10/11/2011 Newsnight


News analysis with Emily Maitlis. How can economic collapse across Europe be prevented and will the European Central Bank intervene in a significant rather than piecemeal way?

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Tonight, warnings of a new recession for Europe. As investors


and the commission cut growth forecasts across the EU, is the


euro itself about to crack? We will hear tonight from Rome, Berlin and


New York. The man who knew too much,


apparently not, James Murdoch says the truth of widespread phone


hacking was hidden from him. But the News International boss


apologises for the revelations broken by Newsnight, that lawyers


of phone hacking victims were put under surveillance by News of the


World. I want to say for the record it is appalling, something I would


never condone, and the company should never condone, it was


shocking when I found it out. parliament, frustration. But did it


really merit this. Mr Murdoch, you must be the first Mafia boss in


history who didn't know he was running a criminal enterprise.


Watson, please, I think that is inappropriate, Mr Chairman. We will


hear from a News International executive and a victim of hacking.


Also tonight, the battle of the oligarchs, from the creme Len to


the alps to the courts. Abramovich versus Berezovsky.


Hello and good evening, what if it is already too late? Despite calls


from politicians to act now to save the eurozone there are some voices


now admitting that the chance may have already been missed. Today the


European Commission downgraded its growth forecasts and admitted


Europe was at risk of a new recession. A banker is now in


charge of Greece. The country recognised Lucas Papademos as their


head. The market seemed reassured by the changes, even with


Berlusconi agreeing to go. Is it too late to prevent a recession?


There are people in the markets who believe this problem of Italian


sovereign debt may be yesterday's problem. That the movements in the


price of Italian debt, certainly its short-term debt, may be


signalling something else, which is trouble in the banking system,


primarily in the Italian banking system, more widely in the European


banking system. This short-term debt is a key instrument that banks


use to trade with each other. We have had, tonight, it is not often


I read out notes from analysts, we had a note from analyst at


Schroders, this is a company that manages �300 billion worth of


people's money, saying this, politicians have missed their


opportunity to prevent a European credit crunch, and following


yesterday's events, the banking system in Europe is now likely to


experience a serious shock from the fal fall-out of the country's bond


market collapse. That is a fairly clear bet, or


wager, on another Liamman in Europe. To stop it -- Lehman in Europe, the


action to stop it, the solutions are as political as they are


economic. The German nightmare about money,


is coloured in black and white. By what happened in the 1920s. In the


Weimar Republic, the Central Bank printed money, and hyperinflation


followed, children used bank notes as toifplts they weren't much use


for anything else. Those cultural scars explain why Germans are so


nervous about letting the ECB take the extraordinary measures other


central banks have taken. Instead the technocrats at the European


Central Bank are attempting, not very successfully, to keep a lid on


things, with a short-term fix. ECB has been coming in, day-to-day,


since the beginning of August, and buying Italian and Spanish


Government paper, trying to keep the prices up and yields down. This


way the price of Italian debt is affordable. In reality the


programme is not transparent. The banks don't know when the ECB is


coming, what the point of the programme, and when it will stop.


This graph those what the ECB is doing, buying up loans from Greece,


Ireland and Portugal, and since August, big time from Italy. But


Italy as another 300 billion euros of debt to roleover this year,


nobody else is buying. What they note -- roll over this year, nobody


else is buying. What they need is to have a reserve of thrillions,


and then the markets would know where the ECB is going and know it


is at affordable levels. There is a problem, board members and other


European traditionalists, thinks it breaks the treaty law and the


spirit on which the euro was founded. The other option, already


offered to Italy, but refused, is a short-term credit line from the IMF.


That comes at a price too. The IMF mission in Rome, already demanding


specific privatisations, and more refoerms. -- reforms. It would be


very difficult for the IMF to fund the entirety of a bailout of an


economy. That is as rich in Germans of GDP per capita, as Italy, other


economies are much poorer economies contributing to the IMF, would feel


uncomfortable with that. If the short-term threat is contagion from


geez Greece, -- Greece, then getting Greece under control will


help. The new Prime Minister was swoorn in there today. Can the


banks losing money under the private sector involvement lose


more? No says the man who rep presents them. I think for Greece


the 50% nominal reduction is the beard line of what could be


reasonable as voluntary, any reduction in value and losses


clearly would be there with markets that are non-voluntary. In the


short-term there is a mismatch, everybody thinks the ECB will move,


those in politics think it won't. Markets have given up on


Governments, given the mess in Italy and Greece in the past week,


markets have moved on that a single Government can change situations.


It doesn't really matter who is running Greece and Italy in the


near term, what is what matters is the ECB coming in and trying to


deal with the situation. Italy too has its nightmare images of the


past. Burning money to control inflation. Tonight, something more


valuable than money is smoldering, the credibility of the eurosystem.


We will be hearing about that a little later from Paul. Joining


from Rome, Federica Mogherini, an Italian member of parliament,


Michael Barrymore, and Gillian Tett of the Financial Times, and here in


the studio, Alan Brown from Schroders, mentioned in the report.


I will start with you, Alan, one of these lines in the report is that


Europe is essentially missed -- has essentially missed the opportunity


to prevent a credit crunch. Do you believe it is too late to avoid


recession? I believe we are at the early stages of a credit crunch


right now. I believe the real politics is that it is virtually


impossible for politicians to get ahead of the game at this stage. I


almost feel that we have to almost reach the train wreck before


politicians will actually be empowered to take the actions that


most of us in the markets believe are necessary. Where is the train


wreck, how far away are we from that? We are already


extraordinarily close. The focus is on Italy because that is where the


large money is. We are talking about debts of 1.9 trillion. We are


talking about the Italian economy going back into recession, and the


yield on Italian bonds today would be completely unsustainable for


Italy's finances, if they were maintained at that level for any


length of time. Mogherini, David Cameron, our Prime Minister, --


Federica Mogherini, David Cameron, our Prime Minister, pointed the


finger and said Italy was a clear and present danger, a major part of


the problem? We are aware of the fact that we have a responsibility.


We as politicians, even being in opposition, it is hard for me to


share the responsibility with Berlusconi's Government now, but we


are aware of the fact that politics and the Government has a


responsibility, and that we have to fix the problem. Not only for Italy


but for the eurozone, for the European Union, and for the world,


probably, because we see how the markets are interlinked. We are


trying to do our best to speed up the process. To have a different


Government in a couple of days, not more. To do whatever is needed to


recover and make sure that it is not too late. Hopefully we are


still in time. It is interesting, the point that Paul made in his


report is that markets have essentially given up on Governments


now. As a member of parliament, how do you respond to that? That is


very sad, I have to say. But Italy has had, and still has, partly, a


credibility problem, that is peculiar to our political scene in


the last months and years. I believe that with the choice of


having Mario Monti as the next Prime Minister, given that it is


the choice, because it is not given for granted yet, but still it looks


like it will happen in the next 48 hours. I think that will be the


right choice. Also considering what was said before, he is, for sure,


the right person to reassure the markets, and to try to solve our


problems, even if his point of view is not a political one, but more of


a technical one. I think this is the right choice at the right


moment, finally. Gillian Tett, in New York, I know you have been with


Alan Greenspan today and talking to Obama's people, viewed with that


distance and perspective, is the solution more obvious? Well, I


think the sense of fear is palpable. In fact, Alan Greenspan told a


meeting earlier today as far as he's concerned Europe is America's


biggest economic problem right now. In a sense there is real concern


about contagion, that the global economy could be pulled into a


slowdown f not recession, as a result. And we're heading for


financial market turmoil. The Americans, perhaps, more than


anybody, know that when markets are losing confidence, what you need is


clear action, decisive action, and preferably action that surprises


the market on the upside, doing more than they ask for. They know


what to do, that is what they did with the bailout programme in 208,


to top the panic after Lehman Brothers. What is causing concern


here, is they don't see any sign that the European leaders have


their version of a bailout. What would that be? It would be clear


measures to draw a line in the sand, to joined pin the eurozone bond


markets, to force the banks to come completely clean about their


exposures to sovereign debt, and if necessary to inject more capital


into the system. Then, to start talking about whether the eurozone


is going to create more co- ordinated fiscal policies going


forward, or address the fundamental structural problems that are


plaguing the eurozone now. Essentially yolking an economy like


Italy, which is very unproductive, where productivity is not grown


over the last decade, with Germany, where productivity has grown 9.4%


in the last decade. There are big structural problems exposed.


Michael Barrymore, isn't the solution staring us in the --


Katinka Barysch, is the solution staring us in the face, I can see


Gillian nodding her head. The IMF have been ruled out, none of the


poorer countries want a fund that bails out Europe, essentially, the


buck is right in your corner, isn't it? Yeah, and I'm in Berlin, the


world is staring at Berlin for a solution, and I'm in Berlin and


everybody seems to be staring at Frankfurt. Now, one thing that I


have picked up here over the last couple of days is there is an


acceptance in the German political circles that the ECB has to do


whatever it takes to tide us over this particular part of the crisis.


Although you will always hear German politicians say that they


are against the the central banks buying dodgy Government bands,


there is an acceptance. There is an awful lot of communication going on


between Frankfurt and the German Government at the moment, not the


ECB and the German Government, but also the Bundesbank, the German


Central Bank and the German Government, there was a falling out


recently, because the German Bundesbank wrecked a plan to use


special drawing rights of artificial currency that all IMF


members hold, to boost the European Financial Stability Fund. There is


bad blood even between those authorities. It is all in Frankfurt


at the moment. Having said that, I think that a lot of German


politicians, sorry? Just to say, are you saying the ECB is not in


the picture at all. Nobody is talking about the ECB now? They are


talking about the ECB, but the Germans are the people who


basically invented independent central banks and they are not


necessary happy with all the ECB does. I have met some people who


are very close to the Government and are very unhappy with the ECB


druging its feet. Exactly what Gillian has just said, and what the


market analyst also said, they should make a very clear statement


that they are now going into the market, they don't disclose the


sums, they just say we will back the Italian bonds. That they stop


dithering, they are buying bonds at the moment, they say they don't


like it, they don't know how long it will take. The German


politicians aren't necessarily happy with this, but this is a


country where you don't criticise central banks openly, it is not


done. I take it back to Gillian Tett, although it seems like the


obvious solution, there is no direct chain of command between the


German Government and the ECB, it simply can't be done? There is no


direction and command. But frankly, all eyes now on Mario Draghi. This


really is his historic moment. It is worth bearing in mind for the


ECB to step in and underwrite the Italian and Greek bond markets is a


huge psychological step. For the US Congress, in late 2008, it was a


huge psychological step for America to essentially nationalise, or use


public money to bail out the banking system. Psychological steps


can occur, in a crisis. It wouldn't be impossible to imagine this. But


the really big question now is will Mario Draghi, because he's Italian,


feel he has to be more German than the Germans to get credibility? Or


is he willing to really role the dice and do something bold and


dramatic. He does come from the private sector background, it is


worth rembering that. He has worked at Goldman Sachs before. He knows


what happens when traders get involved, and maybe just maybe a


point will come where he says he's going to behave like a trader, he's


going to do something bold and dramatic and make my mark. Time to


break the rules? Absolutely, it is breaking the rules. Under the


Lisbon Treaty, the ECB is not allowed to go out and monetise debt


in the system. It means tearing up rules. That is why we will get to


the 11th our and 59th minute before we get it. We have further to go


with this, stay with us. We will be talking about the future of Europe.


Meanwhile it has been reported that France and German officials have


held discussions on the prospect of a smaller eurozone w some countries


leaving the currency all together. The discussions are still highly


theoretical and have been denied by the German Chancellor herself, but


much of the focus in the midst of Europe's worst crisis since the ske


Second World War, will be clearly The sovereign debt crisis has


pulled Europe's long-term problems well into the short-term. A


currency union without a tax union, a half cocked Central Bank, a huge


competitiveness gap, a social model, but no-one left to pay for it. From


the politicians, always the same plea, give us breathing space to


make the long-term structural reforms. But 18 months of


indecision has removed the breathing space. Europe now has to


do structural reform in the worst of circumstances. The European


Commission slashed its growth forecast for 2012 today by more


than two-thirds, from 1.8% to 0.5%. It predicts recession in Italy,


stagnation in Spain, sharp slowdowns in German and northern


Europe, and stagnation in the UK for the first half of next year.


It makes it worse for all of Europe, not just a southern European


problem. GDP is not growing and their dynamics look worse, on paper


all the countries have a lot more fiscal tightening to do. It pushes


them into a fiscal spiral, they are cutting and the economy is pushed


into recession, and it is hard to get out of the mess. On paper it


makes growth worse. What are the long-term options, the eurozone


could go for fiscal union, but discussions focus lately on who is


in and who is out? The best scenario for the eurozone is the


most highly indebted economies leave. And you are left with a much


stronger core eurozone involving Germany and some of the other


northern countries. That could then perhaps make convincing steps


towards a fiscal union, which means this situation doesn't arise again.


If the eurozone did break up, the collapse in asset prices on the


periphery, might be enough to take down a large part of the banking


system, here and across the world. The dreaded credit event, or Lehman


moment. That would beanter mount to default, the nomination -- be anter


mount to default, the new thing would be more than the nominations


of the current area countries. They are in the euro, one is a key


country in the world, any redenomination would produce


significant loss. There is one other option, Germany leaves the


euro, and forms a new currency block around the new reborn damp


mark with other countries, like Austria, Finland and the


Netherlands. That option is looking more and more feasible the longer


this goes on. If Germany is forced into much larger bailouts, much


larger contributions to other countries, than it is comfortable


with, it might be in the end it chooses to leave the eurozone.


would be Europe, but not as we know it. Paul Mason there, the guests


are still with me. Federica Mogherini, an Italian MP,


Katinka Barysch from Berlin, Gillian Tett from the FT in New


York, and Alan Brown of Schroders. I will throw this to you, Bill Cash,


In Berlin r they privately considering this smaller Europe?


Some people are very publicly considering it, there are some


prominent commentators, the former head of the employers' federation,


who say we need the euro nord that is only with the stability


orientated immediate neighbours, and we kick the southern Europeans


out. That is a minority view. Within Government circles there is


no talk about breaking up the eurozone. They are, of course,


discussing the idea that eventually maybe we need a clause in the


European treaty that allows countries that don't want to stay


in to leave. This is a very long- term sort of thing. As a solution


to the crisis, in Government circles people are not talking


about a break up of the eurozone, partly because there is a feeling


of solidarity, partly because they know for countries such as Greece


to be out there on its own would be very, very tough, and they know


there would be mayhem. How do you disentangle what is a drachma-


eurobond and a damp mark euroband, how do you have capital controls in


the monetary union. They know if parts of the periphery breaks away,


the rest of the eurozone will have a currency that is exceedingly


strong, for an export-orientated economy, such as gaeerm Germany,


that is a scary thought. Is it inconceivable? No, since 1945, on


the narrowest of definitions, 69 currencies an the world, many odd


and small, have come to an end, and the sun still rises in the morning.


It doesn't have to be a calamity, but it has the potential. It


becomes one if, in the removing say Greece from the eurozone, we then


end up with a contagion, leading to a domino collapse of all the other


perrif kal economies. Is Italy on the in-- Periphery economies.


Italy on the in or outside? I think it is on the inside, it is running


a much lower deficit than the UK. It is the governance structures of


Europe which unfortunately are making it so difficult for the


European economy, at large, to cope with this problem. Federica


Mogherini, do you think that once the political structures change, by


that, the euphamism is Berlusconi is gone, could Italy find itself


back on the inside? Absolutely, I think the Italian economy, and the


banking system are stronger than they have been described so far. I


think with the right reforms and measures, both long-term, mid-term


and very short-term, we can do much better than we have done so far.


And I think that Italy is ready to be back on its feet again. And be


part of the eurozone as it should be and it is now. I started by


saying this is all highly theoretical, of course, is it


possible to have a controlled break-up, does it make any economic


sense? It is not highly theoretical, I can tell you that here in New


York there are banks and asset managers doing all sorts of


internal fire drills for a potential break-up and exit of one


or two members. I was chatting with asset managers, people who control


some of the biggest pots in the world, going down the list saying


do you draw the line of groz and Portugal, what about Ireland, if


there is some kind of exit of members. People are certainly


talking about it. Any kind of exit or break up will be messy. People


know that, and the great lesson of Lehman Brothers back in 2008, when


it collapsed, of the interconnectiveness of the


financial system today means there are often very unexpected shocks


that no-one has thought of when something happens, that is what


people are worried about. This couldn't happen without a


substantial number of banks going under, could it? Banks may need


more capital, but they don't necessarily have to go under.


your view the same, Gillian? It is unclear, that is exactly why people


are so concerned. There are already people looking at the linkages


between the banking system and trying to work out exposures. One


tiny example, at the moment public entities, state entities don't post


any capital when they post derivatives deals, nobody thought


we would be in situation where people could default. What are the


reprecussions if people did default and didn't pay back the money they


owed, we don't know. Economically you can see how it is ethically,


but it could be catastrophic. You have the illusion of parity, France


and Germany, standing strong side by side together. If it emerged


that France was not as strong as Germany, that is pretty much the


end of post-war Europe, isn't it? My generation grew up with the


conviction that in European integration the direction is always


in one way, towards more integration, more harmony, more


solidarity amongst the European people. For the first time in my


lifetime, we are staring at the real possibility that we might go


back wards, that countries might opt-out, that there might be chaos.


There is bad blood in the European Union already, we don't like each


other as much as we thought. This is much more about banking sector


chaos, and finance. This is about the European identity. And what we


are seeing already now, that we tried to hold the euro together. We


might just be able to do the things that are necessary to save this


currency, but it is eroding the political fabric on which the


European Union is based. So whichever way this goes, we will


come out with a European Union that looks very different from this


harmonious, nice place we thought we were in when we started this


crisis. Thank you very much.


James Murdoch has accused former News International employees,


including a company lawyer, of misleading him about the phone


hacking controversy. He returned to Westminster today to answer more


questions from a select committee of MPs, who repeatedly insisted he


hadn't been told of the so-called "for Neville" e-mail, which


suggested phone hacking was widespread at News of the World.


Tonight Tom Crone hit back and accused James Murdoch of giving


disingenious evidence. James Murdoch was fighting for his


corporate reputation today in parliament. Recalled to explain


inconsistencies in evidence about who knew what, when, at News


International about phone hacking, the stakes couldn't have been


higher. Did you mislead this committee in your original


testimony? No I did not. When James Murdoch gave evidence at the select


committee today, it immediately became apparent there was a


straight conflict. Either his account of what he knew about the


extent of phone hacking was correct, or the account given by the in-


house lawyer and former editor, a couple of weeks ago was correct.


There was straight contradiction. If Mr Brown and Mr Myler are


telling the truth, you are not telling the truth, if you are


telling the truth, they are not telling the truth. At the centre of


the story are three men with delivering recollections of the


events. James Murdoch who sat way above News of the World in the


parent group, Tom Crone, News of the World's vastly experienced


legal adviser, and Colin Myler, brought in to clean up the mess


after the phone hacking scandal, that led to the conviction of Glenn


Mulcaire and Clive Goodman. It is the case of Gordon Taylor has most


dangerous for James Murdoch. Police have discovered a transcript of a


message left on his phone with a "for Neville" message for him on


the phone. The case seemed to look bad. On the 24th of May, Tom Crone


Sure enough their barrister, Michael Silverleaf, delivered his


considered written opinion on the Tom Watson MP, who has been like a


dog with a bone on this inquiry, asked him whether the QC's advice


was discussed at a meeting on the 10th of June, with News of the


World's legal adviser, Tom Crone, and editor, Colin Myler. There was


no mention of a culture of legal information discussed at that


meeting. Certainly not. Do you still maintain that neither Crone


or Myler mentioned this, even in passing, given the strength of


words used? That is exactly right, they did not mention it. Despite


this information going to the very heart of the problem, you and they


were meeting to discuss, namely that Taylor settlement, they didn't


raise anything within the Silverleaf opinion? They gave me


sufficient information to authorise the increase of the settlement


offers that they had already made, that they had commenced making,


some weeks before, without my knowledge. They left that meeting


with the authority to continue to negotiate. But in September Tom


Crone told the committee that James Murdoch had been told about the


"for Neville" e-mail, and seemed to indicate others at the News of the


World knew. James Murdoch said he got that wrong. With respect to my


knowledge, I thought that was inconsistent and not right. I


dispute it, vigorously. You think Mr Crone misled us. It follows that


I do, yes. Tom Crone hit back I need to tell you that I have met


Neville Thurlbeck, and although the meeting was supposed to be in


confidence, I think there is a public interest in revealing what


he said to me. Mr Thurlbeck told him that Tom Crone had shown the


damaging e-mail to James Murdoch, and he said the company was not


ware of concerns he had raised. fully sympathise and understand why


News International have made this decision to dismiss me. Because it


was based from a position of ignorance. They have been deprived


of vital information. That I have provided and offered to the News of


the World. I have spoken to Neville Thurlbeck over the past couple of


days. It is clear he maintains his innocence. He says his concerns


about the called "for Neville" e- mail were ignored by management. He


says it rather seemed their purpose that it absorbed all the pressure.


He had a colourful turn of phrase for this, he said the "for Neville"


e-mail was like nag net for the iron filings of the mission.


Reported a News of the World investigator who followed leading


phone hacking lawyer, Mark Lewis in Manchester. Mr Murdoch was asked


about this today. Are you aware that Mr Lewis's family was tried by


private investigator, including his 14-year-old dau, would you agree


with me that is completely despicable and has no place in the


practices of a modern media corporation. I totally agree with


you. I wasn't aware of the allegation, if it is the case, as I


have just said the whole fair is not acceptable and not on. Once


again he seemed to put the blame on Tom Crone. That was absolutely not


a corporate activity that was condoned, it is absolutely not


appropriate. Mr Crone and the other person did not do that with any


authority or knowledge by me, and I would never condone that behaviour.


Again a dispute. Tom Crone seemed to deny arranging for this to


happen in September. Did you arrange for the lawyers of phone


hacking victims to be monitored by private detectives? No. Did you


arrange for a dossier to be kept on them and follow up on their private


lives? No. Many other private detectives were named in parliament


today by Tom Watson. It seems it is rarely a week goes by without some


new revelation about hacking, or at least highly questionable


journalistic ethics. For News International it is the front page


lead that refuses to die. Joining me now is Roger Alton, executive


editor of the Times, and Chris Bryant, the shadow Justice Minister,


who has had his phone hacked himself. Chris Bryant, the select


committee got no further today. We have ended up with one person's


word against another? We did get somewhere. We got some apologies


from James Murdoch. We learned he hasn't the faintist idea what goes


on in his own organisation. We learned he doesn't refer to it as


his organisation, but as "it company", as if it is nothing to do


with him. We learned that somebody at News International has been


lying. Personally I suspect all of them have been lying to various


different degrees. James Murdoch had to portray himself today as


either being incompetent or a liar, he chose to go for being


incompetent. It is extraordinary, Roger Alton, the kind of


inconsistencies that remain. This jump in the amount of money, to


�750,000, that James Murdoch didn't think to ask about? It was damages


plus costs. Mr Murdoch had been advised that it was a good thing to


do to settle, the cost might go higher. That was an award that


could be done to Gordon Taylor. I think he was right to do that. He


said in the hearing he didn't want to drag the company's name through


the courts. I think the arguments for settling were perfectly fine.


The idea it was a bribe or hush money doesn't wash. It certainly


does wash, what you have just said is a complete load of nonsense, you


know it yourself. The truth of the matter is when somebody makes a


claim about a newspaper, and the newspaper decides to make an offer,


let's say they offer �100,000, they might then take into consideration


that if it went to court there would be additional costs. You


wouldn't add on the total costs of both sides, and then give all that


money to the litigant. Because it is, in a sense, you wouldn't be


saving yourself any money, would you be - you would be better going


to the court. It was part of buying the silence and the cover-up


organised by people at the very top of the organisation. There clearly


wasn't a cover-up, what James Murdoch admitted today was that the


company hadn't dealt with issues of governance, sufficiently he


admitted that. Don't you think that is extraordinary Can I finish, he


had two things to do today, one to deal with the questions of his own


personal integrity, which I believe he Z and the other was to deal with


questions around how News International runs itself. He admit


add lot of things had gone wrong. There was a culture in the company


of keeping stuff from the boss, and there was a culture in the company


of being too aggressive. Not just keeping stuff from the boss, but a


boss not asking or checking or being curious about the Gordon


Taylor payment? He said himself he should have been more curious. He


admitted that. He didn't say that, that is completely untrue. That is


exactly what he didn't say. He said there was no problem with


governance in the organisation, it was a matter of transparency.


saying there is a problem with governance. He used a whole load of


language that is management speak for avoiding responsibility. This


was his organisation, his employees. If I were a shareholder in BSkyB or


News Corp, I would be saying, frankly, this man doesn't know what


is going on under his fingertips. You have to accept one of the two,


either he does no know and isn't saying t or he doesn't know how his


company is run. He's a News International executive. He has run


the company really well, and it is extremely good company. Extremely


huge amount of good people there. There is a problem, nearly 6,000


people had their phones hacked. Hundreds of people were harassed


and intimidated by being trailed. Members of the Government, members


of all political parties. Members of the Royal Family. The


Metropolitan Police were corrupted, individual police officers were


bribed, for informationle all of this done by an organisation --


information, all of this done by an organisation you think is extremely


well run. He said problems about the running of the company, James


Murdoch said they were being addressed, he apologised for things


like surveillance. We know in the last decade there was problems


within the News of the World for accessing illegal information. That


is been dealt with and the paper has been closed. We have heard this


from people from News International for years now. It is only because


some people took News International to court that some of the material


came out. It is only because the Guardian mounted an investigation,


which was vigorously and aggressively poo pooed by By the


News of the World and the Independent. On the main subject,


the central issue, on which the select committee kept going at, is


that e-mail that Crone and Myler both say James Murdoch knew about,


he denies it. We are no further on. It is inconceivable he didn't know


about it. There is no rational for paying the �750,000, or the deal


with Max Clifford, which he believe to be more than that number. There


is no rationale or that, except to keep out of the public domain that


there was not just one rogue reporter, that it was endemic in


the newspaper. That was the argument James Murdoch, Rupert


Murdoch, and Peter Brookes, and Andy Coulson, awe relied on. Isn't


it a sign of -- All relied on. Isn't it a sign of the frustration


of the parliament when Tom Watson made the comment about the Mafia,


the Mafia kills people? It was colourful language, I have been


accused that have in the past. So has the Sun and the News of the


World, indeed, when the committee produced its rorp, just before the


last general election d report, just before the last general


election, and said it was inconceivable that people at the


News of the World didn't know about the "for Neville" e-mail. They


attacked certain people out of the newspaper, and bringing to light


the truth, that was what they did. Indeed Murdoch said, one of the


problems they had done had been far too aggressive, when the company


had been criticised, this was wrong. He admitted it was wrong. One of


the reasons is people have always attacked in ferocious terms the


company. That is why they were overdefensive and not dealing with


the problem. They are dealing with the problem now. They had committed


crimes and covered them up and then lied. Something they vigorously


deny? No, they own up to it. saurvilleence he has apologised for,


the phone -- surveillance he has apologised for, the phone hacking


leading to two arrests and a number of arrests, this as a resulted in


the ending of the BSkyB deal, and closure of certain places and the


loss of jobs. If it were true what Mr Murdoch is saying, why wouldn't


he pay every single person who was litigating against him and the


whole costs of going to court. think it is time to move slightly


away from this, there is nowhere else for it to go. Of course you do,


there is people to go to prison yet. It has been described as the


largest private lawsuit in the world, an epic legal battle between


the superrich tycoons, Roman Abramovich, and Dimitar Berbatov,


which has been riveting a packed courtroom. Allegations of extortion


and corrupt deals with the Kremlin have been bandied around over a


disputed �3 billion, that has provided an unprecedented glimpse


into the lives of the oligarchs and how Russia is run. The most


flamboyant of Russian Tyrone Koons versus the quietest, one of the


Kremlin's bitter -- Berezovsky versus Abramovich, a battle of


basic human values, according to the Berezovsky. TRANSLATION:


trust Abramovich in an eastern manner, like a son, a lot of years,


and then he betrayed me. Battle between past and future, according


to Abramovich. TRANSLATION: time had past, his period in post


communist history was over, Russia had moved on, I had moved on.


battle over a �3 billion claim that the owner of Chelsea Football Club


describes as wholly without merit. For the past six weeks the high


flying tycoon has been grounded in London, confined, like his rival,


to an English court radio. They have both had to squeeze their


bulky body guards into the public GALry they have both been pummelled


relentlessly in the wins box, by Britain's two cleverest barristers.


Why on earth is this taking place in London. As Abramovich says in


the witness statement, the claims in these proceedings have virtually


no connection with England. He doesn't even live here, yet by an


extraordinary stroke of bad luck, from his point of view, Abramovich


happened to be out shopping with his body guards here on Sloane


Street in Kensington, one day at 2007, at exactly the same time as


Boris Berezovsky was out shopping with his. Berbatov, leaving Dolce &


Gabbana, caught side of Abramovich two doors away, and grabbing the


writ he wanted to serve on his rival for months, he rushed into


Mez and tried to thrust it into Abramovich's hands. Four years of


legal wrangling later, and that writ has led us to the High Court.


Where not just the relationship between two extraordinary


characters, but one of the murkyist and most fascinating periods of


recent Russian history is being brought under the forensic light of


English justice. A Perth period in the dark dawn of capitalism, when


many ordinary Russians' lives collapsed. When their country's


vast national resources were sold off to a pittance to those with the


governance and connections and the The question for the court, how did


Berezovsky, the avuncular maths professor, turned car dealer and


politician, work together with Abramovich, the youthful plastic


dock manufacturer, turned oil trader, with partners in the


sidneft oil company, or not. Certainly when Berezovsky needed a


few more millions or hundreds of millions to sustain his lifestyle


and public persona, Abramovich forked out. Berezovsky says the


cash was his share of joint profits. Abramovich says he was simply


saying one of President Yeltsin's most powerful courtiers to protect


and intervene for him, in a chaotic, dangerous world. Abramovich's


barrister called medieval. In our own national experience we have to


go back to the 15th century to find a comparable problem. I hope I


won't have evidence from the 15th century. No, your lady has read


Shakespeare, no doubt. energetic Vladimir Putin makes the


story even more Shakespearian. Berezovsky believed he had made the


new President, a former little known spy chief, that he had helped


promote. But the king turned on his maker.


The turning point, the court heard, was the sinking of the Russian


submarine, the Kursk. Berezovsky's TV channel attacked the Kremlin's


sluggish response, Putin was furious, two months later,


Berezovsky, fearing for his safety, left Russia, never, so far, to


return. For the court, this is simply a commercial case about a


business dispute. For anyone interested in Russia, it is also


deeply political. Pitting Boris Berezovsky, now one of the


Kremlin's most implacable enemies, against Roman Abramovich, who is


always -- who has always tried to steer clear of controversy, and


keep the best possible relations with Vladimir Putin. Late in 2000


Abramovich also entered politics, serving Putin as governor of the


reindeer herders and one of the remoteest provinces, Chukotka.


Later it was heard that after a meeting with the Kremlin in the


French Alps, Abramovich agreed to pay a staggering $1 billion dollars


as a final pay off for the protection he no longer needed.


Berezovsky says Abramovich was buying him out of his business at a


knockdown price. Saying if he didn't accept the terms, Vladimir


Putin might jail one of his friends. A secret recording, according to


Berezovsky proves Putin's involvement. If President Putin


wanted someone to be arrested, if not they wouldn't. That's right,


isn't it No, that is not right, this just says that President Putin


is the most well informed person, that doesn't mean that he


influences who should be arrested and who shouldn't. Abramovich, keen


to stress the lawlessness of Russia in the 1990s, is keen to stress its


lawfulness today. But whatever the rights and wrongs of this case,


which continues, at least until Christmas. The fact that there are


other similar Russian disputes, engaging the English courts, tells


another story. It suggests there is still little reliable justice in


Russia. Takes these cases on is lucrative legal business, but


whether it ultimately enhances or diminishes the reputation of the


In-depth investigation and analysis of the stories behind the day's headlines with Emily Maitlis. How can economic collapse across Europe be prevented and will the European Central Bank intervene in a significant rather than piecemeal way?

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