03/11/2011 Newsnight


03/11/2011

News analysis with Kirsty Wark. Pressure is mounting on Greek Prime Minister George to resign and make way for a coalition government. What next for Greece and the eurozone?


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Transcript


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It's turning into a Greek tragedy. Papandreou's plan to give the

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people a say is almost certainly finished and he could soon be too.

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The Euro-crisis could be about to claim the Greek Prime Minister, we

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are live in Athen tonight. It has indeed been a day of high political

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drama in police. With the Prime Minister, George Papandreou,

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apparently wavering between trying to save his own job, and save the

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referendum on the Euro-bailout upon which he has staked his reputation.

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In Cannes, heads of Government are desperately trying to come up with

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a new to try to stop contagion spreading across the globe, which

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could include British taxpayer guaranties. We will hear from Paul

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Mason at the G20, we will have views from America, Brazil and

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other places on how to prevent crises throughout the world. We

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will have the reaction from one of the Chancellor's closest allies.

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How the Occupy protests on Wall Street and around the world already

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are changing the political conversation and what happens next.

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We will speak to one of their most famous protestors, Naomi Wolf.

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After day of extraordinary turmoil, it now looks as though Greece could

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be heading for a new coalition Government. The Greek Prime

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Minister, who was sent home from Cannes last night, his tail between

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his legs, will almost certainly give up on his attempts to hold a

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referendum and may well have to leave office himself. Tonight he's

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clinging to the wreckage of his political career, waiting for a

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vote of confidence tomorrow, with the bailout and the country's place

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in the eurozone far from certain. Our diplomatic editor, Mark Urban,

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joins us from Athen. George Papandreou became back from that

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meeting in Cannes, boxed in to an extraordinary degree, the faces of

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the political prison, the suffering of the Greek people under the

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austerity measure, the outrage of the international community at his

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call for a referendum on EU bailout package. Then the problems within

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his own party and the difficulty of achieving any sort of meaningful

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political dialogue with the pop significance here. As the day wore

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on - opposition here, as the day wore on he was railing in that cell

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of political idea days. At times his actions defied any

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inperpretation, the Greek press corp are puzzled by the lines

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coming out of his office and party. Little by little things became

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clearer. He hasn't gone today, he faces this vote of no confidence

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tomorrow night. His political opponents are going to play it

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right up to the wire, I think. They are not going to make it easier for

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him. The dilemmas he will face and the choices he will make over the

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last 24 hours did at least clarify some what as the day progressed.

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This country is locked in stand-off with the European Union and its

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leading players. Throughout today members of the parliament were

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coming and going, trying to understand who would prevail. But

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one thing seemed clear, that either George Papandreou, or his plan for

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a referendum, would not survive the day.

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Opposition members said the Government had to go at once.

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risk is that people don't believe that democracy works. And they have

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to feel that they are represented, right now there is not the right

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representation. When they were voting in the last elections they

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don't feel they are represented today. The Prime Minister himself

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returned from a trip to see the leaders of German and France, what

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was uncomfortable, to put it mildly, they told him Greece couldn't

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remain in the euro it rejected last week as bailout, and couldn't even

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think of rejoining for ten years. Threats delivered in France could

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be felt even in this suburb of Athens, where academic researchers

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were demonstrating. They have lost their jobs under existing austerity

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plans. And they are angry that further help is dependant on even

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more pain. All these austerity measures were taken without asking

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the Greek people. Actually the Greek people should be referred to

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before the austerity measure, they should be referred to for a number

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of things. This has not happened, and of course this is not good for

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our dignity. There are so many grievances here now that the

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academics got upstaged by High School students sitting in the

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hidle of the road, they want to save their school - middle of the

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road, they want to save their school, arguing if their education

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isn't safe, nothing is. I don't think we have dreams for the future

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in this country. It is really bad for us, it is awful for us.Under

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That type of internal, as well as external pressure, many expected

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this morning a Changing of the Guard, a prime ministerial

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resignation. His own Finance Minister today fell out of step,

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dropping support for the referendum. How could Mr Papandreou stay? The

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parliamentary maths are absolutely vital to Mr Papandreou, and the

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signs are, in recent hours, that the numbers are finally slipping

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away from him. He was going to talk to his Socialist Party MPs about

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now in there to try to rally their support, instead we have heard he's

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heading for the President's office, either to resign or to offer to

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form a coalition Government. So, Greek TV staked out the President's

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office, reporting the Prime Minister was on his way to resign.

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But pretty soon chaos reined in newsrooms and on air. Mr

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Papandreou's office said he wouldn't visit the President and

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would address his Members of Parliament at 5.00.

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The media circus moved back to parliament, we caught up with one

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of those socialist MPs, whose support for her leader is wavering.

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Right now we need a new Government that will get us back on track, and

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we have to face all the new deal of the 26th of October. So it is up to

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us and the leaders to take a step back and try to make the deal work.

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If he found a solution, we can make it, of course we can, we have one

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month to decide, that but instead of the referendum we have to find a

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new solution. So, is it possible, do you think,

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he will still be Prime Minister on Saturday with everything you have

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just said about the referendum? don't know that. The problem is

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that we don't need elections now, we don't need a referendum now, we

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just need a Government that will take us out of this crisis.

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evening is coming on now, and one thing is clear, which is that Mr

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Papandreou is going to fight, he's still trying to hold his party

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together, and he's prepared to manoeuvre engettically to save

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himself and his Government. - ener gettically, to save himself and his

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Government, it is even, according to some of his MPs, prepared to

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drop the idea of a referendum on the bailout. Inside he implied that

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the way out of this crisis was for the opposition to join him in

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:07:58.:08:02.

supporting the bailout, so making a referendum unnecessary.

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TRANSLATION: Opening the conversation on the bailout revived

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everyone, and brought political shock to this country.

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Papandreou has bought himself another day, by offering to shelf

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the referendum, and build cross- party support for the EU's bailout.

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But there must still be a reckoning, and a confidence vote on the

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Government looms tomorrow. Joining me now from Athens is the communist

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party MP, Eva Kaili. Kood evening to you, in - good evening, in your

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opinion, will George Papandreou survive tomorrow? I think he's

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going to fall down. I think he's already an ex-Prime

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Minister, although he doesn't realise it. But when it comes to

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those two different things happening here, there will be the

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vote of confidence tomorrow night, but all the time, during the day,

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there will be the idea of perhaps some Government of National Unity,

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can you explain to us what you think might happen? There is only

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one way to have and guarantee national unity, this is the

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expression of the grok people. In democracy there is only - the Greek

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people, in democracy there is only one way, elections. If we have a

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caretaker Government, a caretaker Government, then it would be easier

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for everybody. We could have elections in less than four weeks.

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Did you hear your colleague in the PASOK party saying that you simply

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cannot afford to have more elections? I didn't hear the

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question, I'm sorry, I'm outside and there is a lot of noise, can

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you repeat the question, please. talked to one of your colleagues in

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the PASOK party, who said you can't afford to have elections? Why? Why

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is it so exopinionsive to have elections. Why is it so expensive

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to be in a European Union where no- one, Portuguese, Spaniards, Germans,

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and Greeks are not happy. The majority of the people, the

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majority of the working-class, the every day people, they lose money,

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they lose hope, they lose trust, so what is the purpose of insisting in

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a case that does not, cannot afford elections. It is impossible to

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understand that Kirsty. It is impossible, why in a democracy, or

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in a democratic union, that wants to face the 21st century, not in

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the terms of being Chinese salaries, and Indian income, in Europe, of

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the 21st century, after two world wars, after fighting against Nazis

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and fascists, how can we survive? Do you think if there was a

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coalition Government or Government of National Unity, then Greece

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would simply have to bite the bullet and accept the bailout,

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accept the terms of the bailout? Two years ago Greeks voted for a

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Government that said there is money. Now they find out that when this

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Government was telling them there is money, they meant the money

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everybody had in his pocket, or in his pension, or in his studies or

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in his future. If you are a Greek, you were born here, just the first

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day of your life, you would owe to the markets up to 100 though euros.

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How many babies can you bear. is the answer, is the answer to

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simply leave the euro, what is the answer? The answer can be given

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only by the Greek people. And I'm not arrogant enough, being one

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person, here, to express the future will of the Greek people. Let's

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hear the expression of your own will, as an MP you have an opinion

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on this, I wonder as an MP whether or not you think Greece is better

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inside the euro or outside the euro? As an MP, I believe, that the

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future of my country is outside this kind of Europe. I think I

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belong to the most European party, but when I say Europe, when we say

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Europe, we mean people's Europe. We don't mean markets' Europe. We

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don't mean the price of my life being the same way up and down,

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somebody is making money. If you are not in this euro, who will bail

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you out next time, what will happen to Greece? Look, what's going to

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happen to Greece, I think that people will become, in a few years,

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richer than they are now. They can have their own deals, and they

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won't be in danger of losing parts of the country. You know, we don't

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produce tulips here, we are not in a very peaceful part of Europe. We

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are very close to the Middle East, and we are very close to the fusion

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that is needed and the whole thing can explode into a war when you

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have imperialist antagonisms. just to be quite clear then here,

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you think that Greece can survive, and be much more economically sound

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on its own? It has been proven throughout the years. Thank you

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very much. The Greek crisis has hijacked the

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G20 Summit in Cannes, where President Sarkozy, as President of

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the Group of countries this year, had hoped to lead world discussion

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ones trade, commodities and sustainable economic growth,

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instead he and Angela Merkel and other heads of state have been

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trying to work out how to stop the contagion spreading. And listen up,

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this could involve British tax- payers underwriting millions. Paul

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Mason is in Cannes. Paul, do they have a plan tonight to stop the

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contagion spreading? Greetings from the side show, starring the 20 most

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powerful people on earth. No, they don't have plan. What they have got

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is a kind of pass the parcel game, with the parcel being a piece of

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financial Semtex which is Italy's debt. Italy's debt, 6.5% borrowing

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costs today, the highest since the euro started. The original plan was,

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last week, to basically put sandbags around it, to continue the

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metaphor in the form of the EFSF, designed by the European Union, the

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bailout fund. That is defunct, because the Chinese don't want it,

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they don't trust the mechanism. What the Chinese and the British

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are pushing is for the IMF to pick up the par se. The problem with the

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IMF is the IMF is not just the euro. There is a question of

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responsibility. The IMF lends according to a quota, if you did

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the whole trillion, and I don't think you will do the whole

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trillion. If you did the whole trillion Britain would owe 45

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billion, notionly. The problem there is, that's not happening

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either. There is a big argument about it. Lots of people don't want

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to do it, as we will probably see later in the programme. Some Brits

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don't want to do it. In the end there is the European Central Bank.

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Its boss said we are cutting interest rates, new boss, newer

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attitude to interest rates. But he said it is not our job to pick up

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the parcel either, it is not in our remit. I have to say the bond

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markets believe it will, the bond markets believe that the European

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Central Bank will be forced to change its role and will pick up

:15:37.:15:47.
:15:47.:15:50.

the tab, simply because the others just can't. By this morning, Cannes

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was more about cote than azzure. Delegates woke to the realisation

:15:58.:16:03.

that Greece had well and truly rained on their parade. It was

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clear, that only the countries with cash looked anything like confident.

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Here, deep inside the security zone, at the hotel the leaders are

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staying in, they are flabbergasted. They came here to a summit to sort

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out the strategic problems of the world, instead they are dealing

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with the problems of a small country that could quite easily

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blow up the euro. He has offered his resignation, I

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think. As the Greeks ditered, the leaders in Cannes pressed the flesh

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and looked grim. The presence of Mr Berlusconi in the room a reminder

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of the real problem, the southern part of Europe is bust, and the

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deal agreed last week to sort that out, hasn't happened. To find the

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trillion dollars needed, Europe must go cap in hand to the emerging

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world. TRANSLATION: It is not that I'm trying to hide anything, but

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there are a lot of players around the table. Our main aim is to come

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up with something credible, ambitious and fast. But what? Of

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the 20 countries represented here, only the following have actual cash.

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The big emerging economies, and the exporters, above all, China, have

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low and managable debts. At the other end of the scale, Japan,

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Italy and the USA have debt in excess of 100% of GDP. Suddenly,

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for the first time, it begins to matter how the world looks to these

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creditor countries, and it does not look good. This is the Prime

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Minister of Singapore, his country has a permanent place at the G20

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table, because it has money. So could they help? The IMF, if it

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needs more resources, will have to depend on the participation of all

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of its members N that context Singapore will do our part. I don't

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think you can expect any white Knights to ride to the rescue. We

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are past the white Knights age now. What do you mean by that?

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country is going to say I feel I will come and I will sacrifice

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myself in order to put out somebody else's fire. There are good

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intentions expressed, we want to build up a trillion dollar fund,

:18:20.:18:26.

and the EFSF, or we want to recapitalise the banks another 100

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billion euros. How will you do that, what is the specific plan and not

:18:31.:18:36.

just the intention. That part has to be fleshed out, I'm sure that -

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I'm not sure that can be done, not just fleshed out, beefed up. You

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need more fire power to convince everybody, including yourselves,

:18:44.:18:48.

that you are going to defend this position and you can defend this

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position. Europe's new weakness, and America's recent troubles, have

:18:53.:18:56.

strengthened Asia's hand. Two years ago it would have been Japan and

:18:57.:19:01.

China getting it in the neck for currency manipulation. Now it is

:19:01.:19:07.

they who have come to do the Hardtalks, as Japan's Finance

:19:07.:19:11.

Minister - hard talking as Japan's Finance Minister made clear to me

:19:11.:19:18.

today. TRANSLATION: We can see the critical situation developing in

:19:18.:19:25.

the European economies, if there is contraction it could drive down the

:19:25.:19:30.

Asian economy quickly. I hope that Europeans can recognise that they

:19:30.:19:40.

have responsibility, visa advise the rest of the world. What is

:19:40.:19:44.

striking is the Asian powers who want to go beyond firefighting and

:19:44.:19:54.
:19:54.:19:54.

do strategy. Growth has to be part of the solution. If you are going

:19:54.:19:58.

to diminish unemployment and hold out hope for your people, you have

:19:58.:20:04.

to grow, and you have to have a plan to grow. That is what they

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were supposed to be discussing here, plan for growth. But this, crest

:20:09.:20:12.

fallen and be dragled summit, has been side tracked into crisis

:20:12.:20:22.

management and confusion. What is happening tonight, is there

:20:22.:20:26.

any way of resolving this thing that we discussed? Tonight there is

:20:26.:20:30.

an unofficial summit of the European Union, in one of the

:20:30.:20:34.

hotels, and the Americans. What could they be discussing? The

:20:34.:20:38.

problem here is, we spend day after day, hearing negative talk about

:20:38.:20:42.

Greece, and negative talk about the Italians and Berlusconi, but

:20:42.:20:49.

ultimately, at the heart of this problem, lie - lies Germany, that

:20:49.:20:53.

is the country that can't let go of the old institutions and the old

:20:53.:20:59.

role of the eurozone. The fiscal rectitude, the conservative

:20:59.:21:02.

European Central Bank. I think what is going on, only President Obama

:21:02.:21:07.

has the moral authority to say to Germany, Germany, we bailed you out

:21:07.:21:11.

in 1948, you have to just start changing your attitude, and allow

:21:11.:21:15.

some of this flexibility. Even within the EFSF, they fought a rear

:21:15.:21:19.

guard action against that. Every one of these firewalls we are

:21:19.:21:27.

trying to erect, EFSF, IMF, and ultimately ECB, alphabet soup, but

:21:28.:21:31.

very important, at every point the Germans are the sticking point. The

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discussion will be for the Americans to use their moral

:21:33.:21:36.

authority with Germany to say you have just got to give. Because

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otherwise, the clock is ticking. The Italian debt looks OK for now,

:21:43.:21:50.

it may be four or five days away from not looking OK. What does it

:21:50.:21:54.

mean? Italy becomes a ten-times bigger Greece. Make no mistake, if

:21:54.:21:59.

that happens in Italy, that will blow up the world financial system.

:21:59.:22:04.

Joining me now from New York is Gillan Tett, the assistant editor

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of the Financial Times. From washing en to I'm joined by Elmar

:22:09.:22:18.

Brok, joining me in the studio is bra stillalam bassor to the UK. And

:22:18.:22:21.

- Brazilian ambassador to the UK. And Ken Rogoff.

:22:21.:22:31.

First of all, you have been hearing about this maelstrom, are you

:22:31.:22:33.

confident they can stop contagion spreading? I'm not. The reason

:22:33.:22:37.

Greece is a problem is they don't have a plan for containing it. They

:22:37.:22:40.

are talking about building up this firewall, building up this big fund.

:22:40.:22:44.

It is a bridge, but a bridge to what? The euro needs to deepen.

:22:44.:22:50.

They need a fiscal union, other things. And are they up to it?

:22:50.:22:56.

Gillan Tett, do you think they are up to it? They certainly haven't

:22:56.:23:00.

shown themselves to be up to it until now. I spent some time in

:23:00.:23:03.

Washington earlier this week, one of the things that is really

:23:04.:23:06.

frustrating members of the US administration, is that, in many

:23:06.:23:10.

ways, Europe has got the money it needs to solve the problem, as Paul

:23:10.:23:14.

said, the roadblock really lies with Germany, and much hinges on

:23:14.:23:18.

that relationship between Obama and Merkel. The problem though is I

:23:18.:23:21.

don't think the Americans do have the moral authority to force the

:23:21.:23:25.

Europeans to do very much, because not only is America still perseed

:23:26.:23:32.

by many Europeans as having started the whole financial crisis back in

:23:32.:23:36.

2007/08, but America hasn't even paid its dues up properly to the

:23:36.:23:40.

IMF. The idea of America orchestrating an IMF deal and

:23:41.:23:43.

having the moral authority isn't that strong. That is scary,

:23:43.:23:46.

actually there is nobody really in charge with the moral authority to

:23:46.:23:51.

force a quick solution. America doesn't have the moral

:23:51.:23:54.

authority because they started the whole mess? I think that is right.

:23:54.:23:58.

It is very hard for President Obama to lecture the Europeans.

:23:58.:24:01.

lecture the Germans in particular. What the Europeans say, we had this

:24:01.:24:05.

thing, it was growing, we needed time and you didn't give it to us,

:24:05.:24:10.

you had a financial crisis. Elmar Brok, what do you think about being

:24:10.:24:15.

lectured to about having, in a sense, too much fiscal rectitude,

:24:15.:24:19.

you have to loosen your stayshand over some money? It is not a

:24:19.:24:26.

question of that, or that strategy, it has to be combined. This crisis

:24:26.:24:29.

is the second peak of a crisis that came in because of the financial

:24:29.:24:36.

market from the United States in 2007/08. We have to move for growth,

:24:36.:24:40.

have clever ring-fencing, that we tried to build via the EFSF,

:24:40.:24:44.

together with the IMF, we have to look for structural changes in the

:24:44.:24:51.

countries, both in the economic and fiscal side. Isn't the problem,

:24:51.:24:56.

there is no money, the trillion euro fund isn't there, the IMF deal

:24:56.:25:02.

is sorted out, and the European Central Bank, is it going to be the

:25:02.:25:05.

main player? The European Central Bank has helped until now, the EFSF

:25:05.:25:10.

is still there, it has the money there, we have to see how this can

:25:10.:25:14.

be strengthened to have more money for that. It has only a credibility.

:25:14.:25:19.

If you have the structural changes in countries, there is more

:25:19.:25:22.

productivity and competitiveness. If you do that together we wouldn't

:25:22.:25:27.

have the same problem. Do you think the IMF deal might be the best show

:25:27.:25:33.

in town? The IMF is certainly one possibility. But as I say, one of

:25:33.:25:37.

the problems is, unfortunately people look at Europe and say

:25:37.:25:40.

inside the eurozone as a whole there is enough money to solve the

:25:40.:25:45.

problem, why do they need to turn to the IMF, because of internal

:25:45.:25:49.

structural blockages. That is the issue. The real scary thing about

:25:49.:25:53.

the crisis s not until Breton wood collapsed four decades ago, have we

:25:53.:25:57.

had a situation where there is nobody in charge and trying to

:25:57.:26:01.

resolve it, neither the IMF or the US, and probably not the Germans

:26:01.:26:05.

either. It is interesting about the Brazilian position, you are in

:26:05.:26:08.

better shape, would you contribute, do you think, to an increased

:26:08.:26:12.

amount of money in the IMF, to be placed within the different

:26:12.:26:14.

European countries? Well the Brazilian authorities have already

:26:14.:26:19.

mentioned that they are willing to do so, they are concerned about the

:26:19.:26:24.

issue. Obviously it would look much better for the markets if Europeans

:26:24.:26:32.

could solve the issue. We are prepared to contribute to a fund

:26:32.:26:36.

with the emerging countries and all the IMF. The Singapore Prime

:26:36.:26:40.

Minister and the Japanese certainly not, you don't trust the European

:26:40.:26:49.

institutions, as such, to handle any money to which you might give

:26:49.:26:55.

them, but you do trust the IMF? have been dealing with the IMF from

:26:55.:26:59.

the other end for quite a while. We have the experience. It is

:27:00.:27:04.

interesting now, isn't it, of course it is the old Colonial

:27:04.:27:07.

countries that are suffering, and the colonised, who are doing very

:27:07.:27:13.

well, and we are having to go cap- in-hand to them? I think even if

:27:13.:27:18.

the IMF comes in with the money, it won't be of a scale to do anything

:27:19.:27:22.

but provide a fig leaf for the European Central Bank to step in.

:27:22.:27:29.

They talked about a Baz zook ka, this is more like a - bazooka, this

:27:29.:27:33.

is more like a sling shot. So the European bank should get behind the

:27:33.:27:37.

bailout? This is all cover for them. Is that the announcement, this is

:27:37.:27:40.

to give the European Central Bank cover to come in behind the

:27:40.:27:45.

bailout? I think, first of all, we have to see that the union Central

:27:45.:27:49.

Bank has done a lot and will do a lot, that is not the first priority.

:27:49.:27:53.

We have to use other mechanisms, which were decided in the last

:27:53.:27:57.

summit. We have to say it is not just a Europe problem, Britain has

:27:57.:28:06.

higher inflation rates and more unemployment. Japan has double the

:28:06.:28:10.

debts, and the United States has higher than the eurozone. To just

:28:10.:28:14.

put the blame on the eurozone is the totally wrong approach. Here we

:28:14.:28:18.

have to see that everyone has responsibility, and everyone has

:28:18.:28:28.
:28:28.:28:29.

problems, and not the same problems. Wech to co-operate in that - we

:28:29.:28:33.

have to co-operate in that vain and not just blame the eurozone for

:28:33.:28:39.

that crisis, it didn't part there. Can you see Greece leaving the

:28:39.:28:43.

eurozone? For sure it is a possibility, but not a favourable

:28:43.:28:50.

possibility. I have the feeling that this was going on in Greece

:28:50.:28:55.

and it would be helpful to have a broader majority to carry out the

:28:55.:28:59.

structural changes to bring Greece back to the growth side. Let's look

:28:59.:29:02.

at the shape of the eurozone. It is very possible that Greece will go,

:29:02.:29:06.

Ken Rogoff, can you see over the next five or ten years, the shape

:29:06.:29:11.

of the eurozone changing? I think it is a big wild card, I don't know.

:29:11.:29:15.

I think there is a good chance, at least two or three of the smaller,

:29:15.:29:20.

periphery countries, within five years, will at least have a

:29:20.:29:25.

temporary access to the eurozone. The big question is Italy, if they

:29:25.:29:28.

don't save Italy they won't save France. The structural flaws, I

:29:28.:29:32.

don't think it is discussed enough, we needing to to much deeper

:29:32.:29:35.

constitutional changes. I think they can talk about temperising,

:29:35.:29:40.

and buying time, it is a bridge. They have had a 20-40 year plan,

:29:40.:29:44.

but it has to happen much faster. This is all about keeping Italy on

:29:45.:29:49.

board? It really is all about keeping Italy on board at the

:29:49.:29:53.

moment. Coming from a country like America, which had a civil war to

:29:53.:29:56.

create, eventually, a fiscal union and single currency, the Americans

:29:56.:30:01.

know what you need to make a single currency work, many American

:30:01.:30:06.

traders, sitting here in work, have long been cynical about whether the

:30:06.:30:12.

Euro-zon could hang together and the structural flaws to be overcome.

:30:12.:30:15.

At the moment it is all eyes on Draghi, the European Union is

:30:15.:30:18.

crucial, will Draghi be so constrained by his Italian past,

:30:18.:30:23.

that he feels he has to be more Germany than the Germans, or is he

:30:23.:30:26.

willing to roll the dice and be bold and try to take measures of

:30:26.:30:32.

the sort Ken is talking about, to try to underwrite the eurozone

:30:32.:30:37.

project. And will Germany tolerate that?

:30:37.:30:41.

The whole thing is, we are in a position where Britain outside the

:30:41.:30:44.

eurozone can be asked to pony up to make sure actually the eurozone

:30:44.:30:48.

keeps tight and together, and that Italy doesn't drop out. It might be

:30:48.:30:52.

the British tax-payers are being asked, do you think, what in the

:30:52.:30:57.

order of billions to the IMF? Britain's going to have some very

:30:57.:31:03.

nasty choices to make, the tectonic plates are shifting fast. Europe is

:31:03.:31:06.

at a cross roads, break apart or tighter fiscal union. The question

:31:06.:31:13.

is, where does Britain stand in that? For Britain, it is a very

:31:14.:31:19.

difficult position as well, isn't it? Yeah, but the stakes here are

:31:19.:31:25.

just enormous. A few billion dollars, ten billion dollars is a

:31:25.:31:28.

minor amount compared to the scale here. I don't know that the IMF is

:31:28.:31:32.

the right way, it is not all about the money. Do you think the

:31:32.:31:36.

eurozone is something that is worth saving? We have no doubt about that.

:31:36.:31:44.

It has become a fundamental part of Europe, I think without that, much

:31:44.:31:47.

as it would be lost as well. Politically and economically, why

:31:47.:31:52.

do you think it is so important it stays together? Europe, is still

:31:52.:31:55.

the largest economic block in the world. It will effect the whole

:31:55.:32:00.

economy, there is no immunity, Brazil is well prepared but not

:32:00.:32:05.

immune. We are very much rooting for political decisions, because

:32:05.:32:09.

the tools are there. We witness perhaps a lack of political

:32:09.:32:14.

decisions to make that work. While David Cameron and George

:32:14.:32:18.

Osborne thrash out the economics in Cannes, the politics of it here at

:32:18.:32:21.

home are no less complicated, and potentially explosive for the

:32:21.:32:27.

coalition. In a moment I speak to Matthew Hancock, the Tory MP and

:32:27.:32:32.

one of George Osborne's closest allies. First my correspondent is

:32:32.:32:36.

with me. Are British tax-payers going to have to foot the bill for?

:32:36.:32:40.

At the moment it is a possible. Your fascinating discussion was

:32:41.:32:50.

laceed with that scenario, that the IMF would have to come in and prop

:32:50.:32:55.

up the euro. Britain would be there and in there for 4.5% of the fund,

:32:55.:32:58.

underwriting it rather than up front. George Osborne and doom I

:32:58.:33:01.

don't know have made it clear from the begin - damp I don't know, made

:33:01.:33:05.

it clear from the beginning, if - David Cameron, made it clear from

:33:05.:33:10.

the beginning if that happened it wouldn't be to support a currency,

:33:10.:33:16.

the idea of the IMF is to support countries, and with strict

:33:16.:33:19.

regulation about drawing down deficits and getting public

:33:19.:33:21.

spending under control. On Conservative and Labour sides,

:33:21.:33:27.

there is suspicion that those kind of controls will be fudged in any

:33:27.:33:31.

bailout, in order to get the money flowing. Several MPs are suggesting,

:33:31.:33:34.

for example, Christine Lagarde, in charges of the IMF at the moment,

:33:34.:33:39.

is not the right person. Too recently the French finance

:33:39.:33:44.

minutesor to be disassociated with the fate of the euro. Colin

:33:44.:33:49.

Carswell, a Conservative backbencher I spoke to today, -

:33:49.:33:53.

Douglas Carswell, a Conservative backbencher I spoke to today, said

:33:53.:33:59.

things are not what they seem Ministers need to start levelling

:33:59.:34:03.

with the British people, they want to transfer money from Britain to

:34:03.:34:07.

the IMF to help eurozone basket cases. Ministers should be honest

:34:07.:34:12.

and say so, and stop trying to hide behind clever words. That is what

:34:12.:34:16.

they want to do, but the question is, should parliament, the guardian

:34:16.:34:20.

of the people's months, allow them to do so. If there is a vote in

:34:20.:34:24.

parliament what will be the outcome be? It is not the biggest question

:34:24.:34:28.

in Downing Street, but it is a question. How many of the

:34:28.:34:35.

Conservative MPs rebelled on the referendums would join Douglas

:34:35.:34:39.

Carswell involving any extra British contribution to the IMF.

:34:39.:34:44.

Another big question is how would Labour respond, they did vote

:34:44.:34:48.

against Britain increasing its contributions to the IMF, recently,

:34:48.:34:53.

in July. Ed Balls has made a statement tonight saying unless the

:34:53.:34:57.

ECB is willing to become the lender of last resort, they have weird

:34:57.:35:01.

that tonight that they won't do that, they would find it difficult

:35:01.:35:06.

to support such a measure. joined by Matthew Hancock, who is

:35:06.:35:11.

close to George Osborne, it is a bit of a mess this decision over

:35:11.:35:15.

the IMF. On the one hand David Cameron is saying let's get behind

:35:15.:35:19.

putting more money into the IMf and then saying the money into the IMF

:35:19.:35:23.

will not be targeted towards any euro fund. Give us the clear

:35:23.:35:28.

position on this? It is very clear and as follows. The Government has

:35:28.:35:35.

got Britain out of having to be in the eurozone bailout. That was a

:35:35.:35:40.

very important step to make sure we haven't given money in the last

:35:40.:35:45.

bailout of Greece, a few months ago, then, of course, we are members, we

:35:45.:35:49.

are founder members of the IMf countries around the world are. As

:35:49.:35:53.

David - IMF, countries around the world are. Britain's contributions

:35:54.:35:59.

to that are under 5%. They are a significant, but a global solution.

:35:59.:36:04.

What we are locking for here what Ken Rogoff said was important. He

:36:04.:36:08.

said this is more than just about the debt, it is about confidence

:36:08.:36:15.

too. Being able to that. 45 billion, could we be asked for that much

:36:15.:36:21.

more? These are commitments. Nobody has ever lost any money by putting

:36:21.:36:25.

money into the IMF. I will explain why. The point of the IMF is when

:36:25.:36:34.

it goes into a country, because it has the back ing of the whole world.

:36:34.:36:39.

Then - backing of the whole world, never yet have markets managed to

:36:39.:36:42.

battle against T it is about confidence. Of course it is about

:36:43.:36:49.

confidence. Imagine the British taxpayer has asked by - been asked

:36:49.:36:55.

to put up a lot of money. And then it is in Italy, groz, Portugal and

:36:55.:36:59.

Ireland, and it is managed, what if it isn't about getting the money

:36:59.:37:02.

back. Do you honestly think the Conservative backbenchers will vote

:37:02.:37:07.

for this? I think Conservative backbenchers will vote for keeping

:37:07.:37:13.

the world economy afloat, which ensuring the IMF has the fire power

:37:13.:37:17.

to instill confidence make sure that around the world, when

:37:17.:37:27.

countries go bust. No countries revolting against this? I didn't

:37:27.:37:33.

say all of them. If it comes to the IMF, should Britain be part of the

:37:33.:37:36.

IMF and the global international community, or should Britain alone

:37:36.:37:42.

walk away from that. I think we should be part of the solution.

:37:42.:37:46.

the IMF and whatever happens there happens? This money has never been

:37:46.:37:51.

lost before, most importantly, you don't put the money in, it is

:37:51.:37:55.

contingent. You say you are paying your dues. We are in a new world.

:37:55.:38:01.

You say we are part paying our dues to be part of the global economy.

:38:01.:38:07.

If you live in major city in the US or elsewhere in the world. Chances

:38:07.:38:13.

are you have encountered the protests protesting against the

:38:13.:38:17.

major banks. How should the political mainstream respond, we

:38:17.:38:20.

will discuss it in a moment, with the author he was arrested in the

:38:21.:38:24.

name of the cause, not Matthew Hancock who wasn't. A quick record

:38:24.:38:29.

now on the Occupy movement. The Occupy movement protestors, who

:38:29.:38:33.

have been camped outside Wall Street since September, and several

:38:33.:38:38.

major capitals in recent weeks, have been ridiculed by commentators

:38:38.:38:45.

by its funny looks, gestures and incoherent demands. The media keep

:38:45.:38:50.

watching. The arrest of high- profile sympathiesers like Naomi

:38:50.:38:55.

Wolf, author, increasingly too the politicians around the world will

:38:55.:39:04.

respond to the movement. protestors are giving voice to a

:39:04.:39:08.

more broadcast frustration about how the financial system works.

:39:08.:39:15.

looks like the Occupy movement is breathing new light into the issues

:39:15.:39:21.

of tax and fairness, its slogans are seeping into the mainstream.

:39:21.:39:24.

The Prime Minister says we are all in it together, but he lets the

:39:24.:39:29.

top% get away with it, while the other 9% see their lifg standards

:39:29.:39:34.

squeezed and lose their jobs. basic message is a simple one and

:39:34.:39:44.
:39:44.:39:52.

A question arises, what next for the Occupy group, do the protestors

:39:52.:39:58.

of St Pauls have a louder voice where they are as an incertificate

:39:58.:40:04.

rexist movement. Or is it time to come in from the cold, and like the

:40:04.:40:09.

Tea Party, learn to take part in the political system to deal with

:40:09.:40:15.

power. Matthew Hancock is with us, and also Naomi Wolf, author for

:40:15.:40:20.

Give Me Liberty, she was arrested last monthburg The Wall

:40:20.:40:29.

demonstration. As we have - as month for the Wall Street

:40:29.:40:35.

Occupation. Is it a mistake? It is a shame to say it that way. What I

:40:36.:40:41.

have heard from the movement members that it is military police

:40:41.:40:45.

officers, teachers, truckers, home makers. What people have to

:40:45.:40:48.

understand, or what the elites don't understand yesterday, is

:40:48.:40:51.

ordinary people all over the world are becoming aware that left and

:40:51.:40:56.

right are parts of a false par dime, and what is really happening

:40:56.:41:02.

globalty, dr pardigm, and what is really happening throughout the

:41:02.:41:06.

world is these people are deciding what happens to resources without

:41:06.:41:11.

consultation, and the rest of us. What the occupy movement is,

:41:11.:41:14.

certainly Americans across the political spectrum waking up and

:41:14.:41:17.

saying this is supposed to be a Republic and we are supposed to

:41:17.:41:20.

have a voice. This is playing on all your houses? I certainly agree

:41:20.:41:24.

that the voices coming out aren't particularly left or right. For

:41:24.:41:29.

instance, one of the big complaints the Occupy movement has is against

:41:29.:41:33.

rewards for failure, which we have seen across so much of the

:41:33.:41:40.

financial system. And wars that politicians have failed to cut off?

:41:40.:41:44.

Absolutely. You are one of them? I'm a newly elected politician. One

:41:44.:41:48.

of the interesting things here is that the left and the Labour Party

:41:48.:41:52.

have admitted that they got this wrong for an awfully long time. And

:41:52.:41:57.

what we're trying to do is deal with some of these problems. Wait a

:41:57.:42:03.

minute, let's go into specifics here. Briefly, nationalised bank,

:42:03.:42:11.

RBS, Steven Hestor still taking how many millions? Absolutely, his

:42:11.:42:14.

contract was signed off by the previous Government, including a

:42:14.:42:18.

cap for the year they were in office, and no cap for the year

:42:18.:42:23.

after election. It is broader than just one person. Here, hold on, let

:42:23.:42:28.

me explain. Is it answering a need, do you think the Occupy Movement is

:42:28.:42:31.

answering a need, it is answering a failure in mainstream politics to

:42:31.:42:37.

give people a voice? The Occupy Movement, I think, is raising

:42:37.:42:42.

mainstream questions. That is certainly true. The difficult thing

:42:42.:42:47.

though is providing the answers that don't in themselves kill off

:42:47.:42:52.

the system that is around the world the most, hold on, the system that

:42:52.:42:56.

around the world has brought billions out of poverty. Matthew,

:42:56.:43:00.

you are saying this is the right system and we should just, for

:43:00.:43:04.

instance, hand over another 45 billion, trillion, what was it? I

:43:04.:43:10.

don't hear the voices of the people in St Paul's, or in the park or in

:43:10.:43:14.

Athens, participating in this conversation at all. What I want to

:43:14.:43:21.

say to you is many millions of people are saying you may not be

:43:21.:43:24.

the experts, and we are entightedled to be part of the

:43:24.:43:28.

decision manufacture make - entitled to be part of the

:43:28.:43:31.

decision-making process, and the parts of the system that don't work

:43:31.:43:35.

should be killed off. People do vote and vote for political parties.

:43:35.:43:40.

Are you saying in the same way ats Tea Party has done, is what you

:43:40.:43:46.

want to see is the mainstream forming itself into a more

:43:46.:43:49.

formallised political revolution. The founding fathers intended that

:43:49.:43:53.

citizens should run their own Government. If you saw the demands

:43:53.:43:58.

the protestors made. People in the media keep saying where are the

:43:58.:44:01.

demand, they are on my Facebook page. I have them in my purse. They

:44:01.:44:05.

are not hard to find the they are very mainstream demands, they are

:44:05.:44:08.

sensible, things like get money out of politics. Here in Britain too,

:44:08.:44:14.

you have a problem with lobbyists, and military profiteers, hijacking

:44:14.:44:17.

the decision-making process in parliament. I asked one of the

:44:17.:44:21.

producers what is the pressure point for British citizens sitting

:44:21.:44:26.

in St Paul ae, watching tonight, to exert pressure on representatives,

:44:26.:44:32.

it is not that case easy, there are not that many points of - easy,

:44:32.:44:37.

there are not that many points of pressure. We ask to where does do

:44:37.:44:43.

the people's vote he is come in - does the people's voice come into

:44:43.:44:49.

it, do we wait outside people's apartments. Do you want to see

:44:49.:44:54.

people in the Tea Party, they came by a different route, they were

:44:54.:44:58.

Republicans many of them, would you like to see Occupy, to be a

:44:58.:45:04.

political force in the UK? They are lucky in the UK to have a democracy.

:45:04.:45:09.

So does the United States? Across the world and Arab world, people

:45:09.:45:13.

are literally fighting to have a democracy. I think it would be

:45:13.:45:18.

terrific if some of the eloquent people in the Occupy movement,

:45:18.:45:22.

stood for parliament and got elected and work out solutions to

:45:22.:45:27.

these problems to make sure that the benefits of prosperity get

:45:27.:45:33.

spread more evenly throughout society. Of course protest, I'm a

:45:33.:45:40.

vigorous defender of free speech, and like that fact. Martin Luther

:45:40.:45:45.

King had the right idea, you create massive pressure movement, a grass

:45:45.:45:48.

roots movement, it creates pressure on the system then you send in

:45:48.:45:53.

representatives to reform the system. I have been advocating for

:45:53.:45:57.

Occupy protestors to start creating e-mail lists, raising money,

:45:57.:46:02.

registering voters, and to be a block. If they were a political

:46:02.:46:07.

block in Britain they could set an agenda. You would have to talk to

:46:07.:46:14.

them. Anybody can write to me and I reply to every single piece of

:46:14.:46:18.

correspondence. Thank you very much. Next, Newsnight will be taking an

:46:18.:46:24.

indefpt look at the human brain. Asking - indepth look at the human

:46:24.:46:31.

brain. Here is a flavour of the first of our films.

:46:31.:46:35.

For decades mental illness has been beyond our understanding. Now

:46:35.:46:38.

scientists think we are on the verge of a revolution. This is what

:46:38.:46:42.

it's all about, the human brain. Scientists are beginning to

:46:42.:46:49.

understand how the brain works, and what makes it go wrong.

:46:49.:46:59.
:46:59.:47:27.

That's all from Newsnight tonight, Emily will be here tomorrow, I will

:47:27.:47:33.

be on after with Review discussing new books from Steven King and Joan

:47:33.:47:43.
:47:43.:48:01.

Didian. This weekend it will be sunny for

:48:01.:48:04.

some. Wet for others. As far as tomorrow's concerned, most of the

:48:04.:48:08.

rain will be across England and Wales. Fairly heavy intense

:48:08.:48:12.

downpour, locally it could be quite nasty, a lot of surface water and

:48:12.:48:15.

spray around. Getting the detail will be difficult. The idea is some

:48:15.:48:18.

really intense showers across many parts of the England through the

:48:18.:48:23.

afternoon is valid. Slow-moving as well. Brighter spells and still

:48:23.:48:27.

mild, 17 degrees in London. Nasty showers across the West Country too.

:48:27.:48:31.

Warnings have been issued, but western most parts, that is to say

:48:31.:48:35.

parts of west Devon, Cornwall and western parts of Wales, probably

:48:35.:48:38.

avoiding the Washington Post of the showers. Some places here staying

:48:38.:48:42.

dry, winds light. The best of the sunshine will be further north and

:48:42.:48:46.

west, Northern Ireland having a lovely day, it should stay dry and

:48:46.:48:50.

bright, with light winds, 13-14 degrees. Western parts of Scotland

:48:50.:48:53.

not doing too badly, a scattering of showers further east across

:48:53.:48:58.

Scotland with a fair bit of cloud as well. Going into the weekend it

:48:58.:49:05.

is northern parts of the UK staying dryest and brightest, noon too warm,

:49:05.:49:10.

patches of fog. It is in the south where we will keep the rain clouds

:49:10.:49:14.

going, some of the showers prolonged a school broz from the

:49:14.:49:17.

Presented by Kirsty Wark.

As pressure mounts on Greek Prime Minister George to resign and make way for a coalition government, Newsnights asks: what next for Greece and the eurozone?


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