14/11/2011 Newsnight


With talk of a two-speed Europe emerging from the eurozone financial crisis, Newsnight asks what Britain's future relations with the European Union are likely to be.

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Roll up that map, we shall not need it these ten years. The British


Prime Minister is supposed to have said that when he heard about


Napoleon's crushing victory in 1805. The map of Europe is now about to


be redrawn in the wake of the euro crisis, but David Cameron didn't


manage anything quite as res nant tonight.


-- We sceptics have a valid point, we should look skeptically at grand


plans and utopian visions. We have a right to ask what the European


Union should and shouldn't do. should Britain try to do to the


political organisation of which we are part. We will hear from among


others, the man who was once one of Britain's European Commissioners.


President Assad's troops continue their violence, as The King of


Jordan says it is time for him to go. A glimpse into the thriving


cottage industry of phone hacking on day one of the Leveson Inquiry


into the media. Also tonight: have acted in way that violates my


obligations to my family, that violates my, or any sense of right


or wrong. We talk to the New York Attorney-General who tried to clean


up broad street and got brought down by a sex scandal. How did a


culture of greed take such firm root in American business. The


stuffest challenge to Europe since the Second World War, was the way


the German Chancellor put it today. We're no closer to the lasting


solution to the euro cries s but everyone agrees if there is one, it


will carry the stamp "made in Germany". Astor David Cameron, he


claimed tonight to be a natural secretaryic, yet maintained that


Britain had no -- sceptic, yet maintained that Britain had no


choice but to remain in the EU. They support the two-tier Europe,


with Britain some how in the outer teir. What should Britain be trying


to achieve. Europe has been shaped by centuries


of shifting alliances and conflicts. Not so great for conflicts, but


great business for the couldn't tent's map makers. Every few years


-- continent's map makers. This is 1870, pru,ia at the centre, hand


reaching for the low countries. France, flinching, weapons raised


and Britain an old hag, the caption reads "angry and isolated". You


could probably construct just as humorous a map as the modern Europe.


Maybe slightly less funny Silvio Berlusconi has gone, but funny,


nonetheless. What hasn't changed is the serious point, the central


position of German power at the heart of the continent, with a sort


of spiral of reaction from the other countries around it. With


Britain, or Britain on the side lines there, deciding how best, if


at all, to get involved. Over 140 years have passed between that map


and the Prime Minister's speech tonight at the Mansion House.


Costumes of some, however, that are more 189th than 21st century. The -


- 19th than 21st century. The Prime Minister talked about a Britain


that won't leave the EU, but help shape it. And in words that will


annoy some Liberal Democrat colleagues, he talked about we


sceptics being right to question plans. Now is the question to ask


what kind of Europe do we actually want? For me, the answer is clear,


one that is outward looking, with its eyes to the world, not gazing


inwards. One with the flexibility of a network, not the rigidity of a


block, whose institutions help by connecting and strengthening its


members to thrive in a vibrant world, rather than holding them


back. Mr Cameron talked of a generational shift, one has post


Cold War rather than post Second World War. But we were no nearer


finding out where Britain will reorder Europe, and more


specifically what the British blueprint looks like. Some think


the Prime Minister needs to get on with mapping out his ideas. There


is a real danger with David Cameron of being seen to stand on the side


lines. There are 17EU countries inside the eurozone, but another


ten who are outside it. Some of them are slated to join, I will be


astonished if they actually do. There is a renegotiation coming,


the map of Europe is about to be redrawn. And David Cameron should


be in there, leading that and providing ground for renegotiation.


How might the map look. The 27EU countries are forming into


different groups. The 17 countries that use the euro in a core,


leaving Britain among the ten peripheral countries, perhaps


marginalised in their influence. But, it is argued, if the euro at


some future date breaks up, other countries may join the periphery,


Greece, Portugal, Italy, Spain or Ireland. Unfortunately it won't


work that way. If you talk to countries like Poland, or Sweden,


they don't want to be part of a group led by Britain. Many of the


ten not currently in the euro want to join the euro. Like Poland. And


are prepared to put up with the rules and regulations required, and


want to be part of whatever organisations and clubs the Germans


establish for the eurozone. Other countries like Sweden, which don't


intend to join the euro any time soon, still don't want to be


associated with the British. The British have rather a bad


reputation as being against integration. David Cameron and


Nicolas Sarkozy are, in front of the cameras, at least, all Bonn hom


me. But behind the scenes there is -- bon homie, there is exasperation


at us barking from the side lines. Could Britain change the grouping,


threatening to veto to sort out the euro unless we got what we want at


the same time. I was in Berlin talking to Mrs Merkel's adviser,


they are clear that any British attempt to veto the new treaty


would lead to Germany and its partners going ahead with something


else, another treaty, which doesn't require a British signature,


outside the framework of the European Union. If the Germans are


wanting to play the game of saying they are not listening, I think we


have to really assert ourselves. There is no way that the ten


countries inside the European Union, who are not in the eurozone, should


allow themselves to be tampered by the Germans and the French, simply


because they have got themselves into a mess, form ago currency,


which some of us warned wouldn't work.


So it is not time to pencil in the new map just yet. Frustrating,


perhaps, but how about this First World War handerchief map, where


Germany's central position makes it rather vulnerable!


Shortly before we came on air I spoke to Lord Mandelson, who monk


his many accomplishment, being a former EU Trade Commissioner. I


asked him where the euro had gone wrong? It has given Europe ten


years of moderately strong growth, low inflation, the problem is the


Governments where it has lacked a strong monetary authority, in the


form of the European Central Bank. In my opinion and the opinion of


others has been too legally and operationally constrained. Secondly,


it has not had an effective fiscal governance. It has allowed its


members to go different ways fistically, storing up problems


which have -- fiscally storing up problems which have been way laid


by the financial crash. It is clear the Germans think the only way for


this thing to work is to have a much closer political and fiscal


union within the eurozone? I think everyone is agreed, Germany and


France and others agreed, that we need completely to recast the


fiscal Governments. There needs to be a fiscally unified governance


for the eurozone. Something we haven't had in the past. Where the


disagreement exists, where I mentioned before, is the role of


the monetary authority, the European Central Bank, Germany, in


my view, is in the wrong place. I believe not only can Italy only be


saved by the ECB making absolutely clear that it will be a lender of


last resort, that we will, through the ECB, throw everything we have,


if the market panic spreads to Italy, and I think also a bank that


would stand behind other members of the eurozone that face similar


problems in the future. If we don't do that, I don't think we will get


over the crisis and if we don't do that we won't be able to repair the


original design flaws in the eurozon. There are ten nations --


Eurozone. There are ten nations not in the eurozone, why doesn't


Britain aim to become the leader of that block? Because it has declined


to do so. What Mrs Merkel has done recently, she has said to the Poles


and the British, and said you are out of the euro, some of you want


to come in, and some of you are waiting for the economic


circumstances to do so. Others, if you like, Britain, say you don't


ever want to come in. Her offer was a very, very important offer indeed.


It was to say to the "outs", as we are and the Poles and the others,


we will form a europlus group, supported by a europlus pack, and


we will allow you to sit at the table, and take part and share in


the decision-making, the key economic decision-making that


relates to the eurozone. The British Government, for reasons I


find it almost impossible to comprehend said, no thank you very


much, we don't want to do that. are outside the eurozone, and


outside the eurozone...Not Choosing to be outside the eurozone, but


choosing to be outside it and not showing up at those councils and


bodies where the decision making, and economic discussions of the


eurozone are taking place. So we are doing two things, we are saying


we are not coming into the eurozone, and secondly, we don't want to be


part of any europlus pack, or group, because we don't want to have


anything to do with your decision making either. You still think we


should join the euro? If we are not members of the euro, and nobody is


proposing we should be. You were proposing we should be? Indeed I


was arguing for it. Only a couple of years you claim it had been a


tremendous success? It is a very important point. It is an important


point? We are here now not ten years ago. It was two years ago


when you said the euro had been a tremendous success and we could not


stay out of it indefinitely? I see no point in gloating at the fate of


the euro, or with some sort of smugness and saying aren't we


clever for not being in it. It is nothing to do with smugness or


gloating, I'm merely pointing out to you that two years ago you said


this was a great success and we couldn't stay out of it


indefinitely, do you still think that? And if and when the


circumstances were right, and Britain's advantage to go in, we


should certainly consider doing so. Now? Not now, of course not now.


Some time in the future, you still believe this now? In the meantime


there are a whole set of questions for us, and dilemmas facing Britain,


about our relationship to the European Union, as the eurozone


becomes a tighter and more integrated block. We have to decide


where we are going to stand and what we are going to do in those


new circumstances, and how we are going to deal with the dilemma that


presents to us. When you said Britain cannot afford to say no to


the euro indefinitely, that it was in Britain's national interest to


go into it, you still believe that? Jeremy, there is no proposition, by


me or anyone else, that we should go into the euro. This was your


proposition? In whatever year you are quoting. That was 2003, 2009,


you said it was obviously the case Britain should join the single


currency, you said it is perfectly clear that the euro had been


success? We can play games and score points. I'm not playing games,


I suggest your judgment is flawed because you thought it was such a


brilliant scheme? In what way is my judgment flawed now when I say to


you, if we do not maximise our influence within the European Union,


we are going to become more and more detatched from it, less able


to influence its direction, and less able to stand up to our


interests. Why are you being so defeatist, isn't this fantastic


opportunity for Britain to reshape Europe. Having seen the eurozone


become a calamity? Absolutely there is a chance to exercise more


influence, and I would say this to you too, had we been in the euro,


had we been members of the eurozon. Magistrate mess we would be in


then? We might have been able to avoid the mess that has resulted.


Britain is very good in Europe in saying that proper rules,


intelligently formulated should be well applied, and then enforced. We


are very good in Europe. Let me make the point, we are very good in


Europe at saying to our partners, look, this danger, that elephant


trap is opening up. We have got to anticipate, we have to anticipate a


whole series and set of different circumstances, and we have got to


work together to avoid them. If we had been in the euro, we would be


take orders from Berlin? We weren't in the eurozone, we didn't exercise


that influence, it is now a very big challenge for Britain, both to


help Europe repair what has gone wrong in the eurozone, but also to


create a future, and a direction for the European Union, that is not


just good for the whole of Europe, but good for Britain as well. And


my fear, is that the way in which we are conducting ourselves now in


relation to the European Union, we're not only standing outside the


eurozone for reasons that are obvious to all of us, but we are in


great danger of seeing those members of the eurozone, more


tightly integrated, closely knit, taking their decisions in their


interests, on economic matters, which are of fundamental importance


to our economic future, with us being able to exercise hardly any


influence or power or sway over that whatsoever. You tell me how


that is in Britain's interests, it is certainly not. Lordson, thank


you. With us now are -- Lord Mandelson, thank you. With us is


the former minister Malcolm Rifkind and my guest from Paris.


Isn't the inevitable consequence of what is happening in the eurocrisis,


a marginalisation of countries like Britain? I think it has happened,


you are right to mention it. There is a feeling that the German and


the French have. First of all, there is a two-speed Europe, which


has in way been created by the attitudes of the UK, which is not


in the eurozone, not adopting the binding chartered and of rights,


and neither some provisions of the treaty with regard to justice and


that kind of thing. So I think that, in way, for the first time, there


is a true dilemma, as you remember Churchill said, regarding Great


Britain and the European construction, we are with it, we


are not of it. That was true years ago, but nowadays, when it is felt


that there is no solution of eurocrisis, apart from a strong not


only economy governance of the eurozone, but also a political


integration of this zone of solidarity, of necessary solidarity,


between the 17 and perhaps more member states, for the first time


in its history, since it has access to the EU, Great Britain has a real


choice to be in or out. I think that this choice is right now, and


not later on. Not such a bad thing to be marginalised? We are not


marginalised, the main error madame has made, like many other people


she talks about a two-speed Europe. That implies that all along we will


end up at the same destination, some getting there a bit later than


others. It is not a two-speed Europe. The debate happening in


Europe is actually about what kind of European Union we actually


aspire to. Whether it is a European Union where all countries have to


accept the same level of integration at some date. Or


whether we accept that Europe, not only now, but permanently, will


have diverse kinds of membership, and some of us will never be in the


European single currency, some of us will wish to go further, the


French and the Germans were very good reasons may want more


integration. May want to respect our right not to go in that


direction. And we respect their right to go in that direction.


is this so unappealing to other members of the European Union?


is appealing to some and unappealing to others. Of the 27


countries, 17 are in the eurozone, ten are not. Some are in there.


Most of them are hoping to join it? They were, but I'm not sure now.


That is not the point, each country has the right to make up its own


mind. Europe because it is 27 countries, it will soon be over 30


countries, cannot ever aspire to reaching the same destination and


degree of integration. If it tries to do that it will implode, that is


in no-one's interest. I wonder how much choice France, for example,


really has. The plain fact is, it is Germany that is running Europe


now. And the German position is understandably a great deal


stronger than ever it was, and the orders for Paris are made in


Berlin? Berlin has the leadership at the present time. I admit it. It


is right, and it was the case with the constitution as well, as you


remember. Germany is really now not only facing great issues, that is


to say either to support the euro and make the eurozone survive, or


to be an actor of the collapse of the eurozone and of Europe as well.


I have no problem with Germany taking the lead in so far as we


have choices to make, and we have to tell the truth to our people. I


think that in the UK, for instance, you have to launch a referendum if


Mrs Merkel pushes ahead to a change of the treaty. So the referendum is


the truth. I say that the French, regreting very much the way of the


French Government, addressing the issue of Europe, during the


campaign for this referendum. I think it is absolutely necessary


now that the people of Europe have their say, and that they are


telling the truth. That is to say, you cannot belong to an NTT, as


Europe, without transfering powers, and we have been so far that either


there is the end of Europe, or we go further. This is the true choice


of today. This is an opportunity, then, isn't it? It is an


opportunity, if there is a desire to show some flexibility. I believe


that countries like Britain should not veto France and Germany, and


others, if they wish to go for greater integration, nor should


they be able to prevent countries like the UK, saying that membership


of the European Union doesn't require European formity. If there


is an inner core of -- Union formity. If there is an inner core


of countries, whichever way they will be drawn in the future, we


will find ourselves excluded from crucial decisions? We have taken a


conscious decision. We won't have much influence on eurozone issues,


we are not maybe of the eurozone. We have done that to preserve our


independence, to determine our own interest rates, to determine


whether we have quanative easing in the UK and control of our own


monetary policy. That is what independence is about. The sharing


of sovereignity is crucial to the European Union, but the degree of


sovereignity you are prepared to share should depend on your own


national circumstances. For Britain, for Sweden, for Denmark, for a


number of other countries, we have come to national conclusions that


consistent with our membership of the European Union, we are not


prepared to go for full integration, other countries wish to go further,


Europe will flourish if each country respects that a la carte


Europe, which is actually the only way Europe can survive in the long-


term. Thank you very much both of you.


King Abdullah of Jordan today said it was time for President Assad of


Syria to stand down. For a dictator who believes he stands for Arab


unity, he behaves in a strange way, his organisation has been suspended


from the Arab League. But Assad shows no sign of willingness to


quit the stage himself. There is increasing anxiety of what you


might decided to do to hang on to power, not just killing his own


citizens, but other citizens too. Syria's revolutionaries have had


little to celebrate since the start of their uprising. But today, as


more deaths were reported in fighting, they briefly cheered.


Thanking other Arab states for supporting them by suspending their


country from the Arab League. hope to, from this regime, to


recognise that the time is up now. And the time is to step down and


let the people decide. But the reaction from thousands of other


Syrians, millions according to the authorities, who have been on pro-


regime rallies, was one of fury. Some came of their own will, some


were encouraged to attend, by an outraged Government. TRANSLATION:


The Arab League decision is illegal, it has not been issued by a


unanimous vote. It doesn't rely on the legality of the charter of the


league. For a country that has always believed it was at the


forefront of the struggle for Arab unity, the league's decision is a


major humiliation. And today, in another affront, Syrian President


Bashar al-Assad faced the first public call for him to step down


from a fellow Arab leader. I would believe if I were in his shoes I


would step down. For a long time, Syria's Arab neighbours did their


best to turn a blind eye to what's been happening in the country.


Reluctant to take on a state which such strategic weight in the Middle


East. Now, they have taken the historic decision to come off the


fence. Governments like Saudi Arabia's, which have long disliked


President Assad, but which hate revolution, have now committed


themselves, at least morally, to supporting revolutionaries. But the


suspension of Syria from the Arab League, won't be enough in itself,


to force Mr Assad from office unless it is backed up by practical


action. His is a regime which still has powerful allies, both in the


region, and around the world. Within Syria, President Assad has


faced opposition in towns stretching in an arc around the


country. Abroad, his enemies now include most members of the 22-


strong Arab League. They also include Turkey, a one-time ally,


that now hosts Syrian opposition groups, the European Union, once


the main user of Syrian oil, which has now banned such imports, and


the United States, which has also imposed sanctions. But Mr Assad can


still count on the support of the two militant Islamist movements,


Hezbollah in Lebanon and Hamas in the Palestinian territories, which


has long sponsored. Its closest all lie, Iran, whose revolutionary


guards are supposed to have advised Mr Assad on how to suppress


protests, its neighbouring trader, Iraq, which abstained on the Arab


League vote, and furd afield Russia and China, very -- further afield,


Russia and China, very wary of aproving any criticism of Damascus.


With fighting intensifing in recent days, what some opposition


activists now hope for is an internationally imposed no-fly zone


over Syria. That was ruled out at the weekend by Qatar, which


currently chairs the Arab League. More economic sanctions are likely,


they may not have much immediate effect. Syria is not surrounded, on


one side it has Iraq, almost a continuation of the Syrian economy


in a sense. On the other said, Iran, friendly to it, and on the other


side, Lebanon. This time, for the first time in four years, Syria has


had a wonderful bumper crop, after four years of drought and poor


crops. Can a diplomatically cornered regime use its


relationship with Iran and clients Hezbollah to cause trouble in the


region, provoking conflict with Israel to deflect from the uprising


at home. In the case of Hezbollah, the difficulty at Hezbollah, their


main allegiance is with Iran. Hezbollah could be used by Iran,


were Iran to be taked militarily, or even if Syria was to be taked


militarily. If we are in just talking about economic pressure,


Hezbollah will be feared and held back, that any action could unleash


Israeli action against Hezbollah or Syria itself. Inside Syria the


bloodshed continues. Today opposition footage appears to show


troops again attacking the rebellious city of Homs. Many think


civil war is approaching. It is for fear of spreading conflict that


Arab and other powers have been so cautious towards Syria for so long.


But the stakes in this powder-keg of a region, are slowly rising.


With us now is the Syrian writer and journalist Rana Kabbani, we are


joined from cashing done by the former assistant secretary at the


US State Department, now at the council on foreign relations. Rana


Kabbani, do you think Assad is on the brink now? I absolutely do. I


think what has happened this week is the forming of a consensus,


among the Arab states, among the immediate neighbours of Syria,


including, very importantly, Turkey, and Europe and the United States.


Before we kept hearing about giving him time, that he was a reformist,


that there was still hope that this regime could be saved. But I'm


believing very firmly that is now passed. Do you think he's on the


edge too? I wish he were, and I wish that Rana Kabbani was right,


and is right. But I'm not convinced. It is true, the regime is becoming


internationally isolated, and isolated in his own back yard. But


he still has many tools at his disposal, within his own country.


He has the army, he still controls the major cities. The business


elite is behind him. The sanctions imposed on Syria are hurting the


country, but are they hurting the people in control? I'm not sure


exactly yet how this international isolation translates into his


departure. Are you worried about what he might do if he's cornered?


I'm very worried about what he does. First of all, this is a man who has


proven that he is prone to miscalculation, and to recklessness.


He's done it in Lebanon, recall earlier this year, twice he has


sent Palestinian refugees to the border with Israel, to meet their


own death. He is someone who is not the calculator his father was. So


the foings for him to miscalculate -- potential for him to


miscalculate and be reckless is quite high. You mean the


possibility of his encouraging Hezbollah to attack Israel, or


something? That is one possibility. I don't think Hezbollah necessary


takes its orders from him. But he has many tools at his disposal. As


we have seen, he has killed over 3500 people of his own country. He


doesn't show any sign of leaving. And indeed, the Arab League


proposal really doesn't leave him much room. If he were to abide by


the Arab League proposals, he would be signing his own political death


warrant. I think he will fight it out. I listened to the Foreign


Minister Muslim Brotherhood Muslim's speech this morning, from


I listened to the Foreign Minister's speech, it was so


delusional, it reminded me of the last few weeks of Saddam Hussein


and Colonel Gaddafi's regime. It was the same kind of living in


never-never land, and not acknowledging the depths of the


crisis the isolation of the country, the unbelievable crimes that have


been committed, that have been called by Human Rights Watch,


crimes against humanity. And the fact that the whole Syrian


population, including the Christians and business community,


is now against him. No-one denies the depth of the opposition, no-one


denies the distastefulness of the regime, the question is, how


dangerous he is? I think he's a busted flush, quite frankly's


dangerous, and has always been, as has been his father, to the Syrian


people. What about the subsidiary point then, supposing that he does


indeed go, supposing you're right, he really is on the brink of giving


up, is there a danger then of a sectarian conflict in Syria?


don't think so. Simply because the Syrians have watched the example of


Iraq very carefully, and have always said they accept this


totalitarian regime, because we don't want to end up in a state of


occupation or civil war. They are very conscious of the fact that it


is a country of many minorities, of many races, of many languages, and


the future needs to be a democratic and pluralistic one. That is what


we have waited for. Do you fear a sectarian conflict in Syria? Very


much so. I think one of the driving forces here behind the Arab


League's move to action, is their fear of sectarian conflict. I think


they worry that Syria is on the brink. The Syrian opposition,


however valiant and Northern Ireland its cause, still has not


convinced -- nobble its cause, still has not convinced the


officials in Syria they would be better after Assad lives. It is not


the politicians and Christians like Assad they are worried about the


incumbent after. It is the revolution's job to convince them


there will be a better day after Assad. There is that sectarian rift


that no-one wants but is emerging that is driving the Arab League to


ratchet it up lest it implode. disagree with that, if Syria has


been sectarian, it is the result of the Assad family's regin. They have


made everything so that members of their own community have had the


army in their grasp, and the business community. And that is why


we have seen sectarian hatred rising, but once they go, I think


that will abate. Thank you very much.


Once upon time they talked to my next guest as a future President of


the United States. Eliot Spitzer made his name as the so-called


Sheriff of Wall Street, an Attorney-General who went after


corrupt businessmen, and be they never so powerful. Tomorrow night a


90-minute documentary in the Storyville slot on BBC Four tells


his story, and how his crusade made him powerful enemies, so that when


he fell, he fell like Lucifer. Caught using prostitutes.


He was known as the Sheriff of Wall Street, Mr Right. But then it all


went wrong. He knew that his entire political career was on the line,


and ultimately vice took over virtue, he couldn't control himself.


I remember one time he was trying to book an appointment. I just


remember thinking to myself, I was like this man is so paranoid,'s


just going to attract a situation. You know, because he was just


asking for it. By the time he became governor of New York, Eliot


Spitzer had a reputation. His eight years as New York attorney yen, had


seen him sue coal fire plants for pollution, and he uncovered fraud


in the pharmaceutical industry. And then he took on Wall Street.


job had been a second teir position, focused on regulating crooked car


dealers, Eliot Spitzer focused on Wall Street, the biggest guys


around. Spitzer's premise, which was right, was that Wall Street


can't be left to regulate itself, or terrible things will happen.


went after market analysts who were tipping stocks in which privately


they had no faith. Merrill Lynch became his target. My office has


reached an agreement that will ensure the integrity of advice on


which investors depend. He broke the mould and went on fast and hard,


he got things done in weeks and months that took federal regulators


years. He would get business on side to force the industry to


change the way it did business, a lot of people thought that was


outrageous. He also took on CIO's outlandish bay rates. The head of


the New York Stock Exchange had an annual salary of dollar million --


millions and millions of dollars. He sued them. I have been rich and


poor, rich is better. Jew can't pay the head of a not-for-profit that


much money, close to $00 million, it is simply too much, it is not --


$200 million, it is simply too much, it is not right, it is against the


law. This is going after elephants. In the end the elephants kept the


cash. Spitzer had other targets, there was the head of the AIG


insurance company, worth $157 billion, with 92 employees. Spitzer


alleged the -- 92,000 employees. Spitzer alleged the books were


being cooked. He said, I will destroy you. Those are strong words.


I had never heard those words like that before. I couldn't quite


believe it. But Eliot Spitzer was about to fall because of his


personal dealings in an industry which was also booming. The FBI was


investigating a prostitution ring, Spitzer was client nine. His escort,


trading his Kirsten, was one Ashley Alexandra Dupre. Some breaking news


this afternoon, the New York Times is reporting that governor Eliot


Spitzer of New York has informed some of his senior administration


officials that he had been involved in a prostitution ring. You say the


work, but you haven't said the words. The work? Prostitution?


Escort. Escort. What's the difference? Escort. In recent


months, while Eliot Spitzer's reemerged to comment on the


financial crisis, Ashley Dupre has been back in the limelight, to his


supporters he may have been guilty of had you bris, they say he was


also a prophet, facing down the financial villains who put the


world in peril. You can see the Storyville documentary about Eliot


Spitzer, Client 9: The Call Girl And The Governor, on BBC Four at


10.00pm. Let's talk to Eliot Spitzer from New York. There is a


profound change in the way capitalism works in the world, what


do you think it is? There is anger and frustration over the fact that


the 1% at the very top of society are doing extraordinarily well. I'm


a capitalist, I believe people should do well and work hard to do


well, but the system has to be fair. It can't be rigged. People came to


realise there was so much self- dealing on Wall Street, people were


paying themselves huge bonuses on salaries by picking the pockets of


the middle-class and rigging the system. I believe in a fair market


system that generates wealth, not an opportunity for the wealthiest


to pick the pockets of the middle- class, and occupy Wall Street, to a


certain extent, the Tea Party as well, the analog of occupy wall


treat on the far right, are there because of the frustration of the


middle-class, that some how those at the top are begin iting unfairly.


Nobody worries they are benefiting, but when it is unfair. Is this a


failure of regulation, or some how a more profound moral change that


people just think differently about their relationship with society?


in so many issues, in questions of that nature, the answer is both. I


don't say both to in any way hesitate to make a choice, I think


those who watched the introduction to this interview, and it was


painful for me to listen to for obvious reasons, will understand I


will go right at the problems I believe are there. Yes it was


failure of regulation. I said over and over when I was tone general of


the state of New York, I would not -- Attorney-General of the state of


New York, I would trust the NCC to do house cleaning for me, they were


weak in many levels. It was a moral failure on those who are running


major companies, who viewed it as their own obligation to make as


much money as they could. They too often overlooked their fundamental


obligation to honesty and integrity in the market place. We are now at


a moment when we have to rebuild the very premise on which we


operate our financial services sector, in order to rebuild the


jobs in the middle-class that are we heart of our domestic economy in


the United States, likewise in England and the rest of Europe.


anything changed as a consequence of the crash? I think there has


been a serious questioning of much of what led up to it, I'm not sure


we have yet learned the right lessons. I don't mean to be


partisan, I would hope the history here would lead to a non-partisan


resolution, but if you listen to the Republican party, once again,


speaking as though the market unfeterd by any regulation will get


us to the appropriate place -- unfettered by any regulation will


get us to the appropriate place is not looking at history. I'm fan of


the market, they require rules as a soccer and football game, wow the


rules and enforcement of the rules -- without the rules and


enforcement of the rules you have mayhem. Have you been disappointed


by how President Obama has gone about his task? Well, look, I have


been in an executive position and know how difficult it is to effect


change. Having said that, I have been disappointed in what Timothy


Geithner has done, in particular, he was in charge of the New York


Fed, the entity that oversaw the markets, he created the structure


that collapsed, he has not been a voice to reform, anywhere close to


adequate to the task, in my opinion. I think there are other voices. I


think that you can look to the Bank of England, Mervyn King and others


in Europe, who have been much more articulate and forceful in


pinpointing and highlighting the changes we need, the separation of


commercial and investment banking, eliminating proprietyry trading.


you regret because of what happened, you can't be part of this process?


Of course. First of all, just so it is clear i regret what I did, I


have said that over and over. I will say it again. Yes I regret, I


apologise, at a different level, I miss being a part of the dialogue


that is on going that is much necessary and needed the effort to


change the structures that dominate financial services right now.


Hopefully we will get where we need to get. Do you entertain any hopes


of possibly coming back into public life? There are many different ways


to par piss Tate in public life. I A -- par -- Participate in public


life. I have a part in a CNN show to write. I'm deeply involved in


the family business and I teach. Being involved in elective office


is not the only one. I will pursue different opportunities in due


course. The inquiry to try to find out what the tabloid newspapers


have been up to got under way today, at the Royal Courts of Justice, it


hopes to report within the year, with some recommendations, on as


the chairman put it, who guards the guardians. On the opening day there


were some disclosures at the now closed News of the World, was a lot


more widespread than previously known. Richard Watson is here, he


has cover the story from day one. What have we learned today? A lot,


they designed it so they would receive significant information on


day one. We heard from Robert Jay QC who said police information


indicated phone hacking had been going on from 2002-200. The old


story was one rogue reporter, Clive Goodman, and Glenn Mulcaire, the


reporter and the private detective. In Glenn Mulcaire's notebooks there


were references to no fewer than 27 other jouermists or employees of


News International, casting the net very much more widely one of these


journalists had apparently made 1, 453 requests for information to


Glenn Mulcaire. Other newspapers were drawn in too? Interestingly


the notebooks are proving a fertile sorgs of information for the


inquiry and police. There -- source of information for the inquiry and


the police. There are references to the Sun and Mirror on some of the


notes, indicating the net will go wider than this. On Newsnight rewe


veeld back in the summer that David Mills had claimed that an unnamed


Mirror journalist had phoned her up quoting a voice message she had


made to Paul McCartney, verbatim. Trinity Mirror denied it at the


time, and said journalists operated within the law. New developments in


the border story, May maes embarrassment. Brodie Clarkson, the


man who resigned after -- Brodie Clarke, the man who resigned after


the fiasco. He's due to give evidence tomorrow. The Labour Party


have indicated they have e-mails from UK Border Agency staff which


they say show there was widespread concern about this relaxation. They


refer to one in particular, one from Durham Airport, apparently,


where some individual was saying that passports weren't being


checked, watch lists weren't being checked from private planes. That


is other airports as well, so they say. Thank you, that's it for now.


The great constitutionalist, Walter Bag it said the cure for admiring


the House of Lords is to go and look at it. He never saw this. It


happened the other day, as the former Defence Secretary, Lord King


was talking about Poppy Day, and the fact that fewer and fewer


living people remember the war. The figure sitting next to him is


Baroness Trumping ton who worked in novel intelligence during the war.


She's 8 and still knows her semiphore. There is a few survivors


still there. I remember meeting Sir Harry Patch the last survivor of


the lot. Gradually they faded away. Then the survivors of World War II


started to look pretty old too, as my noble friend Baroness reminded


me claiming to be one of the only survivor in this House of those who


gave great service to their nation Pretty grey first thing on Tuesday


morning. Another drab start to proceedings, but unlike Monday,


hopefully it will get brighter during the day, across parts of the


south and parts of Wales. On Monday North West England and Scotland


should be favoured for a little bit of sunshine. To the east of the


Pennines it will stay mostly overcast. A lot of cloud through


the Midland, brightening up a touch through East Anglia and the


southern counties of England wrecks should get a little bit of sunshine


-- we should get a little bit of sunshine like Monday, west Wales


will see sunshine. Elsewhere cloud year, but brighter than Monday. A


lot of cloud covering Northern Ireland as well. But again, along


the north coast it may well cheer up, temperatures could respond up


to maybe 12 degrees. North West Scotland will be favoured for


sunshine. Not so much fog around here, as there was during Monday.


The eastern side of Scotland does stay rather grey. Wednesday, it


should be brighter, again so a better chance of seeing sunshine.


We could just see thickening cloud bringing rain into Northern Ireland


later on Wednesday, that cloud could bring rain into parts of


South Wales and maybe the far South-West of England. We will see


the cloud increasing, across Devon and Cornwall, rain arriving here


Presented by Jeremy Paxman.

With talk of a two-speed Europe emerging from the eurozone financial crisis, Newsnight asks what Britain's future relations with the European Union are likely to be.

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