13/12/2011 Newsnight

Tonight, a chorus of criticism from Europe, as Cameron's vetos labelled

selfish nationalism. There are always for Britain to return its

rebate money. The head of the commission says the PM's demands

were unworkable. The United Kingdom, in exchange for giving its

agreement, asked for specific protocol on financial services,

which, as presented, was a risk to the integrity of the internal

market. This made compromise impossible.

We will discuss the implications for Britain.

One step closer to the God particle, are we about to solve the mystery

of mass in the universe. Earlier scientists got their first

tantalising results, as they hone in on the his boson. We take you

So, the recriminations from Europe have begun in full, today two

senior figures voiced their criticism of David Cameron's's

decision to veto the new treaty, calling it lacking in solidarity.

Jose Manuel Barroso, said the demands made by the Prime Minister

could have undermined the rules of the Common Market, and the leader

of the European People's Party, the largest group in parliament, called

on Britain to return its budget rebate as a result of the decision.

The split with Britain has distracted attention from the fact

that the separate treaty, agreed by the other 26 members, has failed to

take the jitters out of the markets. Tonight, amid accusations that

Britain wants to break the internal market, we ask if Britain's demands

were unreasonable and what happens now.

Their dream of a united Europe shattered. Many on the continent

that David Cameron cold shouldered have wasted no time getting their

own back on Britain. Today, in the European Parliament, the leader of

the influential grouping that British Conservatives abandoned

some years ago, even threatened the rebate on the UK's budget

contributions. Hard won fruit of so many negotiations.

TRANSLATION: The British isolation clearly shows that country's

Government regards the European Union as a simple free trade area,

it has no consideration for solidarity and responsibility

towards its partners, and that, in my view, implies a change in the

behaviour of the 26, and also to an extent, within the European

institutions, in behaviour towards that country, in particular I think

the British check is now up for question. Meanwhile, this former

Prime Minister, scorned a language he's usually happy to use. Tran

President, I will be speaking my native language today, because I

don't think English would be a very appropriate language to use!

In the end, though, he did revert to plain English, to deliver this

swipe at Mr Cameron. To say it with an English expression to our

British friends, when you are invited to the table, either it is

as a guest or otherwise you are part of the man u. The commission's

President, often considered an anglophile, blamed British

intransigence for the failure of his attempts to bridge differences

at last week's summit. Fortunately we haven't seen a split between the

European Union between the 17 and the 10, this was indeed the

greatest risk ahead of the summit. This is not an agreement at 17 plus,

but an agreement of 27, my mus. the single market, finally

established by -- minus. But the single market is the aspect

of British intergrai, that Prime Ministers, including Margaret

Thatcher, and David Cameron, have championed for more than 20 years,

would the UK really compromise it. The single market only runs because

it runs on the basis of qualified majority voting. If you give each

of the 27 nations a veto on each piece of findishly complicated of

financial services regulations, chemical regulations, the single

market would never have worked. That is what Margaret Thatcher knew,

that is why she put it in place in the first place. Now for Cameron

say yes we will undermine that principle, Barroso had an issue

with that. David Cameron used his veto, he said, to defend the City,

but did he need to? One of the proposed European measure that is

institutions here most fear, a possible tax on financial

transactions, can only be levyed by unanimity any way. As for other

regulations that can be introduced by qualified majority voting, many

say that Britain's view on financial services would carry

particular weight. This investment director, his firm

manages �2 billion of assets, isn't sure what exactly in the City the

Prime Minister was protecting. the moat kwhrif for this veet --

motive for this veto was to protect the financial services industry

from Brussels, we are not sure it achieves that outcome. In truth, we

are not really clear on what those threats might be.

Some people would be quite surprised to hear you say that, you

are in the financial services industry, and David Cameron said

everything he did at the summit last week he did for you? Well, I

think there is, the financial services industry is clearly a very

important part of the UK economy. It generate as great deal of tax

revenue for the UK Government. The Government needs to be seen to be

supporting what is a very important industry. I'm not sure that this is

the most effective way to go about it. But, we can understand that the

principles behind his actions are sound.

Many in the City think Britain, with its Anglo-Saxon wariness of

regulation is right to be worried about a union dominated by powers

traditionally keener on state interference, but Britain isn't the

only EU member that takes that view, some way we would have protected

financial interests by all lying with others within the framework of

treaty negotiations. The countries most disappointed by Cameron's

walkout are Britain's traditional allies, the northern Europeans, the

central east Europeans, that have a lot of common interests in Britain,

in terms of keeping the single market going, keeping the EU open

to international trade, and making sure that the EU doesn't go down

the road of more social and tax legislation and harmonisation.

These countries want Britain to be in the room, to be a strong voice

to stand up for their joint interests. Tonight Downing Street

said Mr Cameron had only been seeking equal, not preferential

treatment for the financial services industry. Whether that

industry and the rest of our economy are sliding into a

dangerous isolation, or are now a little safer from the still

gathering storm in the your Roy zone s a question even the City

doesn't know the answer to. I'm joined by Aino Lepik Von Wiren,

the ambassador to the UK for Estonia, Margot James, the

Conservative MP, and from Strasbourg the Dutch MEP and vice

chair of the European People's Party, Corien Wortmann-Kool, thank

you very much for-to-all of you for joining us. Corien Wortmann-Kool,

to -- thank you very much to all of you for joining us. Corien

Wortmann-Kool, why would Jose Manuel Barroso say that David

Cameron's demands undermine the single market? It was actually an

example of a very bad timing at a very bad moment to defend the City.

Because 26 member states wanted to agree on more fiscal discipline,

which would be included in the treaty. It would not affect the UK,

but to use this moment, this timing, to get exemptions from financial

markets regulation, that is really a very bad, that is not how you co-

operate together. Margot James? Well, it never is the right time is

it, apparently, to stand up for a very key British interest. Which

should be an interest across the whole of the European Union as well.

Financial services is not just important to the UK, it is

important to everywhere else as well. The British Government is

very concerned about the impending threats of regulation. Wasn't it

interesting, you heard what the man from the financial services office

was saying there, actually this whole idea of demanding unanimity

on the Robinhood tax is something already in place. You -- Robin Hood

tax is something already in place, you didn't need to make that

demand? That is not the only one coming down the track, that is one

of more than 40 threatening regulations coming over on to the

financial services industry. There is the whole issue of having to

clear all our euro trade over on the continent as well. That is not,

that is subject to qualified majority votinging, it is not just

the -- majority voting, it is not just that which is the headline-

grabber. There is already the need for unanimity, so there was no

need? That is only one of 40 regulations on financial services,

it is the only one subject to unanimity, all the others are sublt

to qualified majority voting. Subject to qualified majority

voting. You are the newest member of the eurozone, when you saw the

negotiations as a country, did you think that David Cameron's position

was attractive to a smaller, newer country like your's? We went to

Brussels last week, hoping that all 27 countries could agree on the

financial dis Palestinian, and also that the market would regain its --

discipline, and also that the market would regain its confidence

in the euro. It didn't happen, Estonia is happy about what was

decided, because it is nothing new for us, because our budget is

balanced, and for us it is new. There is never a moment you would

have taken Britain's side, where you would have imagined you being

part of the ten, on the outer block? We fully agree with what was

decided in Brussels. We are happy that it was 26 countries that it

didn't say with 17 and 10, so we are happy about it is decide. We

are hopeful that this will now be this new treaty will come as soon

as possible, because the most important thing for Estonia now is

that the euro will be table and the market will get confidence. Corien

Wortmann-Kool, when your leader of the EPP, I'm meaning, talks about

selfish nationalism, it is very hard not to think of it as sour

grapes towards a leader who, in a big headline, left your grouping a

couple of years ago. Well, let's look to today. The attitude of

David Cameron. When 26 member states want to agree on something

which would not affect the British, on the contrary, the British people

would benefit from having the eurozone crisis calmed down, so it

would actually be in the interests of the British. When such a moment

is chosen to get something additional out for the British, I'm

afraid, oh no I'm not afraid, I expect this will really harm the

British position on the negotiating table, on key pieces of legislation,

which are currently under discussion with regards to

financial markets and regulations. It will easily work the other way

round. You heard it there, Margot James will be isolated from this

decision? Well, there is a great deal more to be gone through before

it is all settled down. I respect the other view, but there is no

doubt that the safeguards that David Cameron argued for were

modest, moderate, they were not extreme in any way, and he

exercised what is our country's right to exercise. In the defence

of our interests. Of course it is in our interests to have the

eurozone crisis solved. We have been arguing that for months now.

Let me just take it a step further, because the Times front page I'm

hearing is talking about Tory euro- sceptics trying to force Cameron's

hand to push for a referendum on Europe now. Is that something that

he will do, is he prepared to go that far? I don't think so,

obviously you would have to ask him that. Do you know if he has ruled

it out, would you like that? Nch I don't think the time is right now

for a referendum at all. I think the dust has to settle. Even if

he's riding high in the polls? still would think that the

referendum that we promised was, from before the election, and that

was on the Lisbon Treaty, that was ratified, and there is absolutely

no commitment from this Government to hold a referendum. Let...Unless

There are more powers, could I just say, that are argued to go to

Europe. In that case, if there were any treaties that were proposed

that would demand more powers go from this country to Europe, then

that would automatically trigger a referendum. You have already vetoed

a new treaty, the question lies with Britain now, with your

Government, will you stop the institutions from functioning in a

way that you are table to, because they are 26 not 27, is that

something you will do? I think if there is any attempt to use those

institutions to regulate the financial services industry, in the

way that is being proposed, I would expect the Government to use the

law to prevent that from happening, yes. Corien Wortmann-Kool, one

thing your leader was saying today, is Britain should return its rebate.

He made this rather funny speech, there are no Kalashnikovs, no

declaration of war, of course that is a declaration, at least, of a

diplomatic war, isn't it? Will you get the rebate back? No, this is a

parliament with lively debate, as is the British parliament. So.,

what he wanted to make clear is it seems the British are only looking

to their own interests, and they only want to get things from the

European Union when they like it. But they also have to look to the

other 26. He was actually making clear that would be needed in order

to continue a fruitful co-operation. Aino Lepik Von Wiren, do you think,

briefly, that David Cameron made the wrong decision, when you saw

the way he negotiated, he didn't bring any other allies on board,

was that a mistake? We understand that the UK its decision. But

Estonia hopes in the future we will have 27 on the new agreement, and

it could be incorporated into the basic agreement in the EU, that it

will happen as soon as possible. Thank you very much.

Later in the propbl, we will be walking you through some of -- in

the programme, we will be walking you through some of the economic

blizzards in rather graphic form. The charts have been singled out by

some of our economists for what they tell us about the year we have

just had. Before then, a step closer to understanding the mystery

of mass, the scientists confirm they are on the verge of finding

what is called the God particle. The Higgs Boson is the last missing

piece in a leading theory, known as the standard model, which describes

how particles and forces interact to make the world we see about us.

Over to SERN, to our science editor. There is great excitement today in

Geneva with results that scientists say may be tantalising hints that

the Higgs Boson exists. Hundreds of scientists piled into packed

auditorium, and heard the latest data on the particle smashing

machine, the hadron collider, they looked at various graphs, which was

largely impet traibl to journalists there. The reason it has physicists

excited, is the two teams working separately have seen a spike in

their data at the same point, 125 gig ga electron votes, that is a

possible measure of the mass of the Higgs Boson. The mass range for the

Higgs Boson was like this at the beginning of the year, and now it

was moving and now we are here. In the open window, which is the most

likely one, there are fluctuations and intriguing hints, that is

exciting. Does that mean you are seeing the first hints of the Higgs

Boson? We may be seeing the first hints of the Higgs Boson. One of

the things we have just found out this week is the mass regions where

we are looking for the Higgs, the places where we see the possible

signals for the Higgs, it turns out they are consistent geen the two

experiments. Why is it important? If they are in the same place the

Higgs is there, if it was not there there would be no reason for them

to be in the same place. Does this mean the Higgs exists or not?

Unfortunately, on that crucial point we have lost our science

editor, but let's hear what she We don't really know why everything

around us exists. Why the universe has form. Why objects have mass.

The fundamental question about why we are here remains unanswered. But

today's announcement could change all of that. For decades scientists

have been searching for a particle, a particle that will give us an

insight into the workings of the universe, the Higgs Boson. To find

it, they have had to recreate the conditions of the Big Bang.

Billions have been spent in the hunt for the elusive Higgs, to

detect it, scientists have built the largest particle accel lator,

the Large Hadron Collider, an 18- mile tunnel below the French-Swiss

border. Sub atomic particles are fired through opposite directions

through the tunnel, at a rate approaching the speed of light.

With the help of magnets they smash into each other. Detectors monitor

the conditions, and search the debris for signs of the Higgs Boson.

But what is the Higgs Boson? For the last two years, scientists at

the SERN nuclear laboratory have been searching their results on the

hunt for the Higgs. The theory about its existence has been around

for 50 years. Until now no-one had seen any sign of it.

As the universe cooled after the Big Bang, an invisible force known

as the Higgs field formed, together with its associated Higgs Boson

particle. The field permeates the entire universe, and when a

particle without mass passes through the field it accumulates

mass, it develops form, that is why there is something rather than

nothing. It is very exciting, and it is also very important, because

physics needs us to be driven by a mixture of good theories, but of

solid experimental data. This hunt for the Higgs is like fishing where

instead of using modern tools you were in the water from the pond. It

might be looking at the endous, but it is the only very clean way -- at

the endous, but -- tedious, it is the only way when you have removed

the water from the pond to find any fish. In the run up to today's

announcement there was a real buzz, a sense we were on the verge of

something big. I would say it would be a milestone in this particular

field. Whatever the results will be. We took data now for two years, and

I was pretty much involved in data taking. Of course, it is big

excitement. In the control room at CERN, they are testing the

Clydeer's capabilities. Collider's capablities. When the machines

aren't being used, it is time for the engineers to see how far they

can push it to its limits. Harnessing the power of this

machine is very exciting. It has become a Holy Grail quest, a large

part of the motivation for the Large Hadron Collider was to find

the Higgs Boson, or whatever replaces it, this really is a

culminating point. The Higgs Boson is part of what is known as the

standard model of physic -- physics. This is an instruction booklet for

how the Cosmos works, to explain how the different particles and

forces react. This is the former head of theoretical physics at CERN,

Anwar expert at spotting particles amongst the debris. The standard

model explains all the fundamentals of particle physics, it can be seen

as on enormous jigsaw puzzle and there is a bit missing in the

middle. We have been looking for it for 30 years, and behind the sofa

we are finally finding it. Without the Higgs, the standard

model is incomplete, finding it would help confirm everything we

know about modern physics. Built layer upon layer since 19000. But

then in September, something happened that could blow all of

this apart. For nearly a century scientists

thought nothing could travel faster than the speed of light.

neutrons are arriving faster than they should. The speed of light is

not an abitary speed limit we made up because we like it, it is built

into our understanding of the very space and time around us. It is the

very stage on which physics happens. What has so rocked the world of

physics was a beam of neutrinos, the most common and weird of all

fundamental particles. They had been sent 450 miles from CERN to a

laboratory underground, deep inside a mountain in Italy. But they had

arrived 60 billionths of a second sooner than light would have done

travelling the same distance. Some scientists thought CERN had sent

them in bunches too wide to monitor accurately. So they did it again,

with a narrower beam. We sent the beam for two nanoseconds to the

target producing neutrinos and they measured it in Italy, you have a

precise timing measurement on it, it was the same as the measurements

they did before with the long beams. Professor Jon Butterworth works in

one of the two teams searching for the Higgs at CERN, he thinks there

are many ways the neutrino experiment could have gone wrong.

It is such an out-there result, there are many, many thousands of

results that confirm relativity, and one that challenges it. Before

you throw it away and challenge our understanding so much you want to

be sure. In the end it was a careful experiment, they have

raised any of the systematics that people raised initially, you have

to repeat the result until you are sure, as with any science. Making

sense of these results throws up all sorts of possiblities. Some

theories talk of ten dimensions of space. So could the neutrinos have

taken a short cut through another dimension? Arriving in Italy, back

in our dimension sooner than expected.

The result is so revolutionary, it has to be repeated before it is

seen as robust, but even if it is, would it mean anything to all of us

in the real world. I'm sure if you asked Einstien back in 1905 what

real world applications would his theory of relativity have, he

wouldn't give an answer. Now of course we know that relativeity has

to be taken into account in the global positions system, sat-nav.

Travelling faster than the speed of light, this is perhaps a crazy

remark. But I notice that in the financial world, they are now

timing their trades at the level of nanoseconds. So if you could make

neutrinos go a little bit faster than light, maybe someone would

find a competitive edge. With each of us facing our daily troubles,

and with the world of finance and politics in turmoil all around us,

why should it matter if we find the Higgs and whether the neutrinos go

faster than the speed of light, if there is some deeper symmetry under

the surface or not. There is in my opinion a very important means for

investing, this is very tiny amount of our wealth, in the future. In

what is curiosity-driven research. Without that, without that, we are

doomed. It has been within of the most incredible years for physics,

hints of the Higgs, and from nowhere, particles that could have

broken the cosmic speed limit, we could be on the verge of a new

physics, a new understanding of our universe, and our place within it.

We are going to tryen to that slightly dodgy line to -- try on

that slightly dodgy line to cross to Geneva to when of the CERN

physicists join in the hunt for Higgs. She talked there about the

sense of this year really, the moment that physics had become fun

again, and had become revolutionary. Why do you think this is so central

to that, why does this matter? has been a fantastic year for CERN

and the Large Hadron Collider, we have been waiting for this for 20

years, people have been talking about building these experiments.

Already in the summer, in the units we count the number of collision

that is have been created in the LHC, we had one inverse part of

data to look at. We were already starting to exclude certain masses

for the standard model Higgs Boson, today we were looking at five

inverse parts of data, five-times more data. For us it was a

tremenduously exciting day. The Higgs Boson is a key part of the

standard theory, the standard model that describes the way particles

interact, it describes the forces between the particles. Without the

Higgs Boson, none of the fundamental particles would have

any mass, they would whizz around at the speed of light. The universe

would not at all be as we know T the standard model has been

extremely successful in predicting the way particles interact, the

results of all of the collision experiments we have done up to now

are very well described by the standard model. Without the Higgs

Boson, the whole things falls apart. The question Susan never got to

answer before she disappeared, probably into a parallel universe

or different dimension, is does the Higgs exist, would you put money on

that now? We are certainly a step closer, we know the Higgs Boson is

pinned down into a much smaller range of mass than we knew before.

Within that mass range we have a tantalising hint, we have spikes

from the two experiments, ATLAS and CMS, what's more they have looked

at different ways the Higgs Boson might decay, so different channels,

different Higgs decay modes, we are seeing a hint of something lining

up. We are not at the point where we could claim we have evidence of

the Higgs Boson. The Last Years of Edward Thomas experiment, there is

still something like a 1% probability that the effects we are

seeing today could be a fluctuation of the backgrounds, for CMS about

5%. So it is not the end of the road for us. This is the way a

Higgs Boson signal would be emerging, but it is too early to

say something definitive. Let me ask you. There has been, as we can

hear from you, huge progress in this one area, if you expand this

out, where else do you think physics is becoming truly ground-

breaking now, what is exciting for you? The LHD programme, the Higgs

Boson discovery or exclues is just one component of the LHC programme.

The next steps for the Higgs will be to finalise the results we were

looking at today. Today we were showing preliminary results, in the

next few months we will publish those results. We will combine the

results of the two experiments, ATLAS and CMS, in 2012 we expect to

have something like four-times more data. We will be able to close the

book on the standard model Higgs Boson in the coming year. But then

the Clydeer will be shut down, we will be refurbishing parts of the

connections between the magnets and we will be able to resume taking

data at twice the energy. We are hoping to then start to explore

problems of physics beyond the standard model. One possibility

that we are very excited about is the theory of supersymmetry w the

low mass Higgs Boson that we may have seen some first glimpses of,

this would be consistent with this theory of supersymmetry, that says

all the normal particles we know, have a supersymmetric heavier

partner. Why supersymmetry is an appealing theory? One thing is does

is have the lowest mass supersymmetric particle, which

could explain dark matter. The matter we know and love described

by the standard model only makes up 4% of the universe, we don't know

what 96% of the Cosmos is made of. One of the hopes for the LHC will

be that we find a candidate for this missing dark matter that is

making up a huge fraction of the universe.

We would love to have you back at that point. Thank you very much.

Perhaps it was wrong for Twitter to call our next sequence chart porn,

br for those interested in economic data, it certainly doesn't get more

salacious than this. We have brought together 11 leading

economists to single out the graphic that best demonstrates the

key trend in this chilly economic year. The results are an know tated

and explained. We will ask a few of the contributors afterwards what it

the contributors afterwards what it tells us about the Tate we are in.

This chart shows the ten-year bonds in the eurozone. Before the euro

was created the markets thought there was differences in credit

worthiness in different countries. Greece had to pay for more debt,

Germany didn't have to pay very much. The euro was created and the

markets thought there was no delivering prospects of the

different countries. They all merged into one rate, practically.

Then we had Lehmans and the financial crisis, and the mood

changes significantly. There was clearly no support mechanism for

private sector has been paying down debt under zero interest rate

circumstances, which is highly unusual. People may be paying down

debt at higher interest rates, when the rate is at zero, they should be

borrowing and spending money. That is not happening in the UK. It is

not happening in the US or in Ireland or in Spain. This is not

what we learn in universities. So we are in a completely different

world compared to what we learned shows competitiveness of one

country against another in Europe, the horzontal axis shows their

relative trade performance. The countries in the top lefthand

corner have declining competitiveness and declining trade.

That is the underlying problem the eurozone is trying to grapple with.

This chart a really interesting because it shows the

competitiveness problem within the eurozone. Unit labour costs in

Germany have hardly risen since the euro was formed. But the vulnerable

ones, the ones in trouble, have seen their costs rise by 30-40%. In

the old days they could out of that by devaluing their currency. Now

they can't, they are locked within the euro. The interesting thing

about this, this is not being dealt with at all by any of the summits,

negotiations or deals. This is not a problem that can be solved by

bailouts, or write-offs. I think the graph is very striking,

because it shows so many things in one picture. Firstly, if you look

at what happened when Lehman Brothers went down in late 2008,

you can see all of a sudden the Bank of England's calculation

suggesting the market did think a chance that a country like Ireland

would default on its debt in the last four years. Recently you see

that is paled into incision with the things happening elsewhere. In

Greece there is suggestions of 100% default in the next five years.

The reason I think this chart is interesting, is because it tells me

that the rate at which the UK economy can grow sustainably over

the medium term, which people thought was 2.5% a year. Is now

down to half a periods or lower. If the economy does only -- half a per

cent or low. If it does that, unless there is deflation, that

will mean defaults on mortgages and the banks not lending. That is the

issue George Osborne needs to worry issue George Osborne needs to worry

about most. Those are our charts, and back by

popular demand the Financial Times US managing editor, Gillian Tett,

and Ann Pettifor from Prime scam economics. You should have heard

the gasps coming out of the corner of the study.

Anne, take us through your graph, first of all, and why you think it

tells us so much. My graph is taken from the

Government, the Treasury's budget report in March, it is striking to

me because it shows the growth in private sector debt in Britain from

1987-2010. It is taken from the McKenzie report on global debt,

they have excluded public debt. That is the bottom bar. It is less

than 50% of the beginning, and rises just above 50 towards the end.

So relative to that vast amount of private sector debt, public debt is

very small. But all of the public policy making and politicians and

economists are focused on the consequence of the growth of that

private debt. When the Government talks it talk about the problem

with public sector borrowing and bringing that down. If Ann's chart

is right the emphasis is completely wrong? The other chart on the

Newsnight website looking at the percentage of global Government

debt as a percentage the of GDP. It shows since the crisis has began it

has shot up very fast. I would say that the creation of Government

debt, over the last couple of years, has been extraordinarily rapid, and

forecasts for 2012, 2013 continue to see that. In fact, you are

looking at a tripling of UK Government debt, in about ten years,

if you forecast on a few years. That is why it gets ideolgical?

That is because it is a consequence of the crisis. My point is if you

don't address the collapse, the delefrpbaging of that private debt

now, -- deleverageing of that private debt and focusing on the

public debt, you are losing the cause of the crisis. Should the

Government sort out private debt, that is not its role? It can't step

in a heavy-handed moment now. If you look at the totality of the

charts the basic message is telling that many of the fundamental issues

to do with the eurozone were absolutely unworkable. You look

back at the charts on competitiveness, it is astonishing

anybody thought the eurozone could work in its form. It is not just

the eurozone that is a problem, the debt is key across the western

world, in the UK and US as well. The markets are panicking about it,

the level of stress in the markets is worrying. There is one more

thing these charts show, it is the defeatism of economists. There

aren't solutions in these charts, only problems, only the end of the

world, actually. Except for one, that is Ken. If you look at the

charts we have seen today, the dashboard we are presenting for

policy makers, flying the global economic aeroplane, if you like, it

is very different from a decade ago. A decade ago people were watching

things like equity markets, and inflation data. It shows in many

ways people have been simply watching the wrong metrics in the

run up to the crisis. Jo that is what my chart will actually show. -

- That is what my chart will actually show. Basically, what

Gillian said is completely right, everybody focus on equity markets,

bond markets, completely ignore the sexy world of what I have looked at

FRA, ORIA spread shart. The FRA is like, the cost of a three-month

loan for a bank, and how much more expensive that is, when there is an

over night loan from the ECB done over three months. It is the extra

cost a bank has to pay for a three- month loan, in these wholesale

markets, that are jamming up. In the summer the extra cost was only

0.2%, it is now up it a full 1% nor more. If you look it has been

forever rising, there is no oh the politician also do something, the

rate comes down. Is the ECB on that chart? It is not a real ECB, a rate

that is tied to. This is more the banks go into the wholesale market

and try to borrow money. This shows you the extra cost of them trying

to do that in the wholesale market. This is symptomatic, because the

bank is effectively insolvent and people are worried about lending

for them. Is this tell us, all the political argument about whether

the ECB should step in to bail out the eurozone? But they are stepping

in. This is telling us the ECB is not working. The Central Bankers

when they try to, all the things they announce, to try to alleviate

the problems in the markets t ain't working, clearly. The issue is,

this isn't chart born porn, this is chart mang er, it is the way of

communicating fatastically complex issues and geeky bits of the market

people have ignored for far too long, to the public at large. It is

fatastically important to democracy and that politicians understand

this stuff and understand the other issues you are pointing too as well

Ann. Can I say the only reason economists and politicians came to

look at credit masters is because of the great work by Gillian Tett.

There is a real interest in the data, the royal data, the peeling

away of all the soundbites and the politics, do you think that is

because of the state of the summits and the eurozones and all stuff we

have talking about? We need to get the public engaged and understand

how money goes around the world, or how right now it is not going to

around the markets effectively. People don't trust either

economists or politicians, because they have been conned. They were

told, don't worry, join the euro and there is fairyland there after,

go out and take a credit card, borrow to your heart's delight and

all will be well, we were encouraged by the politicians and

the Alan Green sldfan spans of the world and Central Bank governors,

and respected economists. You can also put it aside -- put it on

chart. The way you two disagreed about the way you read public-

private borrowing suggests that? is about the way economists look at

symptoms and not causes. The thing about my charred chart, I think it

is ideolgical to have a blindspot for the debts. For a decade we

pretended the debt wasn't there and focused on the public sector, that

is ideolgical. If can you map a system, you can start to see what

people aren't watching, the dark corners, they really matter. Ann

deserve as lot of credit, she was trying to highlight these issues

many years ago, unfortunately weren't enough people trying to map

a system, model it and modify it. We have to map the financial system

and work out how to change it. Politicians have very good at

blinding us with the science of modelling. The reason why the

wholesale credit markets are important, is because if banks

can't fund themselves, they cannot then turn around and give that

money to businesses and individuals. That is called a credit crunch.

Post Lehman, the credit crunch caused massive damage to the global

economy, not just the eurozone, the US economy, to the global economy.

This is important, these are markets people need to feck cuss on,

not equities and -- focus on, not equities and bonds. You can see 11

gorgeous graphs selected by some leading economists on the Newsnight

website. Let me take you briefly through the front pages of the

Apology for the loss of subtitles for 51 seconds

An interesting poll that has reached us, the Conservatives have

overtaken Labour in an opinion poll for the first time this year. This

is a bounce they are saying on the back of Prime Minister's veto of

the new European Union treaty. This comes from a riot areers -- Reuters

poll, Cameron more popular. A review from the press hacking

inquiry tomorrow, from all of us Some pretty serious weather in the

forecast, particularly from the end of the week. Overnight tonight it

is cold and showery in some places, developing the theme as we go

through the day. Some showers falling as snow, not just over the

high ground in the north, anywhere could have a flake or two of snow

as we go through the day. Some places will see a lot of sunshine

through the afternoon, one or two places seeing lively showers and

wintry showers too. Maybe down to low levels. Southern coastal areas

are most prone to heavy and thundery showers. Hail and a gusty

wind. Even across the south west of England a few flakes of snow. It

will be cold everywhere, despite some places seeing sunshine.

Temperatures around 5-6, when the showers come along they fall away

by several degrees. It is not all bad news, for Northern Ireland

plenty of sunshine, largely bright and breezy through the afternoon.

Showers still affecting northern and western parts of Scotland.

Further south and east, after another showery start, things will

tend to dry out. On Thursday, some sunshine, for a time, rain clouds

gathering across the south west. There is a lot of uncertainty about

what happens after that. The low pressure system winding itself up

down to the south west is not sure of the way to go. There is the