:00:10. > :00:15.Confirmation of the bleeding obvious, the outlook for the UK
:00:15. > :00:19.economy is only getting worse. Mervyn was knighted Sir Mervyn this
:00:19. > :00:23.week, but there is nothing arising about today's growth figures from
:00:23. > :00:31.the Bank of England. The outlook for growth of the world economy has
:00:31. > :00:35.worsened since August. That is also true here in the UK. Where activity
:00:35. > :00:39.could be broadly flat until around the middle of next year. We will
:00:39. > :00:42.ask a Treasury minister to confirm whether they still expect to
:00:42. > :00:49.eliminate the deficit in this parliament. In Europe, a very rude
:00:49. > :00:54.message from Germany to Britain, on the proposed city City transaction
:00:54. > :00:58.tax, pay up or shut up. It is poverty to you and me, maybe, but
:00:58. > :01:05.it is money to vulture funds. How one of the world's poorest nations
:01:05. > :01:10.may be made to pay millions to western scavengers. Is it fair that
:01:10. > :01:14.your vulture fund sought $100 million from the Congo. How can
:01:14. > :01:18.some of these people be running for President, when they wouldn't even
:01:18. > :01:27.pass an interview to appear on Newsnight. REPORTER: You agreed
:01:27. > :01:33.with President Obama on Libya or not? OK, Libya. I do not agree with
:01:33. > :01:43.the way he handled it for the following reason, em, no, that's a
:01:43. > :01:46.
:01:46. > :01:50.different one. As was predicted last night, today's unemployment
:01:50. > :01:53.figures showed there are now over a million young people without a job.
:01:53. > :01:57.Worse, the Bank of England believes the growth, which might create jobs,
:01:57. > :02:02.is going to be much slower than previously expected. 1% next year,
:02:03. > :02:06.not much higher than the chances of Mervyn King yodelling on the X
:02:06. > :02:10.Factor. Worse still, it looks for likely than ever that the
:02:10. > :02:13.Government will fail to meet its deficit reduction target by the end
:02:13. > :02:20.of the parliament. The Government has repeatedly said there is no
:02:20. > :02:30.plan B. In these circumstances, should there be?
:02:30. > :02:36.'S got gloomer. -- he's got gloomier We are facing a difficult
:02:36. > :02:40.time ahead. And gloomier. Every month the governor of the Bank of
:02:40. > :02:46.England has been getting gloomier every month. Despite a new set of
:02:46. > :02:49.glasses and a new Knighthood, Sir Mervyn wasn't cheered up at all. He
:02:49. > :02:53.has halved his growth expectation for next year, now just 1%. The art
:02:53. > :02:57.of growth forecasting isn't just coming up with the numbers in the
:02:57. > :03:00.first place, it is explaining why the last set of numbers didn't pan
:03:01. > :03:05.out. Despite the easier monetary stance, growth over the next few
:03:05. > :03:11.quarters is likely to be markedly weaker than in the August
:03:11. > :03:14.projection. This reflects the impact on the United Kingdom, of
:03:14. > :03:20.the deterioration in prospects internationally, working through
:03:20. > :03:25.weaker net trade, higher credit spreads, and the likelihood that
:03:25. > :03:29.elevated uncertainty will cause businesses to postpone investment
:03:29. > :03:34.and households to spend less. mer viing emphasised that all of
:03:34. > :03:39.these growth forecast -- Mervyn emphasised that awful these growth
:03:39. > :03:46.forecasts are based on -- all of these growth forecasts are based on
:03:46. > :03:51.nobody knows on, the outcome of the issues in Europe. Adding to the
:03:51. > :03:55.uncertainty with the Government's plans to deal with the deficit.
:03:55. > :04:00.we outperform the impact won't be too bad in the medium term, it will
:04:00. > :04:03.add to debt, it is managable within the Government's own fiscal rules.
:04:03. > :04:06.If this is permanently lost output, that becomes more of a long-term
:04:06. > :04:11.problem and potentially requires more long-term pain, in terms of
:04:11. > :04:15.cuts and tax increases to balance the books. All eyes are now on the
:04:15. > :04:20.assessment that the Chancellor is due to give to parliament in his
:04:20. > :04:24.pre-budget report on November 29th. The same day that the office for
:04:24. > :04:27.budget responsibility gives its updated forecast. In the meantime,
:04:27. > :04:30.ministers are emphasising how, well, they will see if you can pick out
:04:30. > :04:34.the word the business secretary wants us to take on board. We know
:04:34. > :04:38.economic conditions are very difficult, and we have got a very,
:04:38. > :04:43.very difficult inher taepbsance, very difficult external
:04:43. > :04:45.circumstances, a period of difficulty, and difficulty in the
:04:45. > :04:49.world markets. Why difficult? Remember the big row between the
:04:49. > :04:55.parties about how fast to cut the deficit. This is the line that
:04:55. > :05:00.George Osborne projected in his first budget. This less steep line
:05:00. > :05:04.is the one Alistair Darling offered in his last budget as Chancellor.
:05:04. > :05:07.But both are steeper than the latest Treasury average of
:05:07. > :05:11.independent forecasters. If true, the Government will fail to achieve
:05:11. > :05:16.an important economic target. for the Government becomes harder
:05:16. > :05:20.each time these growth forecasts are downgraded. The Government will
:05:20. > :05:24.not now, under most reasonable assumptions, reach budget balance
:05:24. > :05:29.by the end of this parliament, so the really hard thing will be
:05:29. > :05:35.likely to have to go into the next parliament with more public
:05:35. > :05:38.spending cuts, more austerity. Prime Minister today was meeting
:05:38. > :05:43.young high-tech entrepeneurs, some big ideas and fast from them would
:05:43. > :05:46.really help. However, the big question, how to stimulate growth
:05:46. > :05:51.quickly, without adding to borrowing. The Chancellor will have
:05:51. > :05:54.a difficult judgment in the PBR, he's going to have some more gloomy
:05:54. > :05:57.forecasts from his own independent fiscal watchdog. He has not got a
:05:57. > :06:01.great deal of room for manoeuvre, he can't spend a great deal of
:06:01. > :06:05.extra money if he's going to keep to his own fiscal rules. Within
:06:05. > :06:08.that limited manoeuvre, how is he going to produce policies which
:06:08. > :06:13.make a difference to growth. That is the challenge he has set himself,
:06:13. > :06:15.that is a pretty difficult challenge for him to be facing.
:06:15. > :06:19.answer coming from Liberal Democrats, is to use other people's
:06:19. > :06:22.money, to pay for things like new houses. The thing at the moment is
:06:22. > :06:30.that the pension funds are sitting on a very large amount of money,
:06:30. > :06:36.which they are looking for long- term, secure place, and house
:06:36. > :06:39.something an obvious place for that money to go. That and some of the
:06:39. > :06:42.other infrastructure areas, road or rail, we can look to the pension
:06:42. > :06:48.funds, who are basically coming to Government and say can you help us
:06:48. > :06:52.spend our money. But, before we get too cheerful,
:06:52. > :06:56.remember that these comparatively gloomy forecasts are predicated on
:06:56. > :06:59.the worst not happening, on a eurozone meltdown being avoided. If
:06:59. > :07:04.that all goes belly-up, all bets are off.
:07:04. > :07:08.With us now are the Treasury minister, David Gauke, and the
:07:08. > :07:14.Shadow Business Secretary, Chuka Umunna. Now, David Gauke, are you
:07:14. > :07:17.still going to eliminate the structural deficit by 2014/15?
:07:17. > :07:20.Government's policy remains that is what we will do. It is worth
:07:20. > :07:23.pointing out why. We are seeing across all sorts of countries,
:07:24. > :07:29.great problems because they don't have fiscal credibility. That is
:07:29. > :07:34.why the likes of Italy and grease and now France are taking -- Greece
:07:34. > :07:37.and now France are taking austerity measures. When asked are you going
:07:37. > :07:42.to, you said that is the policy, that is not the same as you will do
:07:42. > :07:45.it? That is what we will do. We stick to that commitment. And the
:07:45. > :07:48.reason we stick to that commitment is when we see countries where the
:07:48. > :07:52.markets don't have faith in the policies that they are going to
:07:52. > :07:56.pursue. We see their long-term interest rates increase, and we see
:07:56. > :07:59.some of the crises at the moment. The UK Government remains committed
:07:59. > :08:05.to getting rid of the structural deficit over the course of this
:08:05. > :08:08.parliament. You still expect to do it by 2014/15? If you look at what
:08:08. > :08:16.the Bank of England said today, when they said that yes, growth
:08:16. > :08:20.will be slow in 2012, but then they said above trend growth over
:08:20. > :08:24.2013/14, that will be possible. Institute for Fiscal Studies, which
:08:24. > :08:27.we saw in that report, which thinks you can't do it, they are wrong,
:08:27. > :08:31.are they? What Paul Johnson said from the IFS is we would still be
:08:31. > :08:35.able to do it if we saw strong growth towards the end of the
:08:35. > :08:41.parliament. That is an if? That is what the Bank of England said today.
:08:41. > :08:44.That is what you expect to do in 2014/15? We will ensure we get rid
:08:44. > :08:46.of the structural deficit by the end of this parliament, it is by
:08:46. > :08:51.having that commitment and credibility that we are not in the
:08:51. > :08:54.mess that other countries are. it is working? That's not what the
:08:54. > :08:57.consensus forecast says. It is what he's saying, he as saying by the
:08:57. > :09:03.end of the parliament it will be gone? Very few people seem to think
:09:03. > :09:07.that they will achieve this. Maybe they are all wrong? The
:09:07. > :09:11.consensus forecast, all of these people say they will be borrowing
:09:11. > :09:15.possibly up to �100 billion more than planned. The best way to
:09:15. > :09:19.reduce your borrowing is to get growth back and getting people into
:09:19. > :09:23.work. We have seen some incredibly tragic figures today. Over one
:09:23. > :09:28.million young people unemployed. That doesn't just affect in terms
:09:28. > :09:31.of your spending power, your monetary capacity, it affects your
:09:31. > :09:35.whole sense ofself. The reason we are in that position, is frankly,
:09:35. > :09:40.the economy hasn't grown, since this time last year. What had
:09:40. > :09:43.happened since this time last year, is confidence nose dived. When that
:09:43. > :09:47.nose dives, demand fall, that is why we are in the position we are
:09:47. > :09:51.in. The question is, how bad does it have to get before David and his
:09:51. > :09:56.colleagues decide to change course. How bad does it have to get? I have
:09:56. > :09:59.to say that he's talking about how we get borrowing down. I'm talking
:10:00. > :10:02.about growth. We don't get borrowing down by borrowing more.
:10:02. > :10:07.The fact is there are many countries across Europe. You will
:10:07. > :10:09.be borrowing more than expected. Many countries across Europe taking
:10:09. > :10:13.austerity measure, tougher than the measures we have had to take,
:10:13. > :10:17.because they have no choice, because that is what the markets
:10:17. > :10:22.require to have credibility. That is why we need to. So growth is low,
:10:22. > :10:24.growth forecasts are lower, and you are the person that says the facts
:10:25. > :10:28.may have changed but I'm not changing my mind? The facts have
:10:28. > :10:33.supported what we have done. What we have said all the way through is
:10:33. > :10:36.we need to be ahead of the market. Things have got worse, you were
:10:36. > :10:41.supposed to be promoting growth and growth has got worse? If you look
:10:41. > :10:45.at what is happening in the likes of Italy, France, Greece, Spain
:10:45. > :10:49.will take austerity measures as well. The fact is, the UK is seen
:10:49. > :10:54.as being a safe haven by the markets at the moment. Because of
:10:54. > :10:58.the steps that we have taken, if we try to abandon that, if we say
:10:58. > :11:02.we're not worried about borrowing, we will borrow more and more and
:11:02. > :11:05.more, what will happen. There are more than a million young people
:11:05. > :11:10.out of work at the moment. I have been to Chorley in the North West
:11:10. > :11:12.of the country, which has seen its youth unemployment go up by 243%
:11:12. > :11:15.since January. Are you seriously going to look all of these young
:11:15. > :11:18.people in the face and say we're not doing anything, all of our
:11:18. > :11:23.measures are working, there is nothing to worry about. Of course
:11:23. > :11:26.we are looking to do what we can do-to-get growth. And there will be
:11:26. > :11:30.measures announced in the autumn statement to that effect. Do you
:11:30. > :11:34.really think that it would help those young people if we abandoned
:11:34. > :11:39.getting our deficit down, if we said we're not interested in that,
:11:39. > :11:42.that we can borrow our way out of this mess. Anyone who thinks the
:11:42. > :11:47.recovery from this mess would be easy doesn't understand the scale
:11:47. > :11:50.of the challenge the country faces. The way that you reduce your
:11:50. > :11:55.borrowing is by having a plan that works. Getting jobs and growth back
:11:55. > :11:57.into the economy. You say how to do this? We have a five-point plan to
:11:58. > :12:01.do this, having a national insurance rebate. Can you remind us
:12:01. > :12:06.how much this five-point plan of your's is going to cost? Over the
:12:06. > :12:09.course of the parliament, over the course of the parliament we have a
:12:09. > :12:15.�40 billion gap between ourselves and the Government. Because we
:12:15. > :12:20.would, they would. It costs �40 billion? One year would cost �20
:12:20. > :12:28.billion. If you bear with me, there is a �40 billion gap. Will it cost
:12:28. > :12:32.�20 billion a year? Yes it will. Yes it will, VAT reversing VAT will
:12:32. > :12:36.cost �12 billion a year alone. Under the figures you have
:12:36. > :12:39.published today, you will be borrowing more than under our more
:12:39. > :12:43.reasonable and responsible deficit reduction plan. In every single
:12:43. > :12:47.area. According to the consensus forecast that your department
:12:47. > :12:51.published today. That is clearly nonsense. How is it nonsense. These
:12:51. > :12:56.are your figures. We are going through a difficult time, because
:12:56. > :12:59.of the eurozone crisis. More every single year. This is nonsense.
:12:59. > :13:02.Would you, if you were in Government, you would be wore
:13:02. > :13:08.borrowing more than Alistair Darling claimed to. You claim it is
:13:08. > :13:11.all to do with the eurozone, I quote the former Treasury secretary,
:13:11. > :13:16.who said it is absolute nonsense to blame this on the eurozone crisis.
:13:16. > :13:19.Are you saying it has no effect at all. Are you saying there is no
:13:19. > :13:23.effect on confidence because of the eurozone crisis s that what you are
:13:23. > :13:26.saying. Unemployment is lagging indicator, all of the statistics we
:13:26. > :13:30.have had so far relate to the period before the eurozone crisis
:13:30. > :13:34.had on the economy. Are you saying the eurozone has no effect on
:13:34. > :13:38.confidence in the UK. It doesn't have any effect on your policy!
:13:38. > :13:41.you're not going to do anything about it. You are ripping out the
:13:41. > :13:45.foundations on which we could actually withstand the storm, if
:13:45. > :13:49.and when it comes. The fact is, by having more credibility. By having
:13:49. > :13:53.a clear plan to get the deficit down, the UK is not being sucked
:13:53. > :13:56.into the crisis that we see in Greece and Italy. You have
:13:56. > :14:01.published figures showing the deficit will be higher than you
:14:01. > :14:04.said. You accept that, you will be borrowing more money that Alistair
:14:04. > :14:07.Darling would have been borrowing if he stuck to his plan? I don't
:14:07. > :14:11.accept that. These are your figures? The fact is the economy
:14:11. > :14:18.has been hit by a eurozone crisis f Alistair Darling was a charl, there
:14:18. > :14:24.would still have been a eurozone crisis. We haven't seen growth in
:14:24. > :14:28.the last 12 months. If we followed the plan you advocated, the UK
:14:28. > :14:33.would have been incredibly vulnerable to the type of issues we
:14:33. > :14:38.have seen in Europe. The markets would have had no credibility, we
:14:38. > :14:41.know our credit rating would have been downgraded. That is nonsense.
:14:41. > :14:46.Our market interests have increased. Only one economy has grown slower
:14:46. > :14:50.than this, in the G7, that is Japan who has suffered an earthquake.
:14:50. > :14:54.can pick and choose which time period we will look at. I'm looking
:14:54. > :14:59.at your time in Government. In 2011 we have grown as much as the US.
:14:59. > :15:04.This is nonsense. If you look at projections we are growing faster
:15:04. > :15:07.than the eurozone. This economy has grown by 0.5%. We will leave it
:15:07. > :15:11.there, thank you very much. The British Government has been
:15:11. > :15:20.accused by the Germans of thely nis crime of trying to look after
:15:21. > :15:25.British -- henious crime of looking after British interests. The German
:15:25. > :15:31.Chancellor said we wouldn't get away with t oh to be a fly-on-the-
:15:31. > :15:36.wall when Cameron and Merkel meet on Friday. The issue is a financial
:15:36. > :15:46.tax on all banking interests. Britain, home of the biggest
:15:46. > :15:49.
:15:49. > :15:53.financial centre would bear the brunt.
:15:53. > :15:56.When David Cameron goes to Berlin on Friday, he may not care to think
:15:56. > :16:00.what they are saying about him in the beer halls, they may point out
:16:00. > :16:04.while our Government is worried about the euro crisis it doesn't
:16:04. > :16:07.want to pay like Germany is prepared to pay to sort it out.
:16:07. > :16:15.Instead we are looking after the interests of the bloated financial
:16:15. > :16:20.sector that caused the problem in the first place. If you listen to
:16:20. > :16:22.the German ruling party, right now the whole of Europe is speaking
:16:22. > :16:26.German. They don't mean we are speaking the language. What they
:16:26. > :16:30.mean, is Germany, being the paymaster is making the money, and
:16:30. > :16:34.setting all the policy. That is not a very welcome idea in the corner
:16:35. > :16:38.of the continent where this bar is, not Bavaria, but the City of London.
:16:38. > :16:41.A close ally of the German Chancellor, Angela Merkel, has
:16:41. > :16:45.accused our Government of acting selfishly, not least because it has
:16:45. > :16:49.pledged to block the tax on financial transactions proposed by
:16:49. > :16:52.the European Commission. TRANSLATION: The British are not
:16:52. > :16:58.members of the currency union, but they are members of Europe. And
:16:58. > :17:03.they also have a responsibility for the success of Europe. Our message
:17:03. > :17:07.to the British cannot be to not look for one's own advantages
:17:07. > :17:12.without being ready to make concessions. A tax on financial
:17:12. > :17:15.transactions, sometimes called a Tobin tax, after the economist who
:17:15. > :17:20.first proposed it, could be quite a concession. The so-called Robin
:17:20. > :17:26.Hood tax doesn't look like it would rob that much from the rich. Just
:17:26. > :17:31.0.1% every time a bond or share is sold, even less for other shares
:17:31. > :17:35.and investments, that would raise 57 billion euro as across the EU,
:17:35. > :17:38.and because most of those transactions are based in London,
:17:38. > :17:45.the City would pay �40 billion. It is not just German politicians who
:17:45. > :17:50.want a tax on financial transactions. The Archbishop of
:17:50. > :17:53.Canterbury responded to the Occupy protests, and said he supported it,
:17:53. > :17:57.and he agrees with the Pope and poverty campaigners. This could be
:17:57. > :18:03.the most popular tax in British his treatment polgs show British people
:18:03. > :18:09.are in favour of this tax, 2-1, that includes voters from the
:18:09. > :18:13.Government. This would redistribute money from the casino in the City
:18:13. > :18:17.to redistribute to poorer people. This isn't about slapping tax on us
:18:17. > :18:21.but Britain making the right tax. The City says it would send
:18:21. > :18:25.business abroad and tax revenues with it. It is worried Germany is
:18:25. > :18:29.setting the agenda. London is most exposed, because that is where the
:18:29. > :18:33.trade is done. Somebody is saying, from outside, what we would like,
:18:33. > :18:37.we would like 35 billion euros from you in the UK, please send it to us
:18:37. > :18:41.and we will decide how to spend it. The point is, it is not going to
:18:41. > :18:46.happen, because the Government here has made it absolutely plain they
:18:46. > :18:49.will veto it. We are very wary at the way it is proposed. If all the
:18:49. > :18:52.world major financial centres agreed on this it might be
:18:53. > :18:59.practical proposition, but just doing it on the basis of the
:18:59. > :19:03.European area isn't practical. We have already seen what happens,
:19:03. > :19:07.Sweden tried it unilaterally and they lost money. The sway the
:19:07. > :19:10.Europeans are framing this, it is a tax on Britain to support the
:19:10. > :19:14.European budget. We are not going along with that. German voters
:19:14. > :19:20.don't like coughing up for other people's wasteful spending any more
:19:20. > :19:23.than we do. If the euro stays intact it will be German not
:19:23. > :19:26.British money supporting it. It will be more German influence, less
:19:26. > :19:29.British influence, not just on the eurozone, but the whole of the
:19:29. > :19:34.European Union. That could mean that the City finds that a Robin
:19:34. > :19:37.Hood tax is only the first attack that it has to fight off.
:19:37. > :19:41.European leaders say if Britain blocks the tax, they will still
:19:41. > :19:47.impose it on the eurozone. That could lead to an ironic twist.
:19:47. > :19:51.Business now done in Frankfurt will come to London, enriching the City,
:19:51. > :19:55.at Germany's expense. Joining us from Berlin is Peter Altmeier,
:19:55. > :20:05.Angela Merkel's Chief Whip in the German parliament. Mr Altmeier,
:20:05. > :20:09.have you estimated how much this tax would raise? No, we have no
:20:09. > :20:13.estimation made so far, we are in the beginning of talks in Brussels,
:20:13. > :20:19.together with 27 partners and friends, on what we could do, in
:20:19. > :20:23.order to respond to the growing demand of people for a better and
:20:23. > :20:28.more efficient regulation of financial markets. The financial
:20:28. > :20:32.transaction tax is one possible answer, and it is currently under
:20:32. > :20:40.debate. Do you know how many jobs will be lost as a consequence of
:20:40. > :20:45.the imposition of the tax? I don't believe too many jobs would be lost.
:20:45. > :20:51.According to the European Commission estimates half a million.
:20:51. > :20:57.There are people claiming that a lot of jobs have been lost as a
:20:57. > :21:02.consequence of a misuse of high frequency trades, and therefore, we
:21:02. > :21:07.believe, that this tax could deprivilege high-frequency trade,
:21:07. > :21:12.it could make traditional trade form some more attractiveness. This
:21:12. > :21:17.is why we are arguing in favour of this tax. And we are supported in
:21:17. > :21:19.doing so by the European Commission in Brussels, and by many NGOs
:21:19. > :21:27.worldwide. You accept this tax would affect Britain more severely
:21:27. > :21:31.than any other country in Europe? No, this would certainly depend on
:21:31. > :21:37.the details of such attacks, there is a proposal from the commission
:21:37. > :21:43.that says the tax revenue should go to the EU budget, but I'm pretty
:21:43. > :21:48.much convinced this is something that could be negotiated. I accept
:21:48. > :21:58.the argument that London is an enormous stock market. By the way,
:21:58. > :22:00.
:22:00. > :22:05.the EU commission's proposal does not consider the stock market
:22:05. > :22:08.concerns, it stays every citizen in the EU should pay the tax. Then we
:22:08. > :22:10.could agree that the tax money goes to the national budget of the
:22:10. > :22:14.country's concerned, this is something that is discussed in
:22:14. > :22:18.Germany as well. That is exceptionally generous of you, are
:22:18. > :22:21.you saying the British charl doesn't know what he's --
:22:21. > :22:27.Chancellor doesn't know what he's talking about? There is an on going
:22:27. > :22:31.debate in the UK, as I have learned from this introduction on TV.
:22:31. > :22:35.you are obviously, for give me, you are misinformed, the British
:22:35. > :22:39.Chancellor, and his coalition partners have made it abundantly
:22:39. > :22:42.clear they will not contenace this tax, because of the damaging effect
:22:42. > :22:49.it will have on the British economy. There is no debate within the
:22:49. > :22:52.Government about that at all. is a debate in the UK, if there is
:22:52. > :22:57.a supposition of the Government, then it will be certainly explained
:22:57. > :23:02.in one of the next ECOFIN meetings. That means there is no chance of
:23:02. > :23:07.applying it to the entire European Union, and this would mean that we
:23:08. > :23:11.would consider introducing it within the eurozone. That would be,
:23:11. > :23:16.from a legal point of view, perfectly possible, you have argued
:23:16. > :23:21.it could lead to a loss of money in Frankfurt, that would then go to
:23:21. > :23:26.the UK, we think there are arrangements possible to make sure
:23:26. > :23:30.that the money will remain in the country where the trade is made,
:23:30. > :23:35.and the financial transaction is made, we do not believe so many
:23:35. > :23:39.financial transactions would be moved to other countries. When your
:23:39. > :23:43.colleague says that he's surprised that the British Government should
:23:43. > :23:49.be defending the British interest, and you can't do that, and you
:23:49. > :23:57.won't accept it, the Germans won't accept it, what does he mean?
:23:57. > :24:01.that was obviously not a correct translation. He meant, every
:24:01. > :24:07.country, of course, can defend its own national interest, that is what
:24:08. > :24:12.all the countries are doing all the time. But in most of the cases we
:24:12. > :24:17.are stronger when we act together on an international scale. We are
:24:17. > :24:21.much stronger nationally when we come to common solutions at the
:24:21. > :24:25.European level. This is the experience of more than 60 years of
:24:25. > :24:33.European integration, and therefore, we still hope that we could
:24:33. > :24:36.negotiate a common solution for everybody. If this is not possible,
:24:36. > :24:40.because the United Kingdom would prefer to stay away, then it would
:24:40. > :24:44.be up to the countries of the eurozone to consider whether they
:24:44. > :24:47.could do something together. Good luck to you.
:24:47. > :24:52.Thank you for joining us. The British economy may be in trouble,
:24:52. > :24:56.but at least it is not in the state of some place like the Democratic
:24:56. > :24:58.Republic of Congo, where the average worker earns something like
:24:58. > :25:03.�30-�40 a month. Yet an investigation by this programme and
:25:03. > :25:08.the Guardian has discovered that in American, so-called vulture fund,
:25:08. > :25:12.is planning to extract a small fortune from the Congo. Previous
:25:12. > :25:15.Newsnight reports on vulture funds that buy up debt cheaply and sue
:25:15. > :25:19.developing countries for vast amounts, got the law of this
:25:19. > :25:26.country changed. Is the vultures cannot now use UK courts. As we
:25:26. > :25:36.report, they found a way round the ban by filing lawsuits in Jersey.
:25:36. > :25:39.
:25:39. > :25:49.This report begins in the Democratic Republic of Congo.
:25:49. > :25:51.
:25:51. > :25:58.We're heading out of the capital, Kinshasa. A kol letter ra epidemic
:25:58. > :26:02.is -- cholera epidemic is sweeping the country. I'm driving to where
:26:02. > :26:09.people are being treated. This is a nation recovering from years of
:26:09. > :26:16.civil war. This is a cholera treatment centre, set up in
:26:16. > :26:20.Kinshasa. They have already treated 8,000 cholera patients, including
:26:20. > :26:27.this 11-year-old. TRANSLATION: had cholera, but now he's better.
:26:27. > :26:32.It is simple, what's needed here is clean water. The question is, why
:26:32. > :26:38.don't they have it? Here is what's happened, a financial speculator,
:26:38. > :26:42.known as a vulture, has blocked Congo from receiving $100 million
:26:42. > :26:49.owed to the African nation. He says that money is owed to him. In this
:26:49. > :26:53.village, the British Government and UNICEF dug a well, at a cost of
:26:53. > :27:00.less $2,000, they were able to provide clean warlter, cholera-free
:27:00. > :27:05.water for 4 -- water, cholera free water for 400 people. That still
:27:06. > :27:12.leaves millions of Congalese without clean water. The vulture
:27:12. > :27:17.paid $3 million for the debt, he wants $100 million in return for it.
:27:18. > :27:27.I asked the UNICEF what $100 million could do here? 200,000
:27:27. > :27:32.children have their lives saved. Colour dollar 100 mill -- $100
:27:32. > :27:37.million dollars, 200,000 lives sent. How did a New York vulture end up
:27:37. > :27:40.claiming $100 million on a $3 million debt from one of the
:27:40. > :27:43.world's poorest countries. The story began 30 years ago when
:27:43. > :27:51.Yugoslavia built power lines for the Congo. They hadn't finished
:27:51. > :27:55.paying for the lines, and Congo and Yugoslavia slipped into civil war.
:27:55. > :28:01.100,000 died, as Yugoslavia split into seven separate countries, and
:28:01. > :28:05.millions died in Congo. Some how, in all this mayhem, vulture
:28:05. > :28:11.speculators obtained the right to collect that power line debt owed
:28:11. > :28:17.by the Congo. The vulture paid $3 million, but wanted back more than
:28:17. > :28:21.30-times that amount. I have come here, to Sarajevo, the centre of
:28:21. > :28:23.another bloody conflict to find out how the vultures got their hand on
:28:23. > :28:28.the debt. I have obtained information that the two key
:28:28. > :28:36.players are these men, first, an American, Michael Sheehan, and
:28:36. > :28:40.second, Bosnia's own former Prime Minister, Nedzad Brankovic. The
:28:40. > :28:43.pylons for Congo were made here, at the state-owned company called
:28:43. > :28:47.Energo Invest. The company once was the powerhouse of the Bosnian
:28:47. > :28:51.economy. Now police are investigating how its assets were
:28:51. > :28:56.striped, leaving the company in ruins, and thousands unemployed.
:28:56. > :29:00.Ten years ago, the state-owned company was being run by Mr
:29:00. > :29:06.Brankovic. He became Prime Minister, but had to quit after he was
:29:06. > :29:09.indicted for corruption. Drew Sullivan and his team at the Centre
:29:09. > :29:14.for Investigative Reporting in Sarajevo, are the one that is took
:29:14. > :29:19.down the Prime Minister. It has cost him his job as Prime Minister.
:29:19. > :29:22.How? The Government bought this apartment for $240,000, and said he
:29:22. > :29:30.didn't need it and he bought it off the Government for a low price.
:29:30. > :29:35.much did he pay? $800. $800, so wait, the Government paid $240,000,
:29:35. > :29:39.a week later he picks it up for $800. Is that considered corruption
:29:39. > :29:45.here? Well they indicted him for it. Brankovic was indicted, but the
:29:45. > :29:49.case had to be dropped last year after all the paperwork
:29:49. > :29:53.mysteriously disappeared. But at the same time as Mr Brankovic was
:29:53. > :29:58.buying state property on the cheap, he was also talking about the old
:29:58. > :30:03.Congo debt with a culture. This is the man, Michael Sheehan, familiar?
:30:03. > :30:13.He's the first vulture we exposed back in 2007, the man who called
:30:13. > :30:18.
:30:18. > :30:21.himself after a James Bond villain, Goldfinger. # Goldfinger
:30:21. > :30:27.Newsnight exposed how Goldfinger squeezed millions out of Zambia, it
:30:27. > :30:32.turns out he also targeted Congo. In 2001, he signed a deal with the
:30:32. > :30:37.Bosnian Brankovic's people, to see if he could get a cut. A
:30:37. > :30:42.transaction was more than suspect. Time to see the cops, this is the
:30:43. > :30:48.office of the chief of a the financial police. We obtained a
:30:48. > :30:53.police report, never before made public. It says Brankovic secretly
:30:53. > :30:58.arranged to sell Goldfinger's friends the debt, for just $3
:30:58. > :31:04.million, and this was a crime. Was it illegal for Brankovic to sell
:31:04. > :31:09.the debt off to the vultures? TRANSLATION: Of course it is
:31:09. > :31:14.illegal. That's why we filed a criminal complaint. This crime is
:31:14. > :31:23.abuse of power. We have identified the criminal intent, the elements
:31:23. > :31:29.of the crime, and who did it. why would Brankovic do this, what's
:31:29. > :31:38.his motive? TRANSLATION: We ask ourselves that too. Every crime has
:31:38. > :31:45.a motive, did you find any evidence of a motive? TRANSLATION:
:31:45. > :31:50.something is worth 100,000 euro, and you sell it for 15,000, you
:31:50. > :31:54.tell me what's happening there. Brankovic is convicted, can he go
:31:54. > :32:02.to jail for this crime? TRANSLATION: He must, he should go
:32:02. > :32:07.to jail. Vultures swooped on Congo in its
:32:07. > :32:14.darkest hour, as it descended into civil war. One week after
:32:14. > :32:17.Goldfinger got his hands on the debt, the President was
:32:17. > :32:21.assassinated Six other nations invaded Congo, and millions were
:32:21. > :32:25.dead. So there was no real Government of Congo and no-one to
:32:25. > :32:32.argue Congo's case when the vultures sued. So they were easy
:32:32. > :32:38.prey for the vultures, vultures like to hunt in packs and work
:32:38. > :32:48.together. Goldfinger slipped the Congo debt to his friend, in return
:32:48. > :32:49.
:32:49. > :32:57.for a commission of $500,000. Then, the story switches from Congo to
:32:57. > :33:01.the real heart of darkness, New York City. Home of FG Hemisphere.
:33:01. > :33:06.FG attempted to grab the diplomatic buildings of the Congo, but a judge
:33:06. > :33:10.said, no. As American courts started to resist the vulture's
:33:10. > :33:15.demand, they began to go after any company, anywhere in the world,
:33:16. > :33:19.that traded with Congo. China refused to let them sue China
:33:19. > :33:25.Railways, Britain brought in a new law after we exposed the vultures.
:33:25. > :33:28.But they found a loophole, in a surprising place. They realised the
:33:28. > :33:33.law doesn't apply in places such as Jersey and Guernsey, places often
:33:33. > :33:38.seen as tax havens, and where lots of money is held. They realised
:33:38. > :33:43.there was money there held by Congo, they have sued for the $100 million
:33:43. > :33:47.in Jersey. They have won that case. Congo has appealed to the Privy
:33:47. > :33:54.Council in London. Little hope there, the law is the law.
:33:54. > :33:57.Loopholes and all. But there is one hope for Congo, before the vul s --
:33:58. > :34:01.vultures can swoop in and grab the cash. The Jersey Government has
:34:01. > :34:04.brought in a consultation considering the law. I'm heading
:34:04. > :34:07.out there next week to talk with the Government and meet with
:34:07. > :34:12.concerned citizens pushing for the law to be adopted. If it is passed
:34:12. > :34:17.in time, before the final appeal, then the $100 million for the Congo
:34:17. > :34:22.could still be saved. If Jersey doesn't act, instead of the $100
:34:22. > :34:30.million going to the Congo, the poor nation's money will end up
:34:31. > :34:38.here, and 300 Calab Avenue in Brooklyn New York, the address of
:34:38. > :34:42.the vultures' fund, FG hams fear. It seems to be a garage. FG's owner
:34:42. > :34:48.is Peter Grossman. Hello, do you think it is fair your vulture fund
:34:48. > :34:52.has sought $100 million from the Congo. I do. For a debt you paid
:34:52. > :34:58.only $3 million for. That is not true. We had seen the Bosnian
:34:58. > :35:02.police documents that said Mr Grossman's company had paid $3.3
:35:02. > :35:05.million for the debt and it was illegally sold to them. Do you know
:35:05. > :35:10.the transfer of the debt to you was called a crime by the police, are
:35:10. > :35:16.you familiar with that? No I'm not. I'm not familiar with it, I'm not
:35:16. > :35:21.beating up the Congo, I'm collected on a legitimate claim. The $100
:35:21. > :35:24.million is better for you, rather than UNICEF who thinks the money
:35:24. > :35:30.could save 200,000 lives. This guerrilla journalism doesn't work
:35:30. > :35:35.for me. Back in the Congo, school kids are
:35:35. > :35:41.waiting for their school to get clean water. Maybe even desks or
:35:41. > :35:47.chairs. What's your favourite subject? Mathematics, and French.
:35:47. > :35:57.This is Congo's hope, this is Congo's future, unless, of course,
:35:57. > :35:57.
:35:57. > :36:01.the vultures snatch it away. The former speaker of the US house of
:36:01. > :36:03.representatives, Newt Gingrich, has admitted to taking money from the
:36:03. > :36:07.mortgage company, Freddie Mac, owned by the US Government. He said
:36:07. > :36:11.it was for strategic advice. He demonstrated why the Republican
:36:11. > :36:14.party needs a Washington battery hen like him, as its candidate for
:36:14. > :36:19.the presidency. Increasing numbers of Americans seem to agree that he
:36:19. > :36:24.might be the man for the job. Mind you, after the comedy performances
:36:24. > :36:31.of some of the other hopefuls, you can almost see their point. This is
:36:31. > :36:35.a vintage season for pratfalls. Live from the Reagan Library.
:36:35. > :36:42.man who wants to be President is either an egomaniac, or crazy, said
:36:42. > :36:46.the great Republican, and President, Eisenhower. He's still right, six
:36:46. > :36:50.deck taids later. Ladies and gentlemen the Republican candidate
:36:50. > :36:55.for President of the United States. Rick Perry is floping, Mcihelle
:36:55. > :37:00.Bachmann is fading, and the less said about the Herman Cain
:37:00. > :37:05.phenomenon, the better. What is it about the grand old party. I don't
:37:05. > :37:14.even know who this woman is. First off, Herman Cain, previously best
:37:14. > :37:22.known as the boss of Godfather's Pizza. A man of multiple talents.
:37:22. > :37:32.Imagine there's no pizza But geopolitics isn't one of them.
:37:32. > :37:34.
:37:34. > :37:38.OK Libya. Um, I do not agree with the way he handled it for the
:37:38. > :37:44.following reason, um, no, that's a different one. That video comes on
:37:44. > :37:50.top of other displays of his grasp of policy details. We won't go into
:37:50. > :37:54.details of other alleged grasps. Nor his Chief-of-Staff's taste for
:37:54. > :38:02.blowing smoke in his latest campaign video. Together we can do
:38:02. > :38:05.this, we can take this country back. # I am American
:38:05. > :38:10.# One voice # United we stand
:38:10. > :38:18.Then there is Rick Perry. What you find are some values that are
:38:18. > :38:24.branded in my heart. The ho-down- loving, Clint Eastwood figure, in
:38:24. > :38:32.more ways than one, reminiscent of the last Texan export. There is an
:38:32. > :38:37.old poster out west that says "wanted dead or alive". The general.
:38:37. > :38:42.And the Prime Minister of India? The new Prime Minister of India is
:38:42. > :38:47.uhhh, no. Maybe it's something in the Texas
:38:47. > :38:57.water, here's Perry on big Government. I would do away with
:38:57. > :39:00.the education, commerce, and let's see, I can't, the third one I can't,
:39:00. > :39:09.sorry. Oops.
:39:09. > :39:14.Putting your foot in it is an equal opportunities opportunity. Mother,
:39:14. > :39:19.moose hunter, maverick. Sarah Palin's CV didn't include
:39:19. > :39:23.geopolitics either. You can actually see Russia from land here
:39:23. > :39:30.in Alaska. She turned out, not exactly, a policy wonk. I will try
:39:30. > :39:37.to find you some and I will bring them to you. Winsomeness winds over
:39:37. > :39:42.wonky every time, but it costs. Mcihelle Bachmann, once the Sarah
:39:42. > :39:46.Palin of the day, has reportedly gone through six chiefs of staff,
:39:46. > :39:51.five press secretaries, five legislative directors and three
:39:51. > :39:57.communications directors since winning a seat in Congress in 2006.
:39:57. > :40:01.It is from the smoldering ashes of these whispers and brain freezes
:40:01. > :40:05.that Newt Gingrich has reemerged. Years inside Washington mean he can,
:40:05. > :40:08.at least, claim to know which way is up. There are still others in
:40:08. > :40:18.the race for the Republican nomination, but it is November, and
:40:18. > :40:20.
:40:20. > :40:27.the Prime Minister rees are now only weeks away. Glrb the primaries
:40:27. > :40:35.are only weeks away. We have our guests with us now.
:40:35. > :40:39.Why does do these gaffs happen? think there is an amount of
:40:39. > :40:42.preparedness that hasn't been taken. Those things happen. Sometimes we
:40:42. > :40:52.underestimate, as political people, we underestimate just what will
:40:52. > :40:55.happen if we do have a gaffe. You repeat them over and over again, it
:40:55. > :41:00.was a slice of the candidates, you repeat them over and over again,
:41:00. > :41:06.they really never die. That is one of the things, we underestimate the
:41:06. > :41:10.power of that gaffe as the media plays it over and over again. We
:41:10. > :41:13.underestimate the responsibility that we have to be prepared for
:41:13. > :41:19.these debates. When you're unprepared for the debate, those
:41:19. > :41:25.kinds of things happen, but also, I think, that there is an
:41:25. > :41:29.understaipgs of the power of just being out there, that overexposure
:41:29. > :41:39.to the media. These candidates want to go to the grass roots. Do they
:41:39. > :41:41.
:41:41. > :41:45.matter? Yes, calling it unpreparedness is selling it short.
:41:45. > :41:50.The reason Perry couldn't remember the third thing he wanted to
:41:50. > :41:53.eliminate in the Government is because he doesn't care, he
:41:53. > :41:57.memorised things. These things should be so deep in your soul when
:41:57. > :41:59.running for President you don't forget them. They are throwing out
:41:59. > :42:03.red meat to a certain kind of supporter. They are not thinking
:42:03. > :42:06.about what people care about. People care about corporate
:42:06. > :42:09.ownership of our elections, not about destroying the Department of
:42:09. > :42:14.Education. Does anyone think there is too much education going around,
:42:14. > :42:19.is that really the problem. Do you think there is also an element,
:42:19. > :42:25.perhaps, of some more statesman like Republicans staying out of the
:42:25. > :42:31.race this time? I don't think so, what we have seen is a field of
:42:31. > :42:34.really people who are able to carry this banner and to go up against
:42:34. > :42:39.President Obama. I think that we have some good talent, I just think
:42:39. > :42:44.that we have got an overexposure problem here with too many people
:42:44. > :42:52.being critical, rather than actually saying to these people
:42:52. > :42:56.thank you for stepping up and being patriots. Is over exposure when
:42:56. > :43:00.people find out you are wrong, is that what it means? No over
:43:00. > :43:03.exposure means that when you have too many debates, especially a good
:43:03. > :43:08.debate is not necessarily good television. What we have here in
:43:08. > :43:12.America is good television, rather than good debating. We really need
:43:12. > :43:16.to let these folks talk about the things, the issues that really
:43:16. > :43:19.matter, our homes, our jobs, the price of gasoline that goes in our
:43:19. > :43:25.car every day. Those are the things that the American people really
:43:25. > :43:29.want to hear about and what is happening is 30-second soundbites
:43:29. > :43:33.in the debates. I agree with you, every time these people speak is
:43:33. > :43:37.when these things come out. When Mcihelle Bachmann said the founding
:43:37. > :43:41.fathers worked tirelessly to end slavery, eventhough the founding
:43:41. > :43:47.fathers had slaves. She expects us to believe that Washington looked
:43:47. > :43:51.out his front window every day and went "why won't you leave!" it is
:43:51. > :43:55.preposterous they expect us to believe this stuff. Part of it is
:43:55. > :44:00.the appearing to be human. I wonder in this job if you want someone who
:44:00. > :44:04.can simulate being a normal human being, or someone who is a normal
:44:04. > :44:09.human being, it is an unnatural thing to want? It is not natural at
:44:09. > :44:17.all. I think what we have here is the first fully railised reality
:44:17. > :44:20.show campaign for the presidency. These are a stage full of bubble-
:44:20. > :44:25.headed Gibraltar-twits, it is aamazing. Even the stuff that
:44:25. > :44:31.aren't gaffes, not believing in he have illusion, it is amazing. And -
:44:31. > :44:36.- he have illusion, it is amazing. If I was up there with many cross-
:44:36. > :44:39.eyed hot dog salesmen I wouldn't believe in he have illusion either.
:44:39. > :44:49.It is very easy for someone to stand on the outside of this
:44:49. > :44:52.
:44:52. > :44:56.process and make fun and mock and make a joke out of it. It is hard
:44:56. > :44:59.to be real when only given 30 seconds. One of the candidates only
:44:59. > :45:04.got 86 seconds of air time in the last debate. It is difficult to
:45:04. > :45:09.when you are trying to get a point across in that short time.
:45:09. > :45:13.Quit gander at some of tomorrow morning's front pages. The Guardian
:45:13. > :45:23.goes with the awful economic prospects after the Bank of England
:45:23. > :45:36.
:45:36. > :45:43.That's it for now, a select few citizens tomorrow will be able to
:45:43. > :45:53.spend the evening in the company of Emily Maitless, before she puts on
:45:53. > :46:15.
:46:15. > :46:19.Most of us will see sunshine eventually tomorrow. First thing,
:46:19. > :46:22.it could start off pretty grey. The rain easing from North West
:46:22. > :46:25.Scotland. We will see sunny spells developing across most of England
:46:25. > :46:29.and Wales. Rain may return to Northern Ireland later on. Sunny
:46:29. > :46:33.spells for the afternoon across most of northern England and the
:46:33. > :46:37.Midlands, temperatures up to 13 in Birmingham. Parts of East Anglia
:46:37. > :46:41.and the south-east will stay glum. Late sunshine in London, we may
:46:41. > :46:46.reach 14 Celsius. Sunny skies for most of the day across the far
:46:46. > :46:53.South-West of England. In Cornwall the breeze Ince crease and cloud
:46:53. > :46:56.spilling in. Elsewhere across Wales dry and bright, sunny spells
:46:56. > :47:00.throughout. Some sunny spells across Northern Ireland early on,
:47:00. > :47:03.grey here with wet and windy weather spilling in for the
:47:03. > :47:06.afternoon. Some rain trickling back into South-West Scotland. Northern
:47:06. > :47:10.Scotland starting damp. Here it should brighten up by the afternoon.
:47:10. > :47:14.More rain to come on Friday, across parts of western Scotland and
:47:14. > :47:18.Northern Ireland. Even so, with the wet and windy weather it will be
:47:18. > :47:22.mild, temperatures above average. Much of England and Wales will be
:47:22. > :47:28.dry and brighter were we get the sunshine. Temperatures on Friday,
:47:29. > :47:32.may well reach 15 degrees. A brisk breeze growing, cloudy skies and