17/02/2012 Newsnight


17/02/2012

Paul Mason reports from Greece as the country's economy fragments, and the political extremes vie for power. With Stephanie Flanders presenting.


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Transcript


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They said the single currency would bring Europe together. Instead for

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the past two years it has threatened to tear it aparts. And

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nowhere does the dream of Europe look more thread bear this week

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than in Greece. Paul Mason watches up -- as they clean up after the

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last riots and brace themselves for the next one. What is it like to

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live inside of a failed experiment no-one knows how to fix. Greece

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maybe faces a decade of austerity. Few believe the plan will work. If

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the centre can't hold, what or who will take its place? I don't think

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it will be non-violent government from the left. It's going to be a

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civil war. Two writers and two economists talk about the way

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Greece is now. How it has been changed by the crisis and what the

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Greek tragedy is doing to hopes of ever closer integration in Europe.

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Also tonight, the Home Secretary is so keen to deport Abu Qatada she's

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:01:30.:01:32.

to fly to Jordan personally to negotiate. Is there any point?

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Good evening. World stock markets rose to their highest level since

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the summer today on the hopes a much anticipated Greek debt deal

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may get off the ground. The arrangement was investors who

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brought -- bought debt after the crisis would get a third of their

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money back, rather than none. In Greece another human whraigs --

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humiliation as thieves got through the gates of the Olympia museum to

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escape with acparticular quits. Paul Mason got inside, closer, to

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see what the Greek tragedy feels like from the inside. We have to

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deal with the latest. What about this deal. A single moment when

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they managed to steal the acparticularies, it feels less safe

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than Cairo. In the last five days there has been a major wobble by

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the European Union, and the Germans and the Dutch. The question of

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issue does the European Union give Greece �130 billion new money and

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write off the debts. It's being presented we need more conditions

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to make sure they do it. They listed the conditions, whatever

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happens in the elections they will implement the plan. They have to

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come up with 325 million, further cuts in the minimum wage, and they

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have done it. While they were doing t the tone has changed above all

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from Germany and the Netherlands. Mr Shueblshueblshuebl -- Wolfgang

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Schaeuble saying even if they do it, they better default. There's only

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two weeks to do it. March 20th is the cut-off date Greece goes bust

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unless it can borrow a new 14 billion loan. That tone change, the

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manifesto, the people in Athens can feel it. They have been reacting to

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it. It nearly did fall apart yesterday. It has come back on

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track. The markets have risen. feels like there's a lot to do in a

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short time. Let's assume the many pieces come together, when it comes

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to the narrow question in the next few weeks. What is the plan after

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that, do you get the sense the Greeks or anybody else has a plan

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for what happens next? What it would need any economics textbook

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of the right and centre or left would say you have to codge bien

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the austerity with structural reconstruction. You need

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politicians to do it. If Brussels is going to design it, they are say

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"yes" to that "no" to that, if Brussels is going to decide it and

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foist it on you, you need a decisive leadership. They haven't

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got one now. They have a coalition government that has fallen apart.

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Mr Wolfgang Schaeuble said they will not get a government. It will

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be better if they have no politicians running Greece. There's

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a third force, the Greek people. They increasingly want a say in it

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all. There's going to be a civil war.

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There is a revolution against the government.

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People say if they continue of this, we have to guy Kalashnikov. The EU

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demanded austerity. The Greek Parliament voted for. It The

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streets erupted. In the aftermath Greeks were stunned. It's not the

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scale of the violence and destruction but the scale of the

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unsefrt. Nobody knows how the economy can be rebuilt and the

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politics are fragmenting. In a normal crisis a decisive vote in

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Parliament, a massive riot and the torching of 17 buildings might

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bring catharsis. This is no normal crisis. Greece faces maybe a decade

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of austerity. Few among the political political class believe

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the plan will work. It seems to many Greeks the more austerity and

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chaos they inflict on themselves, the more the big powers of Europe

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ask for. In the gritty streets this port

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district they know what it means when you make one in five people

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unemployed and cut health spending and slash the minimum wage.

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This clinic run by volunteer doctors and nurses was originally

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set up to treat migrants. Now one in three patients are Greeks. Like

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this woman, a cleaner who has lost her job. TRANSLATION: I'm here to

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get food and vaccinations for my children. Why can't you access the

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Greek main health service? We're not insured. My husband doesn't

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work and I don't work. -- work. In the latest round of austerity the

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government has locked -- knocked another billion off the medicine

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budget. Incomes are collapsing. If you are poor you have the same

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problems regardless if you come from Africa or Asia or a Greek

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citizen. For our organisation it's a whole new phenomenon to have

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Greeks. If the past these people could struggle for their daily life.

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If they had problems, but they could manage it. Now the burden has

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become more. It's more difficult for them. If in the past it was

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difficult for them to find a job now it's impossible. I'm afraid

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that with the crisis, the phenomenon will become worse.

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the crisis deepens, the weakest and the poorest suffer. Nowhere more so

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than those not supposed to be in Greece at all. This the ferry port

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that links Greece to Western Europe. On the seafront hundreds of illegal

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migrants live in this shattered factory. I'm taken in by an

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activity by a local NGO. The migrants got here because the

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government cut backs have made the Greek border forous. How is it to

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get interest Greece? Too easy. The border is not closed. It's open.

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They survive on charity. They receive no assistance at all from

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the Greek state. As the economy has collapsed so too is sympathy for

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the migrants. This is not Europe. I used to live London. This no look

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like Europe. The police can hit you. The people can swear you for no

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reason. The people hit us like animal. This man a graduate from da

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four is headed for London. He can't wait to see the back of Greece. How

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long have you been in this factory? I have six months and three months

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in the train. Because the police forced us to the leave the train.

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We came to the abandoned factory. I have six months here. Do you think

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the economic crisis has made the situation for migrants worse?

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we're going to the markets... give you food and some money.

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There's less now? Now the situation is changing because of the economic

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crisis. They drink from a pipe in the ground. Some have died from

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fires lit to keep one. It's shocking to see it in a continent

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that once prided into on a social model. The crisis has turned so

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much of Greece upside down. For Greek youth, the situation too

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looks dire. 50% of those under 24 are unemployed. Among them the

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extremes of politics are growing. In a bar run by one of the far left

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groups I meet the people who have got together to feed and clothe the

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migrants. None is a member of a left party. All intend to vote for

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one. All have been participants in disorderly protest. There's no

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future for us. Generally there's no future. We can't dream or live.

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This is a disaster. I've been hearing young Greek people say that

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to me for three years. What do you do about it? We're fighting and

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trying to convince people to make them understand that the crisis is

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a result of the capitalist system. Do you seriously think there could

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be a left wing government in Greece? I don't think it will a

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non-violent government from the left. It will be a civil war.

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carpenter, the teacher, the engineer, the social worker...

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These are professional people. The ideas they are expousing have

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become commonplace. What about work? If there's no work there's a

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revolution against the government. The Greek left, the communists, and

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the Ecologists have a combined poll rating of 43.5%. This country

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always had a strong left wing. Now it's strong enough to have their

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own TV studios and if there's an election a previously unthinkable

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prospect. We're talking about a new bloc of forces which have their

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internal differences but on the other hand agree on the rejection

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of the memory dumb and the suffering policy of austerity.

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you think this forces could propose a government? They must put asides

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their differences and after the next election yes form a new block

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of power. In truth the left is probably too splintered to attempt

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to form a government. But the despair call for some to call for

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elections to postponed. If we have elections so sure, we will have it

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in a few months and we can kiss the country and possibly the euro

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goodbye. The backbone of the Greek capital is the small form. On here,

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the business plan is just to survive. Now they face new taxes,

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endemic corruption, rising crime and the owner detects a nostalgia

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among these peers for the days of military rule. Old people will be

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thinking about the military government. For us it's finished.

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But they have one right, one right, they did stole even one penny.

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didn't steal a penny? Even one of those which is still alive he lives

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in one room. Places like this should be the bedrock of support

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for the centre right. They're not. I'm talking always to my children.

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I say to my children, do not nothing but you don't go just for

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vote or go for vote, just say you're are bastards. Just in 10,000

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we come out of Europe, that the Greek people... Spoil your vote.

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You don't trust any of them? No-one. Do you think democracy will

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survive? We like to believe it will survive. We like to believe 6789 --

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believe. F but the people say if they continue of this we have to

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buy Kalashnikov. There are still days when the sun shines and the

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old lifestyle rekindles and people forget their worries. For the

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political class that has tried to guide Greece through the mess

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there's deep concern. If we're not seriously looking at the

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repercussions we may end up Russia of the early 90. The very, very

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high poverty line. Russia in the mid90's had a poverty line higher

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than in the communist period. it had crooks running the country.

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It had crooks running the country. Whatever happens next week, those

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remain the stakes. And they are high. I'm joined now by Lord Lamont

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former Chancellor of the Exchequer, Will Hutton and Maria Margaronis

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who was in Athens last week and the author Louis De Bernieres who has

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described his relationship with the country as one of love and

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difficulty exach ration and pleasure. You were in Greece

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recently. Watching the film does it chime with the feeling you had

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there? Completely. What you can't get from the film is how pervasive

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the feeling is. If you walk through the formerly wealthy areas are

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closed or having sales of 50%. You see elderly Greeks looking for

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something to eat in the streets. There are junkies shooting up.

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There are the migrants with their scrap metal to sell. The thing that

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wasn't in the film the migrants can't leave Greece. The borders to

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exit are closed for them. They have to asking for - ask for asylum. It

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has caused incredible social tepblgss, and you don't feel how it

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gets under your skin. How keen even more middle class people though

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they may have taken a 30% salary cut in the public sector or may

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feel in danger of losing their jobs in the private sector, 60,000

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businesses have closed since the summer, live all the time with the

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uncertainty, are we going to default or not. People -- many have

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stopped watching the news, thing was the loss of the centre

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ground in politics, and what I was saying telling his children not to

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vote for anybody, to spoil their ballots. What does it mean for

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Greece. For decades Greece was polarised politically between left

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and right. In the last ten years it seemed a centre was developing. It

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looks to me the terrible economic conditions is probably going to

:18:11.:18:17.

force the people from the centre to the left. I think People

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unestimated at the beginning of the crisis that it's a fragile

:18:22.:18:29.

democracy. There are deep splits in Greek society. The splits of the

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civil war have never healed. There were 30 years when the left were

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essentially outlawed. Plane returned in the form of the

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Socialist Party. Both the main political parties keep their people

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happy through the client system. Distributed money for votes. Now

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people are moving to the left. I thought the gentlemen was

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optimistic making a left block. The Communist Party will never work

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with anybody else. There's a movement of the far right, a street

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fighting fascist party is on the verge of getting representation in

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Parliament. There was a historical parallel mentioned in the film of

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Russia in the 90's, and the mayhem you had there and what happened

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politically when the old system had fallen apart. You were Chancellor

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of of the Exchequer in some of that time. Do you think it's a relevant

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parallel what happened in the former Soviet Union? Not really,

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the transition from communist to a free market economy was something

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totally different. This is a tragic situation. The root cause is Greece

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should never have been allowed in the euro in the first place. There

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are no easy choices. No soft option. If one is taking a medium term view

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my hunch is Greece would be better off recognising the reality and

:20:08.:20:11.

getting out of the euro. That will pose all sorts of problems. It will

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be the better option for this reason: Even if by some miracle and

:20:17.:20:23.

it would be a miracle Greece achieved everything asked of it it

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will still only get down to a level of debt higher than that of Italy

:20:29.:20:33.

in the year 2020 and they would be asked in 2020 for a continuation of

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this. Frankly I think that's utterly impractical. Can they say

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in? It's a 64,000 euro question. They have forked out a lot more

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than that. If they leave it will be a cataclysmic event. The minute

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Greece would leave it will be a run on Greek banks. That's obvious. Any

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Portuguese citizen, and Irish citizen, and maybe Spanish citizens

:21:08.:21:13.

would take the same view. There will be bank deposits across the

:21:13.:21:20.

softer parts of the eurozone. There will be a flight to the triple A

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countries. Germany in particular. It would be beyond the capacity of

:21:27.:21:31.

the European Central Bank to finance. You will get massive

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write-downs. And a domino effects. And one of the countries would

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severely affected would be us. You're talking about the effect

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outside, or Greeks is it worse than what they are going flu now?

:21:45.:21:51.

Greece it would be hyperinflation. And the great hyperinflations, in

:21:51.:22:01.
:22:01.:22:01.

Germany in the 1920's, in China in 1940's are always followed by cats

:22:02.:22:10.

milk -- cats clis milk political events. Bloody awful in and out.

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Isn't it starting to look worse? It's impossible for them to keep

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going on this austerity for something like 12 years. Unr

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utterly unthinkable. What skp will says it will have repercussions in

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other parts of the eurozone. It's notable the German government is

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changing its attitude. Mr Schaeuble seems to be more of the view it

:22:36.:22:43.

will be better if Greece gets out. Preparations are being made. Fire

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walls are put around Portugal and Spain. The ECB can do a lot. When

:22:49.:22:54.

it comes to the people of Greece, leaving the euro would be difficult

:22:54.:22:58.

for them. The parallel is what happened to Argentina when it broke

:22:58.:23:05.

its link with the clar. -- dollar. You had a very, very uncomfortable

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ferred -- period they were better and they are benefitting today.

:23:12.:23:17.

is it the same thing than a currency peg or did it mean

:23:17.:23:21.

something more than that for the Greeks? Joining the European Union

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for the Greeks was a right of package. It's saying we're grown up

:23:26.:23:34.

and one of the big boys and equals to the European nations -- rite of

:23:34.:23:39.

passage. They haven't got the European Union they wanted. It's

:23:39.:23:44.

been an enormous disappointment. Far more fraught and -- than they

:23:44.:23:48.

expected. If the Greeks left the euro they could charge their own

:23:48.:23:55.

interest rates to suit their own economy. And they could devalue the

:23:55.:24:02.

drachma when they have to. When I was there in the last year or, so

:24:02.:24:08.

people wanted to stay. People want two things. People don't want to

:24:08.:24:15.

leave... Although the last poll said 48% want to leave the euro.

:24:15.:24:22.

Fundamentally Greeks want to say in Europe but don't want the austerity

:24:22.:24:28.

measures. We're talking as they they have the only opbgss. The way

:24:28.:24:33.

things play out it seems to be. But we have to think of the Europe we

:24:33.:24:37.

want. Someone who believes firmly in the European project, are you

:24:37.:24:44.

not worried all the associations with European integration, we need

:24:44.:24:49.

more European integration, if we will make the eurozone work, all of

:24:49.:24:55.

this has gone against this. People associate it with university. Don't

:24:55.:25:02.

you worry about what it does? Angela Merkel will cough up the

:25:02.:25:08.

money on Monday. I think that's what the markets are saying. It

:25:08.:25:13.

will come in trafrpblgz. The left in Greece haven't got an

:25:13.:25:20.

alternative programme. For the next month or so it will hold. Who can

:25:20.:25:24.

tell. Once you have got some kind of settlement with Greece, you have

:25:24.:25:32.

the Europeans have got to start talking about growth and employment.

:25:32.:25:40.

What is happening in France with Allond ahead in the French polls,

:25:40.:25:45.

and determined not to have this kind of austerity and trying to

:25:45.:25:50.

define a fresh economic policy for Europe is going to be the big story.

:25:50.:25:55.

In 20 years' time what is Greece going to look like, and the

:25:55.:26:01.

European Union? There's no way to know. I talk to friends in Greece

:26:01.:26:07.

and what -- say what is going to happen next. They have no idea. I

:26:08.:26:14.

think your point of -- of Europe is a good one. And not have

:26:14.:26:23.

unemployment now. The problem is larger than Greece. The mistake in

:26:23.:26:27.

debate is equating the euro with Europe. I think Europe is something

:26:27.:26:35.

separate from the euro. You can easily redefine the contures of the

:26:35.:26:42.

eurozone and maintain Europe. When Mrs Merkel says the euro is Europe,

:26:42.:26:47.

I think that's not the reality. For Germans it's tied up with their

:26:47.:26:52.

history and identity. It would be possible to have the eurozone with

:26:52.:26:56.

a narrower group of countries and operating better. I think it will

:26:56.:27:01.

be better for everyone in Europe. Do you think it was doomed. Do you

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think they overreached themselves and they have to step back. I agree

:27:07.:27:12.

they weren't eligible to come into the euro in the first place. Their

:27:12.:27:22.
:27:22.:27:24.

political culture was too corrupt. And what Maria... Was rife. I don't

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think you can put together incompatible countrys and economies

:27:29.:27:35.

and run them if they are the same. It's not a question of political

:27:35.:27:40.

culture but economic development. Greece emerged from a dictatorship

:27:40.:27:48.

in 19... They had ra lot to fix. When Greece started to

:27:48.:27:54.

industrialise, it hit globalisation and the oil crisis. The textile

:27:54.:27:58.

factories moved to Bulgaria and elsewhere. There are a lot of other

:27:58.:28:04.

reasons why Greece is in trouble. The political system bears blame

:28:04.:28:10.

too. In a minute we will be looking at what is going to happen to Abu

:28:10.:28:19.

Qatada. First to Martha in Glasgow. We are ranging far and wide tonight.

:28:19.:28:29.
:28:29.:28:34.

New York -- Extremely loud and incredibly close, and Lucien frued

:28:34.:28:44.
:28:44.:28:44.

and the many worlds of Martin Skrbgs corsese. Theresa May says

:28:44.:28:52.

she will travel to Jordan to try to strike a deal over Abu Qatada. Mrs

:28:53.:28:59.

May said she would continue where James Brokenshire left off in his

:28:59.:29:06.

talks this week. James Brokenshire is coming back. Why is she heading

:29:06.:29:11.

off there? What will she achieve. To continue the work she has done.

:29:11.:29:20.

The stumbling block, the reason the Strasbourg court won't allow his

:29:20.:29:25.

deportation is they don't believe evidence obtained by torture won't

:29:25.:29:30.

be used. Brokenshire tried to get an undertaking that would be the

:29:30.:29:36.

case. He has Gott a sufficient undertaking. Theresa May has gone

:29:36.:29:43.

there to get a further undertaking. It is difficult. It is in the words

:29:43.:29:50.

of some Jordanians to debase themselves in the face of the court

:29:50.:30:00.

of Strasbourg, where they say they don't use these strategies.

:30:00.:30:06.

there any chance at all we're going to see Abu Qatada headed on a

:30:06.:30:11.

plane? That would be the dream scenario in terms of the Home

:30:11.:30:17.

Office. There's another scenario. Even if they get the undertakings

:30:17.:30:20.

that would staff the judges in Strasbourg it will take a year to

:30:20.:30:26.

get rid of him. They are focused on making sure they can get him back

:30:26.:30:31.

into prison if there's a realistic chance of him being deported. They

:30:31.:30:37.

can then go back to the judge and there's a realistic chance please

:30:37.:30:47.
:30:47.:30:49.

put him back in prison. One paper, more about mrbd -- Murdoch. That's

:30:49.:30:55.

Paul Mason is back from Greece with an extended report and discussion on the way the old social and political norms are disintegrating in the face of austerity.