:01.Thursday, Friday looking that little bit brighter, but there will
:50:01. > :50:04.be slow-moving, heavy and thundery showers. Those showers will be at