:00:08. > :00:13.It's turning into a Greek tragedy. Papandreou's plan to give the
:00:13. > :00:16.people a say is almost certainly finished and he could soon be too.
:00:16. > :00:22.The Euro-crisis could be about to claim the Greek Prime Minister, we
:00:22. > :00:27.are live in Athen tonight. It has indeed been a day of high political
:00:27. > :00:32.drama in police. With the Prime Minister, George Papandreou,
:00:32. > :00:37.apparently wavering between trying to save his own job, and save the
:00:37. > :00:41.referendum on the Euro-bailout upon which he has staked his reputation.
:00:41. > :00:46.In Cannes, heads of Government are desperately trying to come up with
:00:46. > :00:50.a new to try to stop contagion spreading across the globe, which
:00:50. > :00:57.could include British taxpayer guaranties. We will hear from Paul
:00:57. > :01:02.Mason at the G20, we will have views from America, Brazil and
:01:02. > :01:08.other places on how to prevent crises throughout the world. We
:01:08. > :01:15.will have the reaction from one of the Chancellor's closest allies.
:01:15. > :01:18.How the Occupy protests on Wall Street and around the world already
:01:18. > :01:28.are changing the political conversation and what happens next.
:01:28. > :01:32.We will speak to one of their most famous protestors, Naomi Wolf.
:01:32. > :01:35.After day of extraordinary turmoil, it now looks as though Greece could
:01:35. > :01:38.be heading for a new coalition Government. The Greek Prime
:01:38. > :01:41.Minister, who was sent home from Cannes last night, his tail between
:01:41. > :01:44.his legs, will almost certainly give up on his attempts to hold a
:01:44. > :01:48.referendum and may well have to leave office himself. Tonight he's
:01:48. > :01:51.clinging to the wreckage of his political career, waiting for a
:01:51. > :02:00.vote of confidence tomorrow, with the bailout and the country's place
:02:00. > :02:06.in the eurozone far from certain. Our diplomatic editor, Mark Urban,
:02:06. > :02:10.joins us from Athen. George Papandreou became back from that
:02:10. > :02:13.meeting in Cannes, boxed in to an extraordinary degree, the faces of
:02:13. > :02:17.the political prison, the suffering of the Greek people under the
:02:17. > :02:21.austerity measure, the outrage of the international community at his
:02:21. > :02:25.call for a referendum on EU bailout package. Then the problems within
:02:25. > :02:29.his own party and the difficulty of achieving any sort of meaningful
:02:29. > :02:35.political dialogue with the pop significance here. As the day wore
:02:35. > :02:40.on - opposition here, as the day wore on he was railing in that cell
:02:40. > :02:44.of political idea days. At times his actions defied any
:02:44. > :02:48.inperpretation, the Greek press corp are puzzled by the lines
:02:48. > :02:52.coming out of his office and party. Little by little things became
:02:52. > :02:54.clearer. He hasn't gone today, he faces this vote of no confidence
:02:54. > :02:58.tomorrow night. His political opponents are going to play it
:02:58. > :03:06.right up to the wire, I think. They are not going to make it easier for
:03:06. > :03:12.him. The dilemmas he will face and the choices he will make over the
:03:12. > :03:16.last 24 hours did at least clarify some what as the day progressed.
:03:16. > :03:18.This country is locked in stand-off with the European Union and its
:03:18. > :03:22.leading players. Throughout today members of the parliament were
:03:22. > :03:27.coming and going, trying to understand who would prevail. But
:03:27. > :03:30.one thing seemed clear, that either George Papandreou, or his plan for
:03:30. > :03:34.a referendum, would not survive the day.
:03:35. > :03:44.Opposition members said the Government had to go at once.
:03:44. > :03:49.risk is that people don't believe that democracy works. And they have
:03:49. > :03:57.to feel that they are represented, right now there is not the right
:03:57. > :04:00.representation. When they were voting in the last elections they
:04:00. > :04:03.don't feel they are represented today. The Prime Minister himself
:04:03. > :04:07.returned from a trip to see the leaders of German and France, what
:04:07. > :04:11.was uncomfortable, to put it mildly, they told him Greece couldn't
:04:11. > :04:17.remain in the euro it rejected last week as bailout, and couldn't even
:04:17. > :04:22.think of rejoining for ten years. Threats delivered in France could
:04:22. > :04:26.be felt even in this suburb of Athens, where academic researchers
:04:26. > :04:31.were demonstrating. They have lost their jobs under existing austerity
:04:31. > :04:38.plans. And they are angry that further help is dependant on even
:04:39. > :04:43.more pain. All these austerity measures were taken without asking
:04:43. > :04:47.the Greek people. Actually the Greek people should be referred to
:04:47. > :04:57.before the austerity measure, they should be referred to for a number
:04:57. > :05:01.of things. This has not happened, and of course this is not good for
:05:01. > :05:04.our dignity. There are so many grievances here now that the
:05:04. > :05:08.academics got upstaged by High School students sitting in the
:05:08. > :05:11.hidle of the road, they want to save their school - middle of the
:05:11. > :05:14.road, they want to save their school, arguing if their education
:05:14. > :05:19.isn't safe, nothing is. I don't think we have dreams for the future
:05:19. > :05:24.in this country. It is really bad for us, it is awful for us.Under
:05:24. > :05:28.That type of internal, as well as external pressure, many expected
:05:28. > :05:33.this morning a Changing of the Guard, a prime ministerial
:05:33. > :05:38.resignation. His own Finance Minister today fell out of step,
:05:38. > :05:41.dropping support for the referendum. How could Mr Papandreou stay? The
:05:41. > :05:45.parliamentary maths are absolutely vital to Mr Papandreou, and the
:05:45. > :05:50.signs are, in recent hours, that the numbers are finally slipping
:05:50. > :05:54.away from him. He was going to talk to his Socialist Party MPs about
:05:54. > :05:59.now in there to try to rally their support, instead we have heard he's
:05:59. > :06:04.heading for the President's office, either to resign or to offer to
:06:04. > :06:13.form a coalition Government. So, Greek TV staked out the President's
:06:13. > :06:18.office, reporting the Prime Minister was on his way to resign.
:06:18. > :06:21.But pretty soon chaos reined in newsrooms and on air. Mr
:06:21. > :06:26.Papandreou's office said he wouldn't visit the President and
:06:26. > :06:29.would address his Members of Parliament at 5.00.
:06:29. > :06:34.The media circus moved back to parliament, we caught up with one
:06:34. > :06:39.of those socialist MPs, whose support for her leader is wavering.
:06:39. > :06:46.Right now we need a new Government that will get us back on track, and
:06:46. > :06:53.we have to face all the new deal of the 26th of October. So it is up to
:06:53. > :06:58.us and the leaders to take a step back and try to make the deal work.
:06:58. > :07:01.If he found a solution, we can make it, of course we can, we have one
:07:01. > :07:04.month to decide, that but instead of the referendum we have to find a
:07:04. > :07:07.new solution. So, is it possible, do you think,
:07:07. > :07:11.he will still be Prime Minister on Saturday with everything you have
:07:11. > :07:15.just said about the referendum? don't know that. The problem is
:07:15. > :07:19.that we don't need elections now, we don't need a referendum now, we
:07:19. > :07:24.just need a Government that will take us out of this crisis.
:07:24. > :07:28.evening is coming on now, and one thing is clear, which is that Mr
:07:28. > :07:32.Papandreou is going to fight, he's still trying to hold his party
:07:32. > :07:37.together, and he's prepared to manoeuvre engettically to save
:07:37. > :07:41.himself and his Government. - ener gettically, to save himself and his
:07:41. > :07:44.Government, it is even, according to some of his MPs, prepared to
:07:44. > :07:48.drop the idea of a referendum on the bailout. Inside he implied that
:07:48. > :07:58.the way out of this crisis was for the opposition to join him in
:07:58. > :08:02.
:08:03. > :08:07.supporting the bailout, so making a referendum unnecessary.
:08:07. > :08:12.TRANSLATION: Opening the conversation on the bailout revived
:08:13. > :08:16.everyone, and brought political shock to this country.
:08:16. > :08:20.Papandreou has bought himself another day, by offering to shelf
:08:20. > :08:25.the referendum, and build cross- party support for the EU's bailout.
:08:25. > :08:32.But there must still be a reckoning, and a confidence vote on the
:08:32. > :08:39.Government looms tomorrow. Joining me now from Athens is the communist
:08:39. > :08:43.party MP, Eva Kaili. Kood evening to you, in - good evening, in your
:08:44. > :08:48.opinion, will George Papandreou survive tomorrow? I think he's
:08:49. > :08:52.going to fall down. I think he's already an ex-Prime
:08:52. > :08:55.Minister, although he doesn't realise it. But when it comes to
:08:55. > :08:58.those two different things happening here, there will be the
:08:58. > :09:02.vote of confidence tomorrow night, but all the time, during the day,
:09:03. > :09:08.there will be the idea of perhaps some Government of National Unity,
:09:08. > :09:12.can you explain to us what you think might happen? There is only
:09:12. > :09:18.one way to have and guarantee national unity, this is the
:09:18. > :09:22.expression of the grok people. In democracy there is only - the Greek
:09:22. > :09:28.people, in democracy there is only one way, elections. If we have a
:09:28. > :09:30.caretaker Government, a caretaker Government, then it would be easier
:09:31. > :09:37.for everybody. We could have elections in less than four weeks.
:09:37. > :09:41.Did you hear your colleague in the PASOK party saying that you simply
:09:41. > :09:44.cannot afford to have more elections? I didn't hear the
:09:44. > :09:49.question, I'm sorry, I'm outside and there is a lot of noise, can
:09:49. > :09:54.you repeat the question, please. talked to one of your colleagues in
:09:54. > :09:58.the PASOK party, who said you can't afford to have elections? Why? Why
:09:58. > :10:08.is it so exopinionsive to have elections. Why is it so expensive
:10:08. > :10:12.to be in a European Union where no- one, Portuguese, Spaniards, Germans,
:10:12. > :10:15.and Greeks are not happy. The majority of the people, the
:10:15. > :10:23.majority of the working-class, the every day people, they lose money,
:10:23. > :10:29.they lose hope, they lose trust, so what is the purpose of insisting in
:10:29. > :10:33.a case that does not, cannot afford elections. It is impossible to
:10:33. > :10:39.understand that Kirsty. It is impossible, why in a democracy, or
:10:39. > :10:45.in a democratic union, that wants to face the 21st century, not in
:10:45. > :10:52.the terms of being Chinese salaries, and Indian income, in Europe, of
:10:52. > :10:58.the 21st century, after two world wars, after fighting against Nazis
:10:58. > :11:00.and fascists, how can we survive? Do you think if there was a
:11:00. > :11:03.coalition Government or Government of National Unity, then Greece
:11:03. > :11:09.would simply have to bite the bullet and accept the bailout,
:11:09. > :11:14.accept the terms of the bailout? Two years ago Greeks voted for a
:11:14. > :11:17.Government that said there is money. Now they find out that when this
:11:18. > :11:23.Government was telling them there is money, they meant the money
:11:23. > :11:27.everybody had in his pocket, or in his pension, or in his studies or
:11:27. > :11:37.in his future. If you are a Greek, you were born here, just the first
:11:37. > :11:41.day of your life, you would owe to the markets up to 100 though euros.
:11:41. > :11:45.How many babies can you bear. is the answer, is the answer to
:11:45. > :11:50.simply leave the euro, what is the answer? The answer can be given
:11:50. > :11:56.only by the Greek people. And I'm not arrogant enough, being one
:11:56. > :11:59.person, here, to express the future will of the Greek people. Let's
:12:00. > :12:05.hear the expression of your own will, as an MP you have an opinion
:12:05. > :12:11.on this, I wonder as an MP whether or not you think Greece is better
:12:11. > :12:17.inside the euro or outside the euro? As an MP, I believe, that the
:12:17. > :12:21.future of my country is outside this kind of Europe. I think I
:12:21. > :12:27.belong to the most European party, but when I say Europe, when we say
:12:27. > :12:32.Europe, we mean people's Europe. We don't mean markets' Europe. We
:12:32. > :12:36.don't mean the price of my life being the same way up and down,
:12:36. > :12:42.somebody is making money. If you are not in this euro, who will bail
:12:42. > :12:48.you out next time, what will happen to Greece? Look, what's going to
:12:48. > :12:53.happen to Greece, I think that people will become, in a few years,
:12:53. > :12:58.richer than they are now. They can have their own deals, and they
:12:58. > :13:01.won't be in danger of losing parts of the country. You know, we don't
:13:01. > :13:06.produce tulips here, we are not in a very peaceful part of Europe. We
:13:06. > :13:12.are very close to the Middle East, and we are very close to the fusion
:13:12. > :13:17.that is needed and the whole thing can explode into a war when you
:13:17. > :13:22.have imperialist antagonisms. just to be quite clear then here,
:13:22. > :13:27.you think that Greece can survive, and be much more economically sound
:13:27. > :13:34.on its own? It has been proven throughout the years. Thank you
:13:34. > :13:37.very much. The Greek crisis has hijacked the
:13:37. > :13:41.G20 Summit in Cannes, where President Sarkozy, as President of
:13:41. > :13:44.the Group of countries this year, had hoped to lead world discussion
:13:44. > :13:47.ones trade, commodities and sustainable economic growth,
:13:47. > :13:52.instead he and Angela Merkel and other heads of state have been
:13:52. > :13:55.trying to work out how to stop the contagion spreading. And listen up,
:13:55. > :14:01.this could involve British tax- payers underwriting millions. Paul
:14:01. > :14:05.Mason is in Cannes. Paul, do they have a plan tonight to stop the
:14:05. > :14:09.contagion spreading? Greetings from the side show, starring the 20 most
:14:09. > :14:14.powerful people on earth. No, they don't have plan. What they have got
:14:14. > :14:19.is a kind of pass the parcel game, with the parcel being a piece of
:14:19. > :14:25.financial Semtex which is Italy's debt. Italy's debt, 6.5% borrowing
:14:25. > :14:32.costs today, the highest since the euro started. The original plan was,
:14:32. > :14:38.last week, to basically put sandbags around it, to continue the
:14:38. > :14:41.metaphor in the form of the EFSF, designed by the European Union, the
:14:41. > :14:44.bailout fund. That is defunct, because the Chinese don't want it,
:14:44. > :14:49.they don't trust the mechanism. What the Chinese and the British
:14:49. > :14:53.are pushing is for the IMF to pick up the par se. The problem with the
:14:53. > :14:57.IMF is the IMF is not just the euro. There is a question of
:14:57. > :15:00.responsibility. The IMF lends according to a quota, if you did
:15:00. > :15:05.the whole trillion, and I don't think you will do the whole
:15:05. > :15:08.trillion. If you did the whole trillion Britain would owe 45
:15:08. > :15:11.billion, notionly. The problem there is, that's not happening
:15:11. > :15:14.either. There is a big argument about it. Lots of people don't want
:15:14. > :15:20.to do it, as we will probably see later in the programme. Some Brits
:15:20. > :15:23.don't want to do it. In the end there is the European Central Bank.
:15:23. > :15:26.Its boss said we are cutting interest rates, new boss, newer
:15:26. > :15:30.attitude to interest rates. But he said it is not our job to pick up
:15:30. > :15:33.the parcel either, it is not in our remit. I have to say the bond
:15:33. > :15:37.markets believe it will, the bond markets believe that the European
:15:37. > :15:47.Central Bank will be forced to change its role and will pick up
:15:47. > :15:50.
:15:50. > :15:58.the tab, simply because the others just can't. By this morning, Cannes
:15:58. > :16:03.was more about cote than azzure. Delegates woke to the realisation
:16:03. > :16:10.that Greece had well and truly rained on their parade. It was
:16:10. > :16:14.clear, that only the countries with cash looked anything like confident.
:16:14. > :16:19.Here, deep inside the security zone, at the hotel the leaders are
:16:19. > :16:22.staying in, they are flabbergasted. They came here to a summit to sort
:16:22. > :16:26.out the strategic problems of the world, instead they are dealing
:16:26. > :16:31.with the problems of a small country that could quite easily
:16:31. > :16:36.blow up the euro. He has offered his resignation, I
:16:37. > :16:41.think. As the Greeks ditered, the leaders in Cannes pressed the flesh
:16:41. > :16:44.and looked grim. The presence of Mr Berlusconi in the room a reminder
:16:44. > :16:48.of the real problem, the southern part of Europe is bust, and the
:16:48. > :16:52.deal agreed last week to sort that out, hasn't happened. To find the
:16:52. > :17:02.trillion dollars needed, Europe must go cap in hand to the emerging
:17:02. > :17:06.world. TRANSLATION: It is not that I'm trying to hide anything, but
:17:06. > :17:11.there are a lot of players around the table. Our main aim is to come
:17:11. > :17:15.up with something credible, ambitious and fast. But what? Of
:17:15. > :17:20.the 20 countries represented here, only the following have actual cash.
:17:20. > :17:24.The big emerging economies, and the exporters, above all, China, have
:17:24. > :17:31.low and managable debts. At the other end of the scale, Japan,
:17:31. > :17:36.Italy and the USA have debt in excess of 100% of GDP. Suddenly,
:17:36. > :17:39.for the first time, it begins to matter how the world looks to these
:17:39. > :17:43.creditor countries, and it does not look good. This is the Prime
:17:43. > :17:49.Minister of Singapore, his country has a permanent place at the G20
:17:49. > :17:53.table, because it has money. So could they help? The IMF, if it
:17:53. > :17:57.needs more resources, will have to depend on the participation of all
:17:57. > :18:01.of its members N that context Singapore will do our part. I don't
:18:01. > :18:05.think you can expect any white Knights to ride to the rescue. We
:18:05. > :18:11.are past the white Knights age now. What do you mean by that?
:18:11. > :18:16.country is going to say I feel I will come and I will sacrifice
:18:16. > :18:19.myself in order to put out somebody else's fire. There are good
:18:20. > :18:26.intentions expressed, we want to build up a trillion dollar fund,
:18:27. > :18:31.and the EFSF, or we want to recapitalise the banks another 100
:18:31. > :18:36.billion euros. How will you do that, what is the specific plan and not
:18:36. > :18:41.just the intention. That part has to be fleshed out, I'm sure that -
:18:41. > :18:44.I'm not sure that can be done, not just fleshed out, beefed up. You
:18:44. > :18:48.need more fire power to convince everybody, including yourselves,
:18:48. > :18:53.that you are going to defend this position and you can defend this
:18:53. > :18:56.position. Europe's new weakness, and America's recent troubles, have
:18:57. > :19:01.strengthened Asia's hand. Two years ago it would have been Japan and
:19:01. > :19:07.China getting it in the neck for currency manipulation. Now it is
:19:07. > :19:11.they who have come to do the Hardtalks, as Japan's Finance
:19:11. > :19:18.Minister - hard talking as Japan's Finance Minister made clear to me
:19:18. > :19:25.today. TRANSLATION: We can see the critical situation developing in
:19:25. > :19:30.the European economies, if there is contraction it could drive down the
:19:30. > :19:40.Asian economy quickly. I hope that Europeans can recognise that they
:19:40. > :19:44.have responsibility, visa advise the rest of the world. What is
:19:44. > :19:54.striking is the Asian powers who want to go beyond firefighting and
:19:54. > :19:54.
:19:54. > :19:58.do strategy. Growth has to be part of the solution. If you are going
:19:58. > :20:04.to diminish unemployment and hold out hope for your people, you have
:20:04. > :20:09.to grow, and you have to have a plan to grow. That is what they
:20:09. > :20:12.were supposed to be discussing here, plan for growth. But this, crest
:20:12. > :20:22.fallen and be dragled summit, has been side tracked into crisis
:20:22. > :20:26.management and confusion. What is happening tonight, is there
:20:26. > :20:30.any way of resolving this thing that we discussed? Tonight there is
:20:30. > :20:34.an unofficial summit of the European Union, in one of the
:20:34. > :20:38.hotels, and the Americans. What could they be discussing? The
:20:38. > :20:42.problem here is, we spend day after day, hearing negative talk about
:20:42. > :20:49.Greece, and negative talk about the Italians and Berlusconi, but
:20:49. > :20:53.ultimately, at the heart of this problem, lie - lies Germany, that
:20:53. > :20:59.is the country that can't let go of the old institutions and the old
:20:59. > :21:02.role of the eurozone. The fiscal rectitude, the conservative
:21:02. > :21:07.European Central Bank. I think what is going on, only President Obama
:21:07. > :21:11.has the moral authority to say to Germany, Germany, we bailed you out
:21:11. > :21:15.in 1948, you have to just start changing your attitude, and allow
:21:15. > :21:19.some of this flexibility. Even within the EFSF, they fought a rear
:21:19. > :21:27.guard action against that. Every one of these firewalls we are
:21:28. > :21:31.trying to erect, EFSF, IMF, and ultimately ECB, alphabet soup, but
:21:31. > :21:33.very important, at every point the Germans are the sticking point. The
:21:33. > :21:36.discussion will be for the Americans to use their moral
:21:36. > :21:42.authority with Germany to say you have just got to give. Because
:21:43. > :21:50.otherwise, the clock is ticking. The Italian debt looks OK for now,
:21:50. > :21:54.it may be four or five days away from not looking OK. What does it
:21:54. > :21:59.mean? Italy becomes a ten-times bigger Greece. Make no mistake, if
:21:59. > :22:04.that happens in Italy, that will blow up the world financial system.
:22:04. > :22:09.Joining me now from New York is Gillan Tett, the assistant editor
:22:09. > :22:18.of the Financial Times. From washing en to I'm joined by Elmar
:22:18. > :22:21.Brok, joining me in the studio is bra stillalam bassor to the UK. And
:22:21. > :22:31.- Brazilian ambassador to the UK. And Ken Rogoff.
:22:31. > :22:33.First of all, you have been hearing about this maelstrom, are you
:22:33. > :22:37.confident they can stop contagion spreading? I'm not. The reason
:22:37. > :22:40.Greece is a problem is they don't have a plan for containing it. They
:22:40. > :22:44.are talking about building up this firewall, building up this big fund.
:22:44. > :22:50.It is a bridge, but a bridge to what? The euro needs to deepen.
:22:50. > :22:56.They need a fiscal union, other things. And are they up to it?
:22:56. > :23:00.Gillan Tett, do you think they are up to it? They certainly haven't
:23:00. > :23:03.shown themselves to be up to it until now. I spent some time in
:23:04. > :23:06.Washington earlier this week, one of the things that is really
:23:06. > :23:10.frustrating members of the US administration, is that, in many
:23:10. > :23:14.ways, Europe has got the money it needs to solve the problem, as Paul
:23:14. > :23:18.said, the roadblock really lies with Germany, and much hinges on
:23:18. > :23:21.that relationship between Obama and Merkel. The problem though is I
:23:21. > :23:25.don't think the Americans do have the moral authority to force the
:23:26. > :23:32.Europeans to do very much, because not only is America still perseed
:23:32. > :23:36.by many Europeans as having started the whole financial crisis back in
:23:36. > :23:40.2007/08, but America hasn't even paid its dues up properly to the
:23:41. > :23:43.IMF. The idea of America orchestrating an IMF deal and
:23:43. > :23:46.having the moral authority isn't that strong. That is scary,
:23:46. > :23:51.actually there is nobody really in charge with the moral authority to
:23:51. > :23:54.force a quick solution. America doesn't have the moral
:23:54. > :23:58.authority because they started the whole mess? I think that is right.
:23:58. > :24:01.It is very hard for President Obama to lecture the Europeans.
:24:01. > :24:05.lecture the Germans in particular. What the Europeans say, we had this
:24:05. > :24:10.thing, it was growing, we needed time and you didn't give it to us,
:24:10. > :24:15.you had a financial crisis. Elmar Brok, what do you think about being
:24:15. > :24:19.lectured to about having, in a sense, too much fiscal rectitude,
:24:19. > :24:26.you have to loosen your stayshand over some money? It is not a
:24:26. > :24:29.question of that, or that strategy, it has to be combined. This crisis
:24:29. > :24:36.is the second peak of a crisis that came in because of the financial
:24:36. > :24:40.market from the United States in 2007/08. We have to move for growth,
:24:40. > :24:44.have clever ring-fencing, that we tried to build via the EFSF,
:24:44. > :24:51.together with the IMF, we have to look for structural changes in the
:24:51. > :24:56.countries, both in the economic and fiscal side. Isn't the problem,
:24:56. > :25:02.there is no money, the trillion euro fund isn't there, the IMF deal
:25:02. > :25:05.is sorted out, and the European Central Bank, is it going to be the
:25:05. > :25:10.main player? The European Central Bank has helped until now, the EFSF
:25:10. > :25:14.is still there, it has the money there, we have to see how this can
:25:14. > :25:19.be strengthened to have more money for that. It has only a credibility.
:25:19. > :25:22.If you have the structural changes in countries, there is more
:25:22. > :25:27.productivity and competitiveness. If you do that together we wouldn't
:25:27. > :25:33.have the same problem. Do you think the IMF deal might be the best show
:25:33. > :25:37.in town? The IMF is certainly one possibility. But as I say, one of
:25:37. > :25:40.the problems is, unfortunately people look at Europe and say
:25:40. > :25:45.inside the eurozone as a whole there is enough money to solve the
:25:45. > :25:49.problem, why do they need to turn to the IMF, because of internal
:25:49. > :25:53.structural blockages. That is the issue. The real scary thing about
:25:53. > :25:57.the crisis s not until Breton wood collapsed four decades ago, have we
:25:57. > :26:01.had a situation where there is nobody in charge and trying to
:26:01. > :26:05.resolve it, neither the IMF or the US, and probably not the Germans
:26:05. > :26:08.either. It is interesting about the Brazilian position, you are in
:26:08. > :26:12.better shape, would you contribute, do you think, to an increased
:26:12. > :26:14.amount of money in the IMF, to be placed within the different
:26:14. > :26:19.European countries? Well the Brazilian authorities have already
:26:19. > :26:24.mentioned that they are willing to do so, they are concerned about the
:26:24. > :26:32.issue. Obviously it would look much better for the markets if Europeans
:26:32. > :26:36.could solve the issue. We are prepared to contribute to a fund
:26:36. > :26:40.with the emerging countries and all the IMF. The Singapore Prime
:26:40. > :26:49.Minister and the Japanese certainly not, you don't trust the European
:26:49. > :26:55.institutions, as such, to handle any money to which you might give
:26:55. > :26:59.them, but you do trust the IMF? have been dealing with the IMF from
:27:00. > :27:04.the other end for quite a while. We have the experience. It is
:27:04. > :27:07.interesting now, isn't it, of course it is the old Colonial
:27:07. > :27:13.countries that are suffering, and the colonised, who are doing very
:27:13. > :27:18.well, and we are having to go cap- in-hand to them? I think even if
:27:19. > :27:22.the IMF comes in with the money, it won't be of a scale to do anything
:27:22. > :27:29.but provide a fig leaf for the European Central Bank to step in.
:27:29. > :27:33.They talked about a Baz zook ka, this is more like a - bazooka, this
:27:33. > :27:37.is more like a sling shot. So the European bank should get behind the
:27:37. > :27:40.bailout? This is all cover for them. Is that the announcement, this is
:27:40. > :27:45.to give the European Central Bank cover to come in behind the
:27:45. > :27:49.bailout? I think, first of all, we have to see that the union Central
:27:49. > :27:53.Bank has done a lot and will do a lot, that is not the first priority.
:27:53. > :27:57.We have to use other mechanisms, which were decided in the last
:27:57. > :28:06.summit. We have to say it is not just a Europe problem, Britain has
:28:06. > :28:10.higher inflation rates and more unemployment. Japan has double the
:28:10. > :28:14.debts, and the United States has higher than the eurozone. To just
:28:14. > :28:18.put the blame on the eurozone is the totally wrong approach. Here we
:28:18. > :28:28.have to see that everyone has responsibility, and everyone has
:28:28. > :28:29.
:28:29. > :28:33.problems, and not the same problems. Wech to co-operate in that - we
:28:33. > :28:39.have to co-operate in that vain and not just blame the eurozone for
:28:39. > :28:43.that crisis, it didn't part there. Can you see Greece leaving the
:28:43. > :28:50.eurozone? For sure it is a possibility, but not a favourable
:28:50. > :28:55.possibility. I have the feeling that this was going on in Greece
:28:55. > :28:59.and it would be helpful to have a broader majority to carry out the
:28:59. > :29:02.structural changes to bring Greece back to the growth side. Let's look
:29:02. > :29:06.at the shape of the eurozone. It is very possible that Greece will go,
:29:06. > :29:11.Ken Rogoff, can you see over the next five or ten years, the shape
:29:11. > :29:15.of the eurozone changing? I think it is a big wild card, I don't know.
:29:15. > :29:20.I think there is a good chance, at least two or three of the smaller,
:29:20. > :29:25.periphery countries, within five years, will at least have a
:29:25. > :29:28.temporary access to the eurozone. The big question is Italy, if they
:29:28. > :29:32.don't save Italy they won't save France. The structural flaws, I
:29:32. > :29:35.don't think it is discussed enough, we needing to to much deeper
:29:35. > :29:40.constitutional changes. I think they can talk about temperising,
:29:40. > :29:44.and buying time, it is a bridge. They have had a 20-40 year plan,
:29:45. > :29:49.but it has to happen much faster. This is all about keeping Italy on
:29:49. > :29:53.board? It really is all about keeping Italy on board at the
:29:53. > :29:56.moment. Coming from a country like America, which had a civil war to
:29:56. > :30:01.create, eventually, a fiscal union and single currency, the Americans
:30:01. > :30:06.know what you need to make a single currency work, many American
:30:06. > :30:12.traders, sitting here in work, have long been cynical about whether the
:30:12. > :30:15.Euro-zon could hang together and the structural flaws to be overcome.
:30:15. > :30:18.At the moment it is all eyes on Draghi, the European Union is
:30:18. > :30:23.crucial, will Draghi be so constrained by his Italian past,
:30:23. > :30:26.that he feels he has to be more Germany than the Germans, or is he
:30:26. > :30:32.willing to roll the dice and be bold and try to take measures of
:30:32. > :30:37.the sort Ken is talking about, to try to underwrite the eurozone
:30:37. > :30:41.project. And will Germany tolerate that?
:30:41. > :30:44.The whole thing is, we are in a position where Britain outside the
:30:44. > :30:48.eurozone can be asked to pony up to make sure actually the eurozone
:30:48. > :30:52.keeps tight and together, and that Italy doesn't drop out. It might be
:30:52. > :30:57.the British tax-payers are being asked, do you think, what in the
:30:57. > :31:03.order of billions to the IMF? Britain's going to have some very
:31:03. > :31:06.nasty choices to make, the tectonic plates are shifting fast. Europe is
:31:06. > :31:13.at a cross roads, break apart or tighter fiscal union. The question
:31:14. > :31:19.is, where does Britain stand in that? For Britain, it is a very
:31:19. > :31:25.difficult position as well, isn't it? Yeah, but the stakes here are
:31:25. > :31:28.just enormous. A few billion dollars, ten billion dollars is a
:31:28. > :31:32.minor amount compared to the scale here. I don't know that the IMF is
:31:32. > :31:36.the right way, it is not all about the money. Do you think the
:31:36. > :31:44.eurozone is something that is worth saving? We have no doubt about that.
:31:44. > :31:47.It has become a fundamental part of Europe, I think without that, much
:31:47. > :31:52.as it would be lost as well. Politically and economically, why
:31:52. > :31:55.do you think it is so important it stays together? Europe, is still
:31:55. > :32:00.the largest economic block in the world. It will effect the whole
:32:00. > :32:05.economy, there is no immunity, Brazil is well prepared but not
:32:05. > :32:09.immune. We are very much rooting for political decisions, because
:32:09. > :32:14.the tools are there. We witness perhaps a lack of political
:32:14. > :32:18.decisions to make that work. While David Cameron and George
:32:18. > :32:21.Osborne thrash out the economics in Cannes, the politics of it here at
:32:21. > :32:27.home are no less complicated, and potentially explosive for the
:32:27. > :32:32.coalition. In a moment I speak to Matthew Hancock, the Tory MP and
:32:32. > :32:36.one of George Osborne's closest allies. First my correspondent is
:32:36. > :32:40.with me. Are British tax-payers going to have to foot the bill for?
:32:41. > :32:50.At the moment it is a possible. Your fascinating discussion was
:32:50. > :32:55.laceed with that scenario, that the IMF would have to come in and prop
:32:55. > :32:58.up the euro. Britain would be there and in there for 4.5% of the fund,
:32:58. > :33:01.underwriting it rather than up front. George Osborne and doom I
:33:01. > :33:05.don't know have made it clear from the begin - damp I don't know, made
:33:05. > :33:10.it clear from the beginning, if - David Cameron, made it clear from
:33:10. > :33:16.the beginning if that happened it wouldn't be to support a currency,
:33:16. > :33:19.the idea of the IMF is to support countries, and with strict
:33:19. > :33:21.regulation about drawing down deficits and getting public
:33:21. > :33:27.spending under control. On Conservative and Labour sides,
:33:27. > :33:31.there is suspicion that those kind of controls will be fudged in any
:33:31. > :33:34.bailout, in order to get the money flowing. Several MPs are suggesting,
:33:34. > :33:39.for example, Christine Lagarde, in charges of the IMF at the moment,
:33:39. > :33:44.is not the right person. Too recently the French finance
:33:44. > :33:49.minutesor to be disassociated with the fate of the euro. Colin
:33:49. > :33:53.Carswell, a Conservative backbencher I spoke to today, -
:33:53. > :33:59.Douglas Carswell, a Conservative backbencher I spoke to today, said
:33:59. > :34:03.things are not what they seem Ministers need to start levelling
:34:03. > :34:07.with the British people, they want to transfer money from Britain to
:34:07. > :34:12.the IMF to help eurozone basket cases. Ministers should be honest
:34:12. > :34:16.and say so, and stop trying to hide behind clever words. That is what
:34:16. > :34:20.they want to do, but the question is, should parliament, the guardian
:34:20. > :34:24.of the people's months, allow them to do so. If there is a vote in
:34:24. > :34:28.parliament what will be the outcome be? It is not the biggest question
:34:28. > :34:35.in Downing Street, but it is a question. How many of the
:34:35. > :34:39.Conservative MPs rebelled on the referendums would join Douglas
:34:39. > :34:44.Carswell involving any extra British contribution to the IMF.
:34:44. > :34:48.Another big question is how would Labour respond, they did vote
:34:48. > :34:53.against Britain increasing its contributions to the IMF, recently,
:34:53. > :34:57.in July. Ed Balls has made a statement tonight saying unless the
:34:57. > :35:01.ECB is willing to become the lender of last resort, they have weird
:35:01. > :35:06.that tonight that they won't do that, they would find it difficult
:35:06. > :35:11.to support such a measure. joined by Matthew Hancock, who is
:35:11. > :35:15.close to George Osborne, it is a bit of a mess this decision over
:35:15. > :35:19.the IMF. On the one hand David Cameron is saying let's get behind
:35:19. > :35:23.putting more money into the IMf and then saying the money into the IMF
:35:23. > :35:28.will not be targeted towards any euro fund. Give us the clear
:35:28. > :35:35.position on this? It is very clear and as follows. The Government has
:35:35. > :35:40.got Britain out of having to be in the eurozone bailout. That was a
:35:40. > :35:45.very important step to make sure we haven't given money in the last
:35:45. > :35:49.bailout of Greece, a few months ago, then, of course, we are members, we
:35:49. > :35:53.are founder members of the IMf countries around the world are. As
:35:54. > :35:59.David - IMF, countries around the world are. Britain's contributions
:35:59. > :36:04.to that are under 5%. They are a significant, but a global solution.
:36:04. > :36:08.What we are locking for here what Ken Rogoff said was important. He
:36:08. > :36:15.said this is more than just about the debt, it is about confidence
:36:15. > :36:21.too. Being able to that. 45 billion, could we be asked for that much
:36:21. > :36:25.more? These are commitments. Nobody has ever lost any money by putting
:36:25. > :36:34.money into the IMF. I will explain why. The point of the IMF is when
:36:34. > :36:39.it goes into a country, because it has the back ing of the whole world.
:36:39. > :36:42.Then - backing of the whole world, never yet have markets managed to
:36:43. > :36:49.battle against T it is about confidence. Of course it is about
:36:49. > :36:55.confidence. Imagine the British taxpayer has asked by - been asked
:36:55. > :36:59.to put up a lot of money. And then it is in Italy, groz, Portugal and
:36:59. > :37:02.Ireland, and it is managed, what if it isn't about getting the money
:37:02. > :37:07.back. Do you honestly think the Conservative backbenchers will vote
:37:07. > :37:13.for this? I think Conservative backbenchers will vote for keeping
:37:13. > :37:17.the world economy afloat, which ensuring the IMF has the fire power
:37:17. > :37:27.to instill confidence make sure that around the world, when
:37:27. > :37:33.countries go bust. No countries revolting against this? I didn't
:37:33. > :37:36.say all of them. If it comes to the IMF, should Britain be part of the
:37:36. > :37:42.IMF and the global international community, or should Britain alone
:37:42. > :37:46.walk away from that. I think we should be part of the solution.
:37:46. > :37:51.the IMF and whatever happens there happens? This money has never been
:37:51. > :37:55.lost before, most importantly, you don't put the money in, it is
:37:55. > :38:01.contingent. You say you are paying your dues. We are in a new world.
:38:01. > :38:07.You say we are part paying our dues to be part of the global economy.
:38:07. > :38:13.If you live in major city in the US or elsewhere in the world. Chances
:38:13. > :38:17.are you have encountered the protests protesting against the
:38:17. > :38:20.major banks. How should the political mainstream respond, we
:38:21. > :38:24.will discuss it in a moment, with the author he was arrested in the
:38:24. > :38:29.name of the cause, not Matthew Hancock who wasn't. A quick record
:38:29. > :38:33.now on the Occupy movement. The Occupy movement protestors, who
:38:33. > :38:38.have been camped outside Wall Street since September, and several
:38:38. > :38:45.major capitals in recent weeks, have been ridiculed by commentators
:38:45. > :38:50.by its funny looks, gestures and incoherent demands. The media keep
:38:50. > :38:55.watching. The arrest of high- profile sympathiesers like Naomi
:38:55. > :39:04.Wolf, author, increasingly too the politicians around the world will
:39:04. > :39:08.respond to the movement. protestors are giving voice to a
:39:08. > :39:15.more broadcast frustration about how the financial system works.
:39:15. > :39:21.looks like the Occupy movement is breathing new light into the issues
:39:21. > :39:24.of tax and fairness, its slogans are seeping into the mainstream.
:39:24. > :39:29.The Prime Minister says we are all in it together, but he lets the
:39:29. > :39:34.top% get away with it, while the other 9% see their lifg standards
:39:34. > :39:44.squeezed and lose their jobs. basic message is a simple one and
:39:44. > :39:52.
:39:52. > :39:58.A question arises, what next for the Occupy group, do the protestors
:39:58. > :40:04.of St Pauls have a louder voice where they are as an incertificate
:40:04. > :40:09.rexist movement. Or is it time to come in from the cold, and like the
:40:09. > :40:15.Tea Party, learn to take part in the political system to deal with
:40:15. > :40:20.power. Matthew Hancock is with us, and also Naomi Wolf, author for
:40:20. > :40:29.Give Me Liberty, she was arrested last monthburg The Wall
:40:29. > :40:35.demonstration. As we have - as month for the Wall Street
:40:36. > :40:41.Occupation. Is it a mistake? It is a shame to say it that way. What I
:40:41. > :40:45.have heard from the movement members that it is military police
:40:45. > :40:48.officers, teachers, truckers, home makers. What people have to
:40:48. > :40:51.understand, or what the elites don't understand yesterday, is
:40:51. > :40:56.ordinary people all over the world are becoming aware that left and
:40:56. > :41:02.right are parts of a false par dime, and what is really happening
:41:02. > :41:06.globalty, dr pardigm, and what is really happening throughout the
:41:06. > :41:11.world is these people are deciding what happens to resources without
:41:11. > :41:14.consultation, and the rest of us. What the occupy movement is,
:41:14. > :41:17.certainly Americans across the political spectrum waking up and
:41:17. > :41:20.saying this is supposed to be a Republic and we are supposed to
:41:20. > :41:24.have a voice. This is playing on all your houses? I certainly agree
:41:24. > :41:29.that the voices coming out aren't particularly left or right. For
:41:29. > :41:33.instance, one of the big complaints the Occupy movement has is against
:41:33. > :41:40.rewards for failure, which we have seen across so much of the
:41:40. > :41:44.financial system. And wars that politicians have failed to cut off?
:41:44. > :41:48.Absolutely. You are one of them? I'm a newly elected politician. One
:41:48. > :41:52.of the interesting things here is that the left and the Labour Party
:41:52. > :41:57.have admitted that they got this wrong for an awfully long time. And
:41:57. > :42:03.what we're trying to do is deal with some of these problems. Wait a
:42:03. > :42:11.minute, let's go into specifics here. Briefly, nationalised bank,
:42:11. > :42:14.RBS, Steven Hestor still taking how many millions? Absolutely, his
:42:14. > :42:18.contract was signed off by the previous Government, including a
:42:18. > :42:23.cap for the year they were in office, and no cap for the year
:42:23. > :42:28.after election. It is broader than just one person. Here, hold on, let
:42:28. > :42:31.me explain. Is it answering a need, do you think the Occupy Movement is
:42:31. > :42:37.answering a need, it is answering a failure in mainstream politics to
:42:37. > :42:42.give people a voice? The Occupy Movement, I think, is raising
:42:42. > :42:47.mainstream questions. That is certainly true. The difficult thing
:42:47. > :42:52.though is providing the answers that don't in themselves kill off
:42:52. > :42:56.the system that is around the world the most, hold on, the system that
:42:56. > :43:00.around the world has brought billions out of poverty. Matthew,
:43:00. > :43:04.you are saying this is the right system and we should just, for
:43:04. > :43:10.instance, hand over another 45 billion, trillion, what was it? I
:43:10. > :43:14.don't hear the voices of the people in St Paul's, or in the park or in
:43:14. > :43:21.Athens, participating in this conversation at all. What I want to
:43:21. > :43:24.say to you is many millions of people are saying you may not be
:43:24. > :43:28.the experts, and we are entightedled to be part of the
:43:28. > :43:31.decision manufacture make - entitled to be part of the
:43:31. > :43:35.decision-making process, and the parts of the system that don't work
:43:35. > :43:40.should be killed off. People do vote and vote for political parties.
:43:40. > :43:46.Are you saying in the same way ats Tea Party has done, is what you
:43:46. > :43:49.want to see is the mainstream forming itself into a more
:43:49. > :43:53.formallised political revolution. The founding fathers intended that
:43:53. > :43:58.citizens should run their own Government. If you saw the demands
:43:58. > :44:01.the protestors made. People in the media keep saying where are the
:44:01. > :44:05.demand, they are on my Facebook page. I have them in my purse. They
:44:05. > :44:08.are not hard to find the they are very mainstream demands, they are
:44:08. > :44:14.sensible, things like get money out of politics. Here in Britain too,
:44:14. > :44:17.you have a problem with lobbyists, and military profiteers, hijacking
:44:17. > :44:21.the decision-making process in parliament. I asked one of the
:44:21. > :44:26.producers what is the pressure point for British citizens sitting
:44:26. > :44:32.in St Paul ae, watching tonight, to exert pressure on representatives,
:44:32. > :44:37.it is not that case easy, there are not that many points of - easy,
:44:37. > :44:43.there are not that many points of pressure. We ask to where does do
:44:43. > :44:49.the people's vote he is come in - does the people's voice come into
:44:49. > :44:54.it, do we wait outside people's apartments. Do you want to see
:44:54. > :44:58.people in the Tea Party, they came by a different route, they were
:44:58. > :45:04.Republicans many of them, would you like to see Occupy, to be a
:45:04. > :45:09.political force in the UK? They are lucky in the UK to have a democracy.
:45:09. > :45:13.So does the United States? Across the world and Arab world, people
:45:13. > :45:18.are literally fighting to have a democracy. I think it would be
:45:18. > :45:22.terrific if some of the eloquent people in the Occupy movement,
:45:22. > :45:27.stood for parliament and got elected and work out solutions to
:45:27. > :45:33.these problems to make sure that the benefits of prosperity get
:45:33. > :45:40.spread more evenly throughout society. Of course protest, I'm a
:45:40. > :45:45.vigorous defender of free speech, and like that fact. Martin Luther
:45:45. > :45:48.King had the right idea, you create massive pressure movement, a grass
:45:48. > :45:53.roots movement, it creates pressure on the system then you send in
:45:53. > :45:57.representatives to reform the system. I have been advocating for
:45:57. > :46:02.Occupy protestors to start creating e-mail lists, raising money,
:46:02. > :46:07.registering voters, and to be a block. If they were a political
:46:07. > :46:14.block in Britain they could set an agenda. You would have to talk to
:46:14. > :46:18.them. Anybody can write to me and I reply to every single piece of
:46:18. > :46:24.correspondence. Thank you very much. Next, Newsnight will be taking an
:46:24. > :46:31.indefpt look at the human brain. Asking - indepth look at the human
:46:31. > :46:35.brain. Here is a flavour of the first of our films.
:46:35. > :46:38.For decades mental illness has been beyond our understanding. Now
:46:38. > :46:42.scientists think we are on the verge of a revolution. This is what
:46:42. > :46:49.it's all about, the human brain. Scientists are beginning to
:46:49. > :46:59.understand how the brain works, and what makes it go wrong.
:46:59. > :47:27.
:47:27. > :47:33.That's all from Newsnight tonight, Emily will be here tomorrow, I will
:47:33. > :47:43.be on after with Review discussing new books from Steven King and Joan
:47:43. > :48:01.
:48:01. > :48:04.Didian. This weekend it will be sunny for
:48:04. > :48:08.some. Wet for others. As far as tomorrow's concerned, most of the
:48:08. > :48:12.rain will be across England and Wales. Fairly heavy intense
:48:12. > :48:15.downpour, locally it could be quite nasty, a lot of surface water and
:48:15. > :48:18.spray around. Getting the detail will be difficult. The idea is some
:48:18. > :48:23.really intense showers across many parts of the England through the
:48:23. > :48:27.afternoon is valid. Slow-moving as well. Brighter spells and still
:48:27. > :48:31.mild, 17 degrees in London. Nasty showers across the West Country too.
:48:31. > :48:35.Warnings have been issued, but western most parts, that is to say
:48:35. > :48:38.parts of west Devon, Cornwall and western parts of Wales, probably
:48:38. > :48:42.avoiding the Washington Post of the showers. Some places here staying
:48:42. > :48:46.dry, winds light. The best of the sunshine will be further north and
:48:46. > :48:50.west, Northern Ireland having a lovely day, it should stay dry and
:48:50. > :48:53.bright, with light winds, 13-14 degrees. Western parts of Scotland
:48:53. > :48:58.not doing too badly, a scattering of showers further east across
:48:58. > :49:05.Scotland with a fair bit of cloud as well. Going into the weekend it
:49:05. > :49:10.is northern parts of the UK staying dryest and brightest, noon too warm,
:49:10. > :49:14.patches of fog. It is in the south where we will keep the rain clouds
:49:14. > :49:17.going, some of the showers prolonged a school broz from the