Browse content similar to 09/12/2011. Check below for episodes and series from the same categories and more!
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Did he jump, or was he pushed? Afraid I cannot do that. It's not | :00:13. | :00:18. | |
in our national interests. I don't want to put that in front of my | :00:18. | :00:22. | |
Parliament because I don't think I could recommend it with a clear | :00:22. | :00:26. | |
conscience, so I am going to say now and exercise the veto. That is | :00:27. | :00:30. | |
effectively what I did. David Cameron says he's made the right | :00:30. | :00:33. | |
choice for Britain, but was it a choice made for him by European | :00:33. | :00:40. | |
leaders? Did he walk away with anything? Well, he certainly | :00:40. | :00:43. | |
enhanced his reputation as a defender of the national interests. | :00:43. | :00:48. | |
Alas, for Britain, this summit was meant to be about coming together | :00:48. | :00:52. | |
decisively to act in the common good. We'll be asking the Europe | :00:52. | :00:56. | |
Minister whether his leader has put Britain on a path out of the EU. | :00:56. | :01:02. | |
And there is that small matter of the crisis that started all of this. | :01:02. | :01:06. | |
Paul Mason is here. The new EU budget rules make spending your way | :01:07. | :01:11. | |
out of recession illegal. So where is Europe's growth going to come | :01:11. | :01:14. | |
from? We assess whether this summit has done anything to take the euro | :01:14. | :01:20. | |
out of the danger zone. And what the past 24 hours has done to | :01:20. | :01:25. | |
British politics - thrilled Tory backbenchers, nervous Liberal | :01:25. | :01:35. | |
:01:35. | :01:35. | ||
Democrats - how easily now can they Good evening. Or is it "auf | :01:35. | :01:40. | |
wiedersehn, England". So read the banner headline in one German | :01:40. | :01:44. | |
magazine today. 26 members of the European Union are going to | :01:44. | :01:47. | |
negotiate a new treaty to help make the single currency work. Britain | :01:47. | :01:52. | |
is not. David Cameron said he had to veto a treaty of the 27 because | :01:52. | :01:54. | |
the others wouldn't give special protections to our financial | :01:54. | :01:56. | |
services industry. Eurosceptics are thrilled, and Liberal Democrat | :01:56. | :02:03. | |
Ministers are trying not to look too glum. But you might say it's a | :02:03. | :02:06. | |
strange kind of veto that doesn't prevent the thing that the | :02:06. | :02:09. | |
Government wanted to stop and doesn't win the city any more | :02:09. | :02:12. | |
protection from Brussels than it already has. Our diplomatic editor | :02:12. | :02:21. | |
Mark Urban was there. Mark, what did happen? Well, it was | :02:21. | :02:25. | |
always going to be complicated. If David Cameron had gone along with | :02:25. | :02:29. | |
what the others wanted, then there would have been this process of | :02:30. | :02:33. | |
treaty change, triggering all sorts of legislative and political steps | :02:33. | :02:36. | |
in the member countries, but because he didn't want to go along | :02:36. | :02:40. | |
with it, and that process, by the way, would have taken months - | :02:41. | :02:44. | |
people say until March - to produce the sort of effects that we're | :02:44. | :02:47. | |
looking at, so it was never going to be a quick-fix, but because | :02:47. | :02:53. | |
David Cameron said no and did use his veto - a pretty major moment in | :02:53. | :02:56. | |
European history - they can now blame him for things that go wrong | :02:56. | :03:03. | |
subsequently. They call this "the family photo", but this clan now | :03:03. | :03:07. | |
has a black sheep. After a night in which Britain had found itself | :03:07. | :03:11. | |
alone on the new package of measures to protect the euro, there | :03:11. | :03:16. | |
was an attempt to make up between Britain's has been itial | :03:17. | :03:20. | |
antagonists, but there was no disguising that the decision to | :03:20. | :03:24. | |
veto EU treaty changes left David Cameron a lonely figure this | :03:24. | :03:28. | |
morning and allowed Nicolas Sarkozy to apportion blame. | :03:28. | :03:33. | |
TRANSLATION: As to your question about our British friends, in order | :03:33. | :03:37. | |
to accept reform of the 27-nation treaty, David Cameron proposed | :03:37. | :03:40. | |
something we all thought was unacceptable. Namely, there would | :03:40. | :03:45. | |
be a treaty written into the protocols that would allow the UK | :03:45. | :03:50. | |
to opt out of rules regarding financial services. Having gone on | :03:50. | :03:55. | |
until 5.00am this morning, some other countries were ready to be | :03:55. | :03:59. | |
even blunter in describing Europe's new alignment. Brit, not Europe - | :03:59. | :04:03. | |
Brits divided, and they are outside of decision making. Europe is | :04:03. | :04:12. | |
united. In the press room, those with various political axes ground | :04:12. | :04:15. | |
them energetically this morning, giving their interpretation of what | :04:15. | :04:19. | |
happened and where it left Britain. David Cameron has been wandering | :04:19. | :04:23. | |
around this building virtually alone. We have had Sarkozy spiting | :04:23. | :04:27. | |
with venom. I fear the City of London will have a very heavy price | :04:27. | :04:32. | |
to pay for this in terms of legislation coming down the road. | :04:32. | :04:38. | |
If Cameron goes back to the United Kingdom if he thinks by vetoing | :04:38. | :04:44. | |
this treaty and appeasing them he has another thing coming. Britain | :04:44. | :04:49. | |
sees this as a definitive placing on the margins of the EU. Is that | :04:49. | :04:54. | |
right? Let's remember that monetary union is only one aspect of what | :04:54. | :04:58. | |
the European Union does. The bulk of decision-making in the EU | :04:58. | :05:02. | |
remains a matter for all 27 member states. Of course, the narrative of | :05:02. | :05:06. | |
Britain's isolation in Europe is such a well-worn one that the press | :05:06. | :05:12. | |
can always be relied upon to lap it up. Thuest tried to combat it in | :05:12. | :05:18. | |
recent weeks by suggesting the UK might be at the head of a group of | :05:18. | :05:21. | |
countries outside the EU that shared similar views, but last | :05:22. | :05:25. | |
night really gave light to that, and the question now for the coming | :05:25. | :05:29. | |
months is how Britain is going to exert any influence in the | :05:29. | :05:34. | |
discussions that lie ahead? For months, 17 of the eurozone have | :05:34. | :05:38. | |
been central to this crisis, and the ten other members of the EU, | :05:38. | :05:45. | |
peripheral. Last night, six of those others agreed to back the | :05:45. | :05:48. | |
Franco-German plan. Additionally, Hungary, the Czech Republic and | :05:48. | :05:52. | |
Sweden referred it for parliamentary approval. That left | :05:52. | :05:57. | |
only the UK unambiguously opposed. Mr Cameron now cast doubt over | :05:57. | :06:01. | |
whether Europe's institutions, particularly the Commission, | :06:01. | :06:04. | |
effectively its Civil Service, should be allowed to support the | :06:04. | :06:09. | |
other nations moving ahead when one nation objects. The institutions of | :06:09. | :06:12. | |
the European Union belong to the European Union. They belong to the | :06:12. | :06:16. | |
27. They're there to do the things that are set out in the treaties | :06:16. | :06:21. | |
that we've all signed up to over the years, and that is an important | :06:21. | :06:27. | |
protection for Britain. However, those running the EU beg to differ, | :06:27. | :06:30. | |
arguing they can throw their organisational weight behind those | :06:30. | :06:35. | |
countries that have signed up to the fiscal compact. This formula | :06:35. | :06:40. | |
has some handicaps, but we will try to overcome them, and I think we | :06:40. | :06:46. | |
have - we will need a large interpretation of the role of | :06:46. | :06:51. | |
institutions and others, as we did it in the past. Pushing on without | :06:52. | :06:56. | |
changes to Europe's key treaties does, though, threaten a power | :06:56. | :06:59. | |
struggle. The new fiscal compact strengthens the role of the | :06:59. | :07:02. | |
commission, the unelected officials, but what about the other two | :07:02. | :07:09. | |
pillars of the EU, the council, its 27 member governments collectively | :07:09. | :07:13. | |
and the European Parliament? There were already rumblings in Brussels | :07:13. | :07:17. | |
today. This is possible if it is a copy paste of the existing treaty | :07:17. | :07:23. | |
with the same role for the European Commission as today and with the | :07:23. | :07:26. | |
same democratic control by the European Parliament because I | :07:26. | :07:31. | |
cannot accept that we shall have a whole economic governance inside | :07:31. | :07:33. | |
the eurozone and inside the European Union without the | :07:33. | :07:37. | |
democratic control by the European Parliament. So for those processing | :07:37. | :07:41. | |
what everyone apart from Britain agreed, there are many open | :07:41. | :07:45. | |
questions still. This could take months of negotiation and create | :07:45. | :07:50. | |
its own diplomatic gridlock. That's not fast enough for countries that | :07:50. | :07:54. | |
want the underlying sovereign debt problem solved quickly. We have new | :07:54. | :07:59. | |
governments in Italy and Spain. We have signals from both of them that | :07:59. | :08:06. | |
they're doing more to address their - their economies in deep distress. | :08:06. | :08:11. | |
That's the most important step to take. I think that this governance | :08:11. | :08:15. | |
issues are of importance, but it's much more related to the crisis | :08:15. | :08:19. | |
management. Britain's exit from this negotiating process is a | :08:19. | :08:23. | |
gamble. Quite apart from the UK domestic aspect, it's complicated | :08:23. | :08:27. | |
life for the others. They're unlikely to forget that in the | :08:27. | :08:33. | |
eurozone's hour of need, Mr Cameron put national interests first, and | :08:33. | :08:38. | |
they may not forgive him either. That was Mark Urban in Brussels. | :08:38. | :08:42. | |
Before we came on air, I spoke to David Lidington, the Minister for | :08:42. | :08:46. | |
Europe. Minister, what was David Cameron so frightened of last night | :08:46. | :08:50. | |
that he had to take this step? The position he was faced with was that | :08:50. | :08:56. | |
if he accepted a treaty at the level of 27, that would be an | :08:56. | :09:00. | |
amendment to the treaty governing the whole of the European Union, | :09:00. | :09:04. | |
its institutions, the way it does business, and there was a real risk | :09:04. | :09:10. | |
that without the safeguards that he wanted included in that treaty at | :09:11. | :09:17. | |
27, that you would over time have a read-across from the closer fiscal | :09:17. | :09:21. | |
integration that the eurozone countries want to do towards | :09:21. | :09:23. | |
measures that would influence financial services, in particular, | :09:23. | :09:28. | |
but also the single market as they affect Europe at 27. It's such an | :09:28. | :09:31. | |
odd kind of veto because the thing you wanted to stop is going to | :09:31. | :09:35. | |
happen without those safeguards. Aren't you worried about that? | :09:35. | :09:40. | |
Clearly we have to be vigilant, not just on financial services, but on | :09:40. | :09:43. | |
British interests more widely within the European Union. If you | :09:43. | :09:47. | |
look at exactly what happened over the last 12 months, what you've | :09:47. | :09:51. | |
seen is a number of initiatives coming forward where George Osborne | :09:51. | :09:55. | |
and his Treasury team have negotiated very hard, where they've | :09:55. | :09:58. | |
worked with other European countries who have agreed with our | :09:58. | :10:01. | |
views, and they've got a lot of that legislation in a form we have | :10:01. | :10:04. | |
been able to live with. With this decision David Cameron has taken, | :10:04. | :10:07. | |
do you think it's really more likely that that's going to happen | :10:07. | :10:10. | |
in the future or less likely? think that people are going to | :10:10. | :10:17. | |
continue to work on the basis of common interests. They're going | :10:17. | :10:22. | |
ahead with this. They're irritated with what we've done. Realistically, | :10:22. | :10:26. | |
surely there is more chance they're going to go ahead with things the | :10:26. | :10:30. | |
City doesn't like than a few weeks ago when we still might have had a | :10:30. | :10:34. | |
small amount of good will. I think there is an inherent risk in the | :10:34. | :10:38. | |
euro that you could get the growth of rival blocks, and we have to | :10:38. | :10:43. | |
work to avoid that. I have never pretended that risk was absent, but | :10:43. | :10:49. | |
what I think is a mistake is to see that the eurozone or the eurozone | :10:49. | :10:55. | |
plus or the - are all monolithic, cohesive blocks. What you've got | :10:55. | :10:57. | |
are countries, particularly in the eurozone, that have come together | :10:57. | :11:03. | |
for a particular purpose - yes? And we actually want them to succeed | :11:03. | :11:07. | |
in... Yes, that's... If I can finish the point that who on many | :11:07. | :11:12. | |
issues have a huge overlap of interests with the UK, and you talk | :11:12. | :11:16. | |
to a lot of eurozone countries, and they'll say, "We want to continue | :11:16. | :11:25. | |
working with you precisely to see elsewhere". Do you want this to | :11:25. | :11:29. | |
succeed, this treaty with 26 members? To be honest, I never | :11:29. | :11:33. | |
believed that a treaty was going to be the key to solving the problems | :11:33. | :11:37. | |
of the eurozone. I think that the problems of the eurozone - it's | :11:37. | :11:40. | |
certainly in British interests that the eurozone sorts its problems out, | :11:40. | :11:43. | |
but the key to that is first of all dealing with the immediate crisis | :11:43. | :11:48. | |
through working out the details of the Greek debt, the bank | :11:48. | :11:52. | |
recapitalisation and the strengthening of the, f,... If this | :11:52. | :11:57. | |
is an irrelevance, we don't want to help them by allowing them to use | :11:57. | :12:02. | |
European Union resources... It's not an irrelevance when you have a | :12:02. | :12:07. | |
change to the Treaty of Lisbon, which because that treaty governs | :12:07. | :12:11. | |
all the European institutions and the way in which the European Union | :12:11. | :12:18. | |
our vital economic interests. are Europe Minister. You must have | :12:18. | :12:22. | |
some sympathy with your counterparts in Europe who would | :12:22. | :12:27. | |
say, "They're saying they have made a principled decision. This just | :12:27. | :12:32. | |
seems petty." It's not winning any friends at all this move, is it? | :12:32. | :12:36. | |
think what we have to make clear is yes, we'll stand up for British | :12:36. | :12:39. | |
national interests when it comes to a decision, but that we also | :12:39. | :12:43. | |
continue to want the eurozone to work successfully to restore | :12:43. | :12:46. | |
economic stability, and if you listen to - I am sure you did - to | :12:46. | :12:50. | |
what Chancellor Angela Merkel said in her press conference after the | :12:50. | :12:53. | |
summit was concluded, she said that she would be continuing to work | :12:54. | :12:57. | |
with David Cameron and the United Kingdom. And what do you think of | :12:57. | :13:03. | |
Paddy Ashdown saying that this is 40 years of UK diplomacy down the | :13:03. | :13:10. | |
drain? No. I think that is an exaggeration and if I look at what | :13:10. | :13:14. | |
Nick Clegg said and Menzies Campbell said today, you'll see I | :13:14. | :13:16. | |
think that the Liberal Democratic leadership accepts the Prime | :13:16. | :13:20. | |
Minister, given the choice faced him last night had no option but to | :13:20. | :13:24. | |
take the decision he did. Isn't this the start of a road that leads | :13:24. | :13:28. | |
quickly to us leaving the EU? because there are important British | :13:28. | :13:32. | |
interests which I think mean that we are right to remain as members | :13:32. | :13:37. | |
of the European Union. But it's 26 and one - 26 countries who have | :13:37. | :13:40. | |
carried on and got their treaty and everything else and one country | :13:40. | :13:44. | |
outside. You really think that's sustainable? No, because you're | :13:44. | :13:47. | |
looking at a structure under which decisions about did regulation of | :13:47. | :13:51. | |
economic affairs will be taken at the level of 27, in which | :13:51. | :13:54. | |
discussions about foreign and security policy will be continue to | :13:55. | :13:59. | |
be taken at the level of 27, where the United Kingdom is one of the | :13:59. | :14:01. | |
leading European countries. David Lidington, thank you very much. | :14:01. | :14:05. | |
Thank you. We'll have more on the politics of | :14:05. | :14:08. | |
all this in a minute. But now, big bazookas - that's what Paul Mason | :14:08. | :14:11. | |
and I thought we'd be talking about today. David Cameron said the | :14:11. | :14:15. | |
Eurozone needed to come up with one, an overwhelming show of force to | :14:15. | :14:18. | |
set fear into the heart of any hedge fund manager planning to make | :14:18. | :14:22. | |
money from the Euro's demise. But it doesn't seem to have turned out | :14:22. | :14:25. | |
that way. Germany seems to have persuaded the others to make the | :14:25. | :14:28. | |
Eurozone a lot more - well, German. But there's little sign that | :14:28. | :14:30. | |
Chancellor Merkel or the European Central Bank offering to use their | :14:30. | :14:40. | |
:14:40. | :14:42. | ||
big bazookas in return. Paul is Most people in the markets think | :14:42. | :14:49. | |
not, and it will be the market to decide this. Yesterday, with the | :14:49. | :14:52. | |
European Central Bank pumped money into the banking system, making | :14:52. | :14:57. | |
borrowing very easy to do for banks, will work and will stop the banks | :14:57. | :14:59. | |
collapsing in this ever-increasing credit crunch we are seeing in | :14:59. | :15:03. | |
Europe. When it comes to the actual sovereigns, the countries that | :15:03. | :15:10. | |
could go bust, the problem remains. This is a graphic produced by | :15:10. | :15:14. | |
Capital Economics, a London consultancy. Spain and Italy need | :15:14. | :15:18. | |
to borrow about one or trillion over the next few years. They | :15:18. | :15:21. | |
cannot borrow at the moment because people don't want to lend it to | :15:21. | :15:26. | |
them because they fear they might lose it. So it has to come from | :15:26. | :15:31. | |
what we thought would be a bazooka Mark 2. This is what it could look | :15:31. | :15:38. | |
like. The EFSF, the taxpayers' money against which they will | :15:39. | :15:46. | |
borrow some more. That take Shittu around half a trillion. Another | :15:46. | :15:53. | |
half an from B E S M, but they could run in parallel. -- From D. | :15:53. | :15:58. | |
And this is the IMF. That will get some money from Europe and blended | :15:58. | :16:04. | |
back. There is there bazooka. His is big enough. -- that is big | :16:04. | :16:08. | |
enough. A bit at the bottom his country's | :16:08. | :16:12. | |
borrowing. If that should collapse, and Standard & Poor's comes | :16:12. | :16:16. | |
overnight and says she cannot borrow any more at the rates you | :16:16. | :16:24. | |
did, that things collapse. -- then things collapse. People will be | :16:24. | :16:29. | |
downgraded and it will be by to the bazooka. | :16:29. | :16:33. | |
-- goodbye. All of that could be one big | :16:33. | :16:35. | |
question mark, we don't know if any of that could happen. | :16:35. | :16:39. | |
At least we know what that could look like. | :16:39. | :16:43. | |
It is odd, because you say the market has said this is not enough, | :16:43. | :16:48. | |
but they are not happy with it, nor have they tend to today. | :16:48. | :16:56. | |
No. -- nor have they tanked. The small print, it is not that | :16:56. | :17:01. | |
small, they keep it up detailed up- to-date is that in future, eurozone | :17:01. | :17:06. | |
government are not allowed to have a structural deficit over 0.5% of | :17:06. | :17:13. | |
their GDP. A Briton's is currently 4.5 and after bore years of George | :17:13. | :17:20. | |
Osborne's austerity, we will get it down to 2.5 -- after four years. If | :17:20. | :17:24. | |
you are going to impose austerity, where does growth come from? One | :17:24. | :17:30. | |
bond participant was very straight with me on this. I think we need a | :17:30. | :17:34. | |
fiscal union to accommodate a monetary union. But what we have | :17:35. | :17:38. | |
got it looks much more like an austerity Union. We have got limits | :17:38. | :17:44. | |
on deficits, we have got a big push to reduce spending and this reduced | :17:44. | :17:47. | |
government spending looks set to come at the same time as banks | :17:47. | :17:50. | |
tighten up and they reduce private sector spending and that | :17:51. | :17:54. | |
constitutes a double whammy to growth. Thank you very much, Paul. | :17:54. | :17:59. | |
We are going to cast an eye a bit more over the summit and work out | :17:59. | :18:05. | |
whether the euro and the world economy has been saved denied. -- | :18:05. | :18:13. | |
saved the tonight. We have that Gertrude Tumpel-Gugerell, a member | :18:13. | :18:18. | |
of the ECB Central Board over the last eight years and they are | :18:18. | :18:25. | |
joined by Mohamed El-Erian. We should start with you, you are the | :18:25. | :18:31. | |
ones with your one trillion dollars and your fund, you could make a or | :18:31. | :18:37. | |
break this, are you piling in or getting out even faster? I don't | :18:37. | :18:42. | |
think we can make it or break it, but our assessment is they took | :18:42. | :18:46. | |
some important steps, but they are not sufficient, so this is neither | :18:46. | :18:50. | |
a quick fix nor is it a comprehensive fix. So we remain on | :18:50. | :18:56. | |
the sideline in terms of engaging in the bond markets of the most | :18:56. | :19:00. | |
vulnerable European economies. is quite a bad result, because we | :19:00. | :19:04. | |
were being told all of these things about 10 days to save the euro, | :19:04. | :19:08. | |
five days to save the euro. This was supposed to bring a step change | :19:08. | :19:14. | |
in the thinking of people like you. Think of it in the following way: | :19:14. | :19:20. | |
everybody recognises that the eurozone building is very fragile. | :19:20. | :19:23. | |
So the eurozone is now building another building and all they have | :19:23. | :19:27. | |
done is laid the foundations. They haven't yet put the different | :19:27. | :19:30. | |
floors on, so people are not going to move from the old building to | :19:30. | :19:35. | |
the new building, they are going to move from the old building out. | :19:35. | :19:38. | |
That is why Europe has to accelerate what it is putting in | :19:38. | :19:42. | |
place. It is not enough to put in a foundation and say we are there to | :19:43. | :19:46. | |
come back in March and build another few flaws. Gertrude Tumpel- | :19:46. | :19:51. | |
Gugerell, you are sitting in the institution, or you used to, that | :19:51. | :19:56. | |
was supposed to be one of the flaws of that institution. We talk about | :19:56. | :20:01. | |
the ECB being the crucial part of the end solution to the euro. Do | :20:01. | :20:10. | |
you think that is going to change? Is the EC began to come in now? -- | :20:10. | :20:15. | |
ECB. The European Central Bank has been in different kind of measures | :20:15. | :20:20. | |
to bring Europe out of the crisis, we shouldn't underestimate this. If | :20:20. | :20:24. | |
you look at the results of the summit, there are three major | :20:24. | :20:27. | |
achievements. The first one is a long term it could lead -- | :20:27. | :20:34. | |
commitment to sound fiscal Prom -- a long-term commitment to sound the | :20:35. | :20:44. | |
fiscal policies. Blows to help countries Bridge difficult periods. | :20:44. | :20:49. | |
-- loans. And also to support the credibility of these different | :20:49. | :20:58. | |
measures taking... The people, partly because of something that | :20:58. | :21:01. | |
the European Central Bank president said last week, have thought that | :21:01. | :21:04. | |
if there was this kind of commitment to these tough fiscal | :21:04. | :21:08. | |
rules, there would be some sort of reward from the European Central | :21:08. | :21:18. | |
Bank. Are you suggesting that is wrong? The solution can come only | :21:18. | :21:23. | |
from building new confidence in the country's policies, so the solution | :21:23. | :21:28. | |
can come only from the Government themselves. What the European | :21:28. | :21:31. | |
Central Bank has done and has done in the past and can do in the | :21:31. | :21:36. | |
future is first of all provide liquidity. This is the major task | :21:36. | :21:41. | |
of a central bank in such an end -- a situation. The ECB took a step | :21:41. | :21:46. | |
yesterday by deciding to provide three years liquidity and the | :21:46. | :21:50. | |
European Central Bank still has its of government bond purchase | :21:50. | :21:57. | |
programme available. The solution cannot come from the central bank | :21:57. | :22:07. | |
:22:07. | :22:13. | ||
alone. That is something we have had a few times. Cherie Givet Dana, | :22:13. | :22:19. | |
-- Shriti Vadera, does the ECB need to do more? I don't think there is | :22:19. | :22:23. | |
enough there at the moment. What we wanted, and we should stop | :22:23. | :22:27. | |
expecting something in one day, but what we wanted was clarity on an | :22:27. | :22:31. | |
end to destination and a breach of liquidity for sovereign bonds to | :22:31. | :22:35. | |
that the destination. -- Bridge. We half got boat and we haven't got | :22:35. | :22:40. | |
all of it and it is over the next few months that will tell -- we | :22:40. | :22:45. | |
half got both. We will probably have a downgrade as Paul Mason has | :22:45. | :22:50. | |
said over the next few weeks, and that liquidity will be tested. Is | :22:50. | :22:54. | |
the ECB going to step in? And there does need to be a reward, there | :22:54. | :23:00. | |
needs to be a compact on both sides. They could bind the secondary | :23:00. | :23:04. | |
market, but at the moment, they are the only institution in the | :23:04. | :23:09. | |
structure that is able to act. The rest of the money isn't ready. | :23:09. | :23:18. | |
you say to ball boys -- Paul Mason's. That -- point, when all | :23:18. | :23:21. | |
other countries announced a stimulus package in 2009, that | :23:21. | :23:28. | |
wouldn't be possible now? You think that is right? I think it is true | :23:28. | :23:32. | |
that they have produced a toolkit with only one tool, austerity. It | :23:32. | :23:38. | |
is about cuts and deficit caps. Actually, the real problems with | :23:38. | :23:42. | |
the countries in real trouble right now it is the current account, they | :23:42. | :23:46. | |
are not competitive enough. There is nothing that shows these | :23:46. | :23:49. | |
countries will be able to trade their way. They cannot inflate, | :23:49. | :23:53. | |
they cannot depreciate, they cannot borrow cheaply, they don't get | :23:53. | :23:59. | |
money from the ECB. Something has got to give and it could end up | :23:59. | :24:02. | |
with solvency problems and really consigning Europe to 10 years of | :24:02. | :24:06. | |
absolutely no growth. If there is a solvency problem and nobody gives | :24:06. | :24:11. | |
them any funding it, we will be looking at restructure. Mohamed El- | :24:11. | :24:15. | |
Erian, as an Economist, you must worry about where growth is there | :24:15. | :24:21. | |
to come from. It is all fiscal, it is all about tightening budgets. | :24:21. | :24:25. | |
The ECB is saying it doesn't necessarily want to do any more. Do | :24:25. | :24:31. | |
you worry about that? Absolutely. It is one of the five things that I | :24:31. | :24:36. | |
worry about. There is a list to assess summit at the summit. One is | :24:36. | :24:44. | |
Debt, solvency has a numerator and denominator. The denominator is how | :24:44. | :24:48. | |
quickly you grow and generate income. There isn't enough to focus | :24:48. | :24:51. | |
on that. Second, there is no vision for what the eurozone is going to | :24:51. | :24:55. | |
look like in three years' time. Third, the banking system is still | :24:55. | :25:01. | |
Abass. We still have capital inadequacy, asset problems. 4th, we | :25:01. | :25:05. | |
haven't had a clear signal between liquidity problems and solvency | :25:05. | :25:11. | |
problems, and as long as we don't delineate clearly, there will be | :25:11. | :25:15. | |
question marks. And at the big bazooka, which is the ECB, it has | :25:15. | :25:20. | |
and cumin. I sympathise with the ECB, because they have done a lot | :25:20. | :25:24. | |
and have been a bridge to know where. They need to be a bridge | :25:24. | :25:29. | |
there somewhere, but that place is not known. It is a long list and | :25:29. | :25:39. | |
:25:39. | :25:39. | ||
growth is the first item...., briefly, surely De -- surely the | :25:39. | :25:42. | |
ECB doesn't want to be a lender of last resort, but as the crisis | :25:42. | :25:46. | |
continues, it is having to do a lot of emergency support for banks. Are | :25:46. | :25:51. | |
you suffering from the fact that this crisis is not being resolved | :25:51. | :25:55. | |
and there would be enough growth? Growth comes from assessing | :25:55. | :26:00. | |
structural problems and of course, it is a concern. We see the growth | :26:00. | :26:06. | |
prospects for next year are weaker and the aim of the fiscal measures | :26:06. | :26:10. | |
is to limit the structural deficit, which of course takes into | :26:10. | :26:18. | |
account... That hurts growth. Structural reforms had growth. It | :26:18. | :26:21. | |
is reforming labour markets and things in the short term that | :26:21. | :26:25. | |
actually might slow down economies. As we have seen from various | :26:26. | :26:30. | |
countries, I think a number of measures have been taken in the | :26:30. | :26:35. | |
last few years, and if you look at Spain for instance, Spain has tried | :26:35. | :26:40. | |
to address its problems in the labour market. It is in a difficult | :26:40. | :26:45. | |
situation but it is trying to reform the labour market in the | :26:45. | :26:47. | |
direction where it will have more possibilities for employment. The | :26:47. | :26:52. | |
truck -- the same is true for other countries as well. You should take | :26:52. | :26:58. | |
into account the fiscal rule is addressing the structural deficit. | :26:58. | :27:02. | |
The structural deficit takes into account the business... We have to | :27:02. | :27:06. | |
leave it there. Thank you very much to all of you, of I'm Sorry, we | :27:07. | :27:11. | |
have to cut it off. Fog in the Channel, Continent cut | :27:11. | :27:15. | |
off. The old joke isn't as funny today, because it is clear where | :27:15. | :27:19. | |
the rest of Europe wants to go. It is Britain's future that since | :27:19. | :27:25. | |
clouded in doubt and that must include the future of the coalition | :27:25. | :27:29. | |
between Euro-sceptic Conservatives and Europhile Liberal Democrats. | :27:29. | :27:33. | |
Right now, Europe's top duo are apparently so fused in their common | :27:33. | :27:39. | |
purpose they are known as the single name Merkozy. The joke doing | :27:39. | :27:43. | |
the rounds at Westminster is that had David Cameron joined, it | :27:43. | :27:47. | |
wouldn't quite have spelt kamikaze, but politically it could have | :27:47. | :27:51. | |
amounted to quite the same thing. It would have been like the | :27:51. | :27:54. | |
Maastricht Treaty row of seven years ago, except far worse, | :27:54. | :27:59. | |
because he would have had to have brought a bill before parliament to | :27:59. | :28:03. | |
bring the treaty into effect. There would have been MN bends, with Bill | :28:03. | :28:08. | |
Cash and the critics who were around 20 years ago coming back for | :28:08. | :28:12. | |
a second bite -- amendments. There would have been a call for a | :28:12. | :28:16. | |
referendum, even a leadership challenge. The morning after in | :28:16. | :28:21. | |
Brussels was very different. Soft music, warm handshakes, and David | :28:21. | :28:25. | |
Cameron sticking his signature on the dotted line. It is just that | :28:25. | :28:30. | |
this was the paperwork for Croatia to join the EU, not the treaty that | :28:30. | :28:34. | |
most of Europe wanted. This does represent a change in our | :28:34. | :28:38. | |
relationship with Europe, but the court relationship, the single | :28:38. | :28:44. | |
market, trade, investment, that remains as it was and that is very | :28:44. | :28:48. | |
important -- core relationship. In terms of the future and referendums, | :28:48. | :28:52. | |
we will not be presenting a treaty to Parliament. Other countries are | :28:52. | :28:56. | |
going to be signing up to a treaty that has some quite invasive | :28:57. | :29:00. | |
aspects in terms of their sovereignty, their ability to set | :29:00. | :29:03. | |
their own budgets. It will be a matter for them how they deal with | :29:03. | :29:07. | |
their parliament. We will not take a treaty like that two hours. | :29:07. | :29:12. | |
ins and outs of the politics are tricky for David Cameron and are | :29:12. | :29:15. | |
pulling him in two different directions. Liberal Democrats think | :29:15. | :29:19. | |
that Britain should do whatever it takes the stage in the European | :29:19. | :29:23. | |
club, even if that means getting out of the coalition -- to stay. | :29:23. | :29:27. | |
Meanwhile, plenty of Conservative backbenchers think we should use | :29:27. | :29:30. | |
this as a once-in-a-lifetime opportunity to renegotiate better | :29:30. | :29:37. | |
terms, if not entirely out of the EU, definitely closer out than | :29:37. | :29:47. | |
:29:47. | :29:48. | ||
It is nearly 20 years since John Major's Government was brought to | :29:48. | :29:52. | |
the very brink by splits over Europe. One of the leaders of that | :29:52. | :29:56. | |
rebellion was clear - yesterday's veto should only be the start. | :29:56. | :29:59. | |
There are many people who think perhaps we have been proved pretty | :29:59. | :30:05. | |
well on the nail. What I'm saying is this - that there is a necessity | :30:05. | :30:08. | |
to tackle the nature of the European Union as it now is, and I | :30:08. | :30:13. | |
have said repeatedly in a debate yesterday for weeks, if not months | :30:13. | :30:16. | |
and years, that we have to have a fundamental renegotiation of the | :30:17. | :30:20. | |
treaties in our relationship to the European Union. Paul Goodman used | :30:20. | :30:25. | |
to be Conservative MP and now writes for the Tory grassroots | :30:25. | :30:28. | |
website Conservative Home, so he's pretty well tuned in to how | :30:28. | :30:34. | |
Conservative MPs are thinking. There has been a tide of Euro- | :30:34. | :30:36. | |
scepticism flowing through the Conservative Party for the past 25 | :30:36. | :30:40. | |
years since Thatcher's Brew speech. What this extraordinary veto has | :30:40. | :30:45. | |
done this amazing event, is it's given that tide another big push, | :30:45. | :30:48. | |
and after this, the question that a lot of Conservative backbenchers | :30:48. | :30:53. | |
will be asking is, well, we've always been told we've got to be in | :30:53. | :30:56. | |
the EU because of our national interests and because we have to be | :30:56. | :31:00. | |
at the heart of Europe. If we're not, we're going to be at the edge, | :31:00. | :31:03. | |
we have to renegotiate a completely new relationship because what's the | :31:03. | :31:09. | |
point of being at the edge but governed by all the rules? While | :31:09. | :31:12. | |
many Conservatives are clearly delighted, this is a very difficult | :31:12. | :31:16. | |
time for Nick Clegg, leader of the Liberal Democrats, a former MEP and | :31:16. | :31:20. | |
pro-European to his core, like much of his party. At the same time, of | :31:20. | :31:25. | |
course, though, he's in coalition with David Cameron. Any Eurosceptic | :31:25. | :31:28. | |
who might be rubbing their hands in glee about the outcome of the | :31:28. | :31:32. | |
summit last night should be careful for what they wish for because, | :31:32. | :31:36. | |
clearly, there is potentially an increased risk of a two-speed | :31:36. | :31:40. | |
Europe in which Britain's position becomes more marginalised, and in | :31:40. | :31:45. | |
the long run, that would be bad for growth and jobs in this country. | :31:45. | :31:47. | |
But other Liberal Democrats are keener to pin the blame on the | :31:47. | :31:51. | |
Prime Minister. I think David Cameron has let us down very, very | :31:51. | :31:57. | |
badly. It's not simply a matter of the written Declarations which end | :31:57. | :32:01. | |
up as treaties of one form or another. It's all about | :32:01. | :32:05. | |
relationships, and what happened at the dinner last night in Brussels | :32:05. | :32:10. | |
was that the 17 countries in the eurozone gathered amongst the 27 of | :32:10. | :32:15. | |
the European Union and said we need help. We need to give the financial | :32:15. | :32:18. | |
markets confidence about the euro that we're united in going forward. | :32:18. | :32:21. | |
We need to make arrangements as quickly as possible, and we needed | :32:21. | :32:25. | |
the help of everyone to do that, and David Cameron effectively said, | :32:25. | :32:29. | |
I'm not prepared to help or to lift a finger. In fact, he went worse | :32:29. | :32:33. | |
than that - he kicked them in the teeth that will not be forgotten. | :32:33. | :32:37. | |
Could Europe then split the coalition? After so many supposedly | :32:37. | :32:39. | |
impossible things have already happened, well, nothing appears | :32:39. | :32:44. | |
completely out of the question. David Grossman. Where does this | :32:44. | :32:51. | |
leave the coalition? With me is the Liberal Democrat Lord Oakshot and | :32:51. | :32:56. | |
the Conservative MP Bernard Jenkin. For you and other Eurosceptics, | :32:56. | :33:00. | |
this is brilliant news, what happened? Can I just make a | :33:00. | :33:04. | |
criticism, which is there is an awful tendency in the BBC to turn | :33:04. | :33:07. | |
this into a narrative about the coalition and about the | :33:07. | :33:09. | |
Conservative Party. This is actually about the substance of an | :33:09. | :33:14. | |
issue, and it's about the substance of an issue of which the | :33:14. | :33:17. | |
Eurosceptic... And how much of this programme have we spent talking | :33:17. | :33:20. | |
about the substance of the issue, and how much have we spent... | :33:20. | :33:24. | |
we had your opening report saying alas for Britain we're isolated. | :33:24. | :33:27. | |
This is interesting. You don't think this is significant for the | :33:27. | :33:30. | |
relationship within the coalition? I do think this is very significant, | :33:30. | :33:33. | |
and I think Matthew is going to think this is very significant. I | :33:33. | :33:38. | |
think everybody should regard this as significant that we are now in a | :33:38. | :33:41. | |
new situation, in a new relationship with our European | :33:41. | :33:45. | |
partners because they are going off and doing something on their own, | :33:45. | :33:49. | |
and we are not involved, but the foundations for that were laid at | :33:49. | :33:53. | |
the Maastricht Treaty, and this moment was always going to become | :33:53. | :33:57. | |
inevitable, and some of us have been saying that for a very long | :33:57. | :34:00. | |
time, and we now must face the consequences of it, and I think | :34:00. | :34:06. | |
David Cameron has now faced the consequences. He's confronted it at | :34:06. | :34:10. | |
Brussels. He said that Eurosceptics shouldn't be celebrating. Can you | :34:10. | :34:14. | |
think of one reason why they shouldn't? They shouldn't be | :34:14. | :34:19. | |
celebrating. Just doing "I told you so?" Bernard Jenkin has been a | :34:19. | :34:23. | |
serial rebel. He, with Iain Duncan Smith, has been leading the | :34:23. | :34:27. | |
opposition effectively of our membership of the European Union. | :34:27. | :34:31. | |
That's not true. He's now saying we told you so. The fact is this is a | :34:31. | :34:35. | |
very damaging day for Europe and for Britain. He says the Europeans | :34:36. | :34:40. | |
have gone off on their own. They haven't. Britain has cut itself off | :34:40. | :34:48. | |
from our main trading partners, our main allies, our main friends. It's | :34:48. | :34:52. | |
deeply dangerous. And millions of jobs, not just in the city, have | :34:52. | :35:01. | |
been put in danger. You say we have given up... What are we giving up? | :35:01. | :35:06. | |
A place at the table with 26 other countries. We have not given up. As | :35:06. | :35:10. | |
David Cameron was explaining, we're still in the 27. The treaty | :35:10. | :35:13. | |
structure is still answerable to the 27 structure as it was before. | :35:13. | :35:16. | |
What has a changed? The only thing that's changed is that the other | :35:16. | :35:20. | |
member states have decided to go off on their own and do something | :35:20. | :35:24. | |
on their own because they cannot conceive of respecting a national | :35:24. | :35:28. | |
interest - a relatively modest demand, I have to say. Many of us | :35:28. | :35:33. | |
would have liked... Excuse me. Excuse me. Are you seriously | :35:33. | :35:36. | |
suggesting that Angela Merkel for Germany and Nicolas Sarkozy for | :35:36. | :35:40. | |
France are not defending their national interests? Of course they | :35:40. | :35:43. | |
are. Don't be ridiculous. So they're saying - the fact is that | :35:43. | :35:49. | |
we - this is the end game of a desperately silly decision by David | :35:49. | :35:55. | |
Cameron when he was trying to buy right-wing votes in a leadership | :35:55. | :35:59. | |
election to lead the mainstream European grouping - he would have | :35:59. | :36:02. | |
been there in Marseilles with the Angela Merkel and Nicolas Sarkozy | :36:02. | :36:11. | |
in Spain, and he's off with the head bangers and wackos in Eastern | :36:11. | :36:19. | |
Europe... If - Prime Minister, would he have been at that dinner? | :36:19. | :36:24. | |
He wouldn't. You're talking rubbish. No, I'm not. You may not have liked | :36:24. | :36:27. | |
it, but Conservative Prime Ministers with a lot more | :36:27. | :36:31. | |
experience, frankly, than David Cameron were there in awhriens the | :36:31. | :36:36. | |
main players on the European right. Now they're completely isolated. | :36:36. | :36:39. | |
Now what really matters is that the British Prime Minister has been | :36:39. | :36:44. | |
doing special pleading for special interests in the City and | :36:44. | :36:47. | |
conciliating people like you who have never accepted the coalition | :36:47. | :36:54. | |
agreement. You're always asking for a referendum which isn't in the | :36:54. | :36:56. | |
agreement instead of putting British interests first. You think | :36:56. | :37:00. | |
this doesn't lead to a renegotiation between British... | :37:00. | :37:04. | |
Put it this way... You seem to be torn about what's happened. Why not | :37:04. | :37:10. | |
openly and honestly say so. I think there needs to be a renegotiation. | :37:11. | :37:15. | |
If we don't get that, that'll be driving us towards the exit. That's | :37:15. | :37:19. | |
why I want a renegotiation, because I want us to remain in the European | :37:19. | :37:22. | |
Union. It's not in the coalition agreement. You're trying to wreck | :37:22. | :37:29. | |
that agreement, which we all signed. The coalition agreement has been | :37:29. | :37:36. | |
overtaken by recent events. It did not. The coalition agreement didn't | :37:36. | :37:40. | |
envision the imminent collapse of the euro. It hasn't collapsed. | :37:40. | :37:44. | |
Despite any lack of help from David Cameron, it hasn't collapsed. | :37:44. | :37:48. | |
They're getting their act together, but without us. From now on are the | :37:48. | :37:53. | |
parties going to get on as badly as you two are? No. We have a deal. We | :37:53. | :37:58. | |
signed up to a deal on Europe which Mr Jenkin and his friends have | :37:58. | :38:00. | |
never accepted. They basically don't trust David Cameron. They | :38:00. | :38:04. | |
think he should have won. He didn't. The fact is a deal is a deal, and | :38:04. | :38:07. | |
all the time you're trying to undermine it, and it's deeply | :38:07. | :38:11. | |
damaging for Britain's position in Europe... I'm sorry. We have to | :38:12. | :38:16. |