:00:09. > :00:12.All those protestations that we are all in this together, and it turns
:00:12. > :00:17.out that the going rate for dinner with the Prime Minister is a
:00:17. > :00:23.quarter of a million pounds. �100,000 is not Premier League, it
:00:23. > :00:29.is not bad, it is probably bottom of the Premier League. �200,
:00:29. > :00:32.�250,000 is Premier League. It must be some meal. Can the
:00:32. > :00:35.Conservatives' deputy chairman is buys donors nothing more than food
:00:35. > :00:40.and wine. The Government plans to sell part
:00:40. > :00:44.of Royal Bank of Scotland to Abu Dhabi, is the taxpayer being short
:00:44. > :00:48.changed. We talk to the world's most powerful woman about being
:00:48. > :00:53.Chancellor of Germany, her love of Martin Luther, and being called a
:00:53. > :00:57.Nazi by the Greeks. TRANSLATION: I come from a federal
:00:57. > :01:03.country, where sometimes northern Germans make remarks about the
:01:03. > :01:06.Bavarians, or the Bavarians make comments about the north Germans, I
:01:06. > :01:09.am tolerant. More of the same anyone, the Press Complaints
:01:09. > :01:19.Commission pleads for its life, claiming self-regulation can keep
:01:19. > :01:24.
:01:24. > :01:28.the newspapers honest. At least one Going out to dinner this week? Why
:01:28. > :01:33.not go somewhere really special, like Number 11 Downing Street, it
:01:34. > :01:38.will only set you back a quarter of a million or so. Today the
:01:38. > :01:42.Conservative Party was forced to disclose the names of a number of
:01:42. > :01:46.wealthy men, who sat at the Prime Minister's dining table after
:01:46. > :01:51.giving a shed load of money. There is nothing illegal about it, but in
:01:51. > :02:01.current circumstances the Government is embarrassed. Nothing
:02:01. > :02:08.
:02:08. > :02:13.a political editor enjoys more, Not so much "bring a bottle" as
:02:13. > :02:21."bring a chequebook". Pay to dine with the Prime Minister, that was
:02:21. > :02:27.the boast of the former treasurer, Peter Cruddas, the Cameron team
:02:27. > :02:30.deny emphatically that it bought policy. I live in a nice flat above
:02:30. > :02:35.Number 11 Downing Street up there, what I get up to in there is
:02:35. > :02:39.private. Today, to close down the story, Downing Street had to bare
:02:39. > :02:43.all. They clearly decided contrition is a dish best served
:02:43. > :02:47.hot. There is much speculation about dinners in my flat in Number
:02:47. > :02:49.Ten Downing Street. The position is this, in the two years I have been
:02:49. > :02:53.Prime Minister, there have been three occasions on which
:02:53. > :02:57.significant donors have come to a dinner in my flat. In addition
:02:57. > :03:00.there was a further post-election dinner, including donors, in
:03:00. > :03:05.Downing Street itself, shortly after the general election. We will
:03:05. > :03:08.be publishing full details of all of these today. None of these
:03:08. > :03:12.dinners were fundraising dinners, and none of these dinners were paid
:03:12. > :03:14.for by the taxpayer. I have known most of those attending for many
:03:14. > :03:18.yearsment The three dinners included more
:03:18. > :03:21.than a dozen wealthy attendees, Labour were left asking what first
:03:21. > :03:24.attracted the Prime Minister to these millionaires. They wasted no
:03:24. > :03:29.time in seeking to extract political gain. Why wasn't the
:03:29. > :03:37.Prime Minister turned up to answer questions? Is it because there is
:03:37. > :03:41.not enough money on offer? The Labour leader was insensed that
:03:41. > :03:46.it is a Conservative peer that has been charged with investigating
:03:46. > :03:50.donations. Ed Milliband called for an independent inquiry. An inquiry
:03:50. > :03:57.into the Conservative Party, by the Conservative Party, for the
:03:57. > :04:02.Conservative Party. Is a whitewash and everyone knows T
:04:02. > :04:06.We need a proper, independent inquiry, appropriate to the gravity
:04:06. > :04:10.of what is at stake. For some in David Cameron's own party, the
:04:10. > :04:13.story points to a deeper discomfort. We have a series of good policy
:04:13. > :04:18.that help working-class people, that are designed to help the most
:04:18. > :04:21.vulnerable. The problem is not enough people know about it. We
:04:21. > :04:28.have the pupil premium, we have council tax discounts and freezes,
:04:28. > :04:30.we are allowing people to buy their own homes with over �5,000, and we
:04:30. > :04:34.have apprenticeships. At the moment they are a series of clothes pegs
:04:34. > :04:38.without a washing line linking them together. We need to do a lot more
:04:38. > :04:41.to communicate people that we are the party of the vulnerable, and
:04:41. > :04:44.for the hard working-classs, and or aspiration and opportunity. David
:04:44. > :04:48.Cameron has long been sensitive to the idea that he's seen as too
:04:48. > :04:52.close to the rich. Recently he wanted to talk about the rise in
:04:52. > :04:56.the cost of living for families, but he was warned off it by
:04:56. > :05:01.internal polling showing it just isn't credible coming from his lips
:05:01. > :05:05.W this new �18 million dining club, the problem becomes more acute,
:05:05. > :05:09.especially after last week's budget when they cut the 50p rate of tax.
:05:09. > :05:14.The Liberal Democrats think he may be in need of a game-changer,
:05:14. > :05:18.something to change the terms of debate, that may be party finances.
:05:18. > :05:23.Party funding is the bad dish of British politics, uneaten for a
:05:23. > :05:26.decade. A fresh set of talks is scheduled to begin this week. The
:05:26. > :05:30.last recommendations called for state funding of political parties.
:05:30. > :05:34.Sources ruled this out, but believe other recommendations made then,
:05:34. > :05:38.such as a cap on donation, to be pretty much right. In his statement
:05:38. > :05:44.today, the Prime Minister set out the Conservative Party's opening
:05:44. > :05:48.gambit. It would be a cap at �50,000. But according to the most
:05:48. > :05:53.recent report, by Sir Ian McKellen, if there were such a cap, the
:05:53. > :05:57.Tories would lose 48% annually, and Labour would lose 81%, you could
:05:57. > :06:00.see why that was David Cameron's starting position. Alternatively,
:06:00. > :06:04.if the Tories accept a �10,000 cap, the level recommended by Kelly,
:06:04. > :06:09.that goes up to 76%, less attractive. It is also very
:06:09. > :06:14.unattractive for Labour too, their figure goes up to 91%.
:06:14. > :06:19.This week, the negotiations will turn on whether union also allow
:06:19. > :06:23.Labour to accept trade union members, deciding for themselves
:06:23. > :06:27.which party their money goes to. There is pressure from the other
:06:27. > :06:31.side too, one former Tory donor doesn't want to see a cap at all.
:06:31. > :06:34.It is for this reason, there is a low turnout in elections, that is
:06:34. > :06:37.partly because the parties can't get their message across. To get it
:06:37. > :06:43.across, they need money. They won't get enough money in other ways. The
:06:43. > :06:48.voters don't want to give them any more money, that is clear enough.
:06:48. > :06:51.In any case, getting money from Governments, other countries show,
:06:51. > :06:55.leads to corruption. There is one gap for many Conservatives scanning
:06:55. > :07:00.the seating plan at David Cameron's dinners, the well-off have their
:07:00. > :07:03.place at the table, but the fear is, at the next election, the less
:07:03. > :07:07.well-off won't feel invited. Michael Fallon is both deputy
:07:07. > :07:13.chairman of the Conservative Party, and no changer to the studio, thank
:07:13. > :07:17.you for coming back. Will you now investigate every one of the
:07:17. > :07:19.donations that happened on Peter Cruddas's watch? Peter Cruddas
:07:19. > :07:23.recommended nobody to have dinner, he didn't get anybody through to
:07:23. > :07:29.the Downing Street flat. This is one of the first big donations that
:07:29. > :07:33.he was trying to negotiate. Yes, we will. We have got Lord Gold, he's
:07:33. > :07:38.now a senior lawyer in charge of the disciplinary matters, he will
:07:38. > :07:41.investigate what happened. He's also a Tory peer? It is a Tory
:07:41. > :07:43.disciplinary matter, he will look at exactly what happened. Any
:07:43. > :07:48.evidence the Sunday Times has got, that there are issues here,
:07:48. > :07:52.regarding our compliance. I can assure you, the whole thing will be
:07:52. > :07:56.fully investigated. I'm worried he might have misled people? Who?
:07:56. > :08:00.Peter Cruddas? Yes, he did. Of course he did, that is why he
:08:00. > :08:04.resigned. When he said it would be awesome for your business if you
:08:04. > :08:07.were to donate? He absolutely misled, he said access to Downing
:08:07. > :08:12.Street, influence on policy, all that was wrong, that is
:08:12. > :08:15.unacceptable. If you were one of these unfortunate donors who had
:08:15. > :08:18.given your party money in the hope it would be awesome for your
:08:18. > :08:21.business, or you might have some influence over policy s you should
:08:21. > :08:28.really have your money back? ought to have an apology. We make
:08:28. > :08:32.it clear to all our donors. Why not money back? We made it clear to all
:08:32. > :08:37.donor that is you don't have influence over the party. When
:08:37. > :08:40.Bernie Ecclestone gave the Labour Party he had policy changed.
:08:40. > :08:43.are talking about Bernie Ecclestone, but that isn't the matter of the
:08:43. > :08:48.moment, the matter of the moment is donations to your party. Will you
:08:48. > :08:53.give the money back? No. You won't? We made it very clear that what
:08:53. > :09:00.Peter Cruddas did was not right. He has resigned, apologised and
:09:00. > :09:05.accepted it wasn't right. No money was accepted from him. He has been
:09:05. > :09:10.working for you for a year? He was the principal treasurer since last
:09:10. > :09:12.month. Let's be clear about that. year? The donation under
:09:13. > :09:17.investigation by the Sunday Times wasn't offered, and it wasn't
:09:17. > :09:20.accepted. It is the only one that we know about though, isn't it?
:09:20. > :09:23.wasn't accepted. It was the only one that the Sunday Times has
:09:23. > :09:26.evidence. Have you accepted plenty of others? We have accepted
:09:26. > :09:30.donations in the past, they go through very strict compliance
:09:30. > :09:33.rules, for example, on where they come from, and donors are told,
:09:33. > :09:37.look, this does not get you special access, it does not give you
:09:37. > :09:42.influence over policy. He was wrong about that, that is why he resigned.
:09:42. > :09:46.The Prime Minister says that if there were a cap of a mere �50,000
:09:46. > :09:50.a year in donations, a year, in donations, to political parties,
:09:50. > :09:55.that would, as he puts it, take the big money out of politics. Do you
:09:55. > :09:59.share that view? Yes, because I think all political parties...You
:09:59. > :10:03.Don't think �50,000 a year is big money? All political parties would
:10:03. > :10:10.like to have smaller and medium- sized donation, we made that offer
:10:10. > :10:15.to the Labour Party. We would lose by it. The alternative is taxpayer
:10:15. > :10:20.funding. �50,000 a year, �250,000 per person in the course of a
:10:20. > :10:24.parliament is not big money? There are different types of donations.
:10:24. > :10:28.Let's be clear about this, the alternative to all of this is
:10:28. > :10:32.taxpayer funding. I'm not talking about the alternative. If you don't
:10:32. > :10:34.want tax-payers to fund the party. I'm talking specifically about how
:10:34. > :10:39.you believe individual donations should be organised. I'm trying to
:10:39. > :10:42.get it clear, the sort of world in which you move. �50,000 a year,
:10:42. > :10:46.�250,000 in the course of the parliament, is not considered to be
:10:46. > :10:55.big money? If you want your politics to be free of state
:10:55. > :10:59.funding, the politics cost money you need to be free. We are not
:10:59. > :11:04.based on the trade unions like the Labour Party. We accept donations
:11:04. > :11:09.from �20 all the way up. Christopher Kelly said it could be
:11:09. > :11:15.capped at �10,000? We have made an offer to the Labour Party, who take
:11:15. > :11:19.�4 million from one union. We have made an offer to the Labour Party,
:11:19. > :11:25.let's stop this. Isn't that important. You are the party that
:11:25. > :11:28.keeps on saying "we are all in this together". If you honestly think
:11:28. > :11:32.�250,000 in political donations in the course of a parliament, is not
:11:32. > :11:36.big money, then we are not all in this together? �50,000 a year, of
:11:36. > :11:39.course it is a large sum of money. We take lots of donations, small,
:11:39. > :11:43.medium and large. The question you should be asking tonight. Don't
:11:43. > :11:49.tell me, it is about the Labour Party? It is not three meals over
:11:49. > :11:53.two years. What this country faces tonight is a potential tanker
:11:53. > :11:56.drivers' strike by the trade union Unite, which gives 30% of the
:11:57. > :12:00.Labour Party's money, elects the Labour Party leader, and you
:12:00. > :12:07.haven't yet asked a single question about that. That is for the Labour
:12:07. > :12:10.Party. Thank you very much. The taxpayer is about to see
:12:10. > :12:17.something for their money. Newsnight has learned that the
:12:17. > :12:24.Government is talks with Abu Dhabi in order to sell them a share of
:12:24. > :12:28.RBS, the institution that Sir Fred Good win wrecked. They hope to
:12:28. > :12:31.conclude a deal by the end of the year. The shares will probably be
:12:31. > :12:37.sold at a fraction of the cost to the taxpayer. Not a brilliant
:12:37. > :12:41.investment. There might soon be a touch of the
:12:41. > :12:48.Middle East about Britain and Scotland's most famous bank.
:12:48. > :12:52.Especially if part of it is sold to Abu dab bee, it is the richest part
:12:52. > :12:56.-- Abu Dhabi, it is the richest part of the Arab Emirates. It has
:12:57. > :13:03.gone on to become one of the richest statelets of the world, on
:13:03. > :13:09.the back of an abind dance of oil. At Park Lane, one of the most
:13:09. > :13:14.expensive places in the world, a home to the Abu Dhabi bank and
:13:14. > :13:20.wealth fund, with a war chest of billions. More than enough to buy a
:13:20. > :13:26.portion other all of RBS, worth a more modest �17 billion. The
:13:26. > :13:30.political fall-out of selling at a loss could be massive for the
:13:30. > :13:35.Government. Having bought shares on average at 50p a share, selling at
:13:35. > :13:39.today's 28p a share, won't be great, especially at a time of Austerty.
:13:39. > :13:43.Add in that Northern Rock was sold at a loss to Virgin Money, and the
:13:43. > :13:47.critics are sharpening their tongues. We need to make sure we
:13:47. > :13:51.get the full amount of money back the taxpayer invested in the first
:13:51. > :13:54.place. If we have a hastey approach by the Chancellor, there is a risk
:13:54. > :13:58.to lose millions of taxpayer money. That would be very, very wrong. And
:13:58. > :14:03.it would be better if we waited for the economy to recover for the
:14:03. > :14:07.shares price to recover, so we got better value for money.
:14:07. > :14:10.But there are also notable advantages in selling a chunk of
:14:10. > :14:13.RBS. It will send a strong signal to the markets that the Government
:14:13. > :14:17.does not want to be in the bank- owning business for the long-term.
:14:17. > :14:22.It might allow the Government to deflect political pressure for the
:14:22. > :14:25.annual bonus row coming around. Having another large and not so
:14:25. > :14:28.democratically accountable shareholder has its advantages.
:14:28. > :14:31.market reaction would be positive to this move. I think it
:14:31. > :14:36.demonstrates some clever thinking on behalf of the Government. That
:14:36. > :14:40.rather than just selling out, and possibly not getting full value for
:14:40. > :14:45.its stake, it is working stragically with some very rich,
:14:45. > :14:50.very wealthy, very powerful funds, such as Abu Dhabi, in crystalising
:14:50. > :14:53.this value. Unlike Norway or other sovereign
:14:53. > :15:00.wealth funds, Abu Dhabi doesn't make its investments through a
:15:00. > :15:04.single entity or fund, but rather uses a number of vehicles to do so.
:15:04. > :15:08.The highest-profile is the be ady dab bee Investment Authority, owned
:15:08. > :15:16.by the ruling -- Abu Dhabi Investment Fund, owned by the
:15:16. > :15:26.ruling family. IPIC is another one, owning shares
:15:26. > :15:28.
:15:28. > :15:33.in a company in Spain. And then Daimler and Galactic with AAbar.
:15:33. > :15:38.The shaik has bought Manchester City, we has he bank rolled to
:15:38. > :15:42.almost topple mapblt. I think Abu Dhabi will be in the bank for the
:15:42. > :15:46.long-term. That is what kind of investment these sovereign wealth
:15:46. > :15:49.funds make. It is the right policy from their point of view. They can
:15:49. > :15:55.afford to buy something that looks like it will turn around. And wait
:15:55. > :16:01.for it to do so. But so can the UK Government. And it is surprising
:16:01. > :16:04.that we are not waiting for the results of the restructuring to
:16:04. > :16:08.have this the effect. The chair of the select committee
:16:08. > :16:13.thinks the sell-off process shouldn't be delayed. We will want
:16:13. > :16:17.to look very closely at the terms of the sale, to make sure it holds
:16:17. > :16:21.good value for money for the taxpayer. Just as we have looked at
:16:21. > :16:25.every other aspect of these enforced nationalisations. It does
:16:25. > :16:32.stpriek me as -- strike me as sensible to take an opportunity if
:16:32. > :16:35.it is there, to reduce the shareholding at some point. At 80%,
:16:35. > :16:39.the itch to intervene by the Government is always there. The
:16:39. > :16:43.best prospect for the taxpayer, and in the end, for the retail bank
:16:43. > :16:47.user, lie in RBS being run as a fully commercial company. Even
:16:47. > :16:52.though it is the subject of talks between the Government and Abu
:16:52. > :16:57.Dhabi, RBS has no direct say in the outcome. That is strange because
:16:57. > :17:01.the people who benefit most will be the bankers that work there. The
:17:01. > :17:07.most senior guys are paid mostly in shares, that could recover strongly
:17:07. > :17:10.that all depends on RBS, Britain and Abu Dhabi avoiding the kind of
:17:10. > :17:13.economic shocks in the next few years, we have already seen in the
:17:13. > :17:23.past few years. To try to make sense of some of
:17:23. > :17:28.
:17:28. > :17:32.this are the coalition's answer to the two -- Two Ronnies. This is �4-
:17:32. > :17:35.�5 billion of tax-payers' money being thrown away? I don't think it
:17:35. > :17:38.is, we haven't heard anything concrete, but the most important
:17:38. > :17:44.thing and there should be strong agreement on this, is we get as
:17:44. > :17:47.much money back for this bank as possible. But there will be a
:17:47. > :17:54.significant loss? Well, who knows. Billions of pounds? When the money
:17:54. > :17:59.was put into this bank, everybody knows that it was put in, not to
:17:59. > :18:08.try to get a good investment, it was put in to keep the bank upright.
:18:08. > :18:12.So, we heard the Labour character on the film saying that if it was a
:18:12. > :18:18.loss it would be a disaster. It is true to say the nationalisation of
:18:19. > :18:22.RBS was a disaster, the point is from here how to get the best value
:18:22. > :18:26.deal. But it will be sold at a loss? We don't know that, we know
:18:26. > :18:32.that the shares are trading below the price they were bought at.
:18:32. > :18:37.Remind us of the price they were bought at? 50p, on average, around
:18:37. > :18:41.60p. And they are now trading at about 28p? Every penny on the share
:18:41. > :18:46.price is a billion pound of taxpayer money. Getting have a
:18:46. > :18:50.value for money out of it is really important. Every penny on the share
:18:50. > :18:54.price is a billion pound adrift. billion of your money and my money
:18:54. > :18:58.and every viewers' money. argument being, I suppose, on the
:18:58. > :19:02.other side, that it is no business of a Government to run a bank?
:19:02. > :19:05.we have got to run that bank, and we have to go on running it for
:19:05. > :19:11.some time to come. We have to make sure it runs in the national
:19:11. > :19:16.interest. Now, the issue is not about getting our money back quick,
:19:16. > :19:20.as Matthew said. We put the money in at 50p, the reason was, to stop
:19:20. > :19:24.the economy collapsing, and make that bank lend. It is still not
:19:24. > :19:30.doing it. It failed its lending targets under Project Merlin, the
:19:30. > :19:34.economy is flat, partly because the banks, and RBS is the biggest small
:19:34. > :19:36.business lender, is not lending as it should to create jobs and
:19:36. > :19:41.businesses. That is absolutely the vital. That is what matters. There
:19:41. > :19:47.is no rush at all. Selling it is the wrong thing to do? Certainly at
:19:47. > :19:54.the moment. To crystal yois a loss when you put the money in at --
:19:54. > :20:00.crystalise a loss, when you put the money in at 50p and selling it at
:20:00. > :20:03.less than 30p. What it is meant to do is tie bonuses to proper lending
:20:03. > :20:08.performance. At the moment we are lurching from month to month, and
:20:08. > :20:13.year to year, without a proper plan. What will be the effect of the
:20:13. > :20:18.price on the remaining shareholder the taxpayer has on this bank, of
:20:18. > :20:20.selling something now? It may be good. We have to have a more
:20:20. > :20:26.sophisticated analysis than the one put forward. It may be that if you
:20:26. > :20:31.sell a small chunk now it has a positive impact. Investors can see
:20:31. > :20:35.this is on its way back to private ownership, and obviously we know
:20:35. > :20:38.from the past, that if the Government tries to run a bank
:20:38. > :20:42.directly, or run businesses directly, it gets into all sorts of
:20:42. > :20:47.trouble. You don't want politicians making decisions about whether RBS
:20:47. > :20:52.should lend. We could hardly do worse than the decisions RBS made
:20:52. > :20:56.itself? In terms of the lending targets, RBS actually did hit its
:20:57. > :21:03.Merlin target. It did not. That is rubbish. On small business that was
:21:03. > :21:05.the only one it didn't hit, where it lent �74 billion since a �75
:21:05. > :21:09.billion target. The small businesses matter. They should be
:21:09. > :21:13.lending much more. We said in our coalition agreement, that you
:21:13. > :21:18.signed as well, that we should consider net lending targets for
:21:18. > :21:21.the nationalised banks, and frankly, that is exactly what we have to do.
:21:21. > :21:25.I didn't personally sign the coalition agreement, but I
:21:25. > :21:29.certainly standby it. In small businesses it matters, big business
:21:29. > :21:33.can borrow from s they are not -- anybody, they are not the problem.
:21:33. > :21:35.In your constituencies they are coming and telling all the time
:21:35. > :21:39.soon, that perfectly viable businesses are being squeezed, and
:21:39. > :21:43.cannot get a loan. Very often it is RBS still the big problem. This is
:21:43. > :21:48.what is holding back the economy, in a very big way, it is not about
:21:49. > :21:52.whether we get 30p or 40p back when they sell the shares, or 50p, it is
:21:52. > :21:57.about making the banks lend, and Royal Bank of Scotland in
:21:57. > :22:01.particular supports business and jobs, that is still vital. Each of
:22:01. > :22:05.the pennys is a billion pound, that matters. If we can sell off the
:22:05. > :22:09.business now and it has a positive advantage on the share price, that
:22:09. > :22:12.is good. On small businesses 74 out of 75 isn't quite hitting the
:22:12. > :22:19.target but close to it. Don't lecture me about small business, I
:22:19. > :22:23.grew up in a small business. not lecturing, I'm telling you what
:22:23. > :22:29.happens. It nearly went under. Because of issues with banks, the
:22:29. > :22:37.importance of lend to go small business can't be overestimated.
:22:37. > :22:40.You doesn't improve the performance. You can't improve a performance of
:22:40. > :22:44.a bank by getting politicians directing where the money goes.
:22:44. > :22:47.are not directing where the money goes, but we own the bank, and we
:22:47. > :22:51.should be setting overall lending targets, and making them perform,
:22:52. > :22:58.that is what the Swedes do, the Swedish Finance Minister is very
:22:58. > :23:03.good at it, we are being very weak. The men and women who determine the
:23:03. > :23:07.fate of nations by how they gamble on currencies, smile their smiles,
:23:07. > :23:11.on the Chancellor of Germany today, she said Germany is willing to make
:23:11. > :23:14.yet more money available to the bailout fund to protect the euro.
:23:14. > :23:18.No other European figure can wield the power or command the attention
:23:18. > :23:21.in the way Angela Merkel does. It is perhaps because of that, that
:23:21. > :23:26.she gives interviews extremely rarely. But she has spoken to
:23:26. > :23:29.Newsnight. She's the daughter of a pastor, and first, we have been
:23:29. > :23:39.wondering whether the great religious divide in Europe may yet
:23:39. > :23:40.
:23:40. > :23:45.determine its future. Exactly 500 yiers ago, in Wittenberg, a --
:23:45. > :23:51.years ago, in Wittenberg, one of Europe's leading thinkers was
:23:51. > :23:56.growing increasingly alarmed. Hard working German tax-payers were
:23:57. > :24:01.being fleeceed of their cash. It went to pay for a vain, glorious
:24:01. > :24:06.European project in southern Europe, run by foreigners far away. And
:24:06. > :24:12.many Germans decided, probably being wasted. That man was Martin
:24:12. > :24:17.Luther, who 500 years ago, famously nailed his 95 thesis, rebelling
:24:17. > :24:21.against the Pope, on that door in the church in Wittenberg. He
:24:21. > :24:25.brought about the reformation, which not only shrook Germany to
:24:25. > :24:30.its foundations, but the whole -- shook Germany to its foundations
:24:30. > :24:33.but the whole of Europe. Luther in his heart wanted to remain a good
:24:33. > :24:42.Catholic, but in his heart he thought the money was being wasted.
:24:42. > :24:46.When it came to an argument about economics or politic, economics won.
:24:46. > :24:53.So, does that remind you of anyone? The most powerful woman in the
:24:53. > :24:56.world, the first woman Chancellor of Germany is the daughter of a
:24:56. > :25:02.Lutheran paster, steeped in the Protestant values of thrift, hard
:25:02. > :25:08.work and behaving responsibly. One of the reasons why Angela Merkel
:25:08. > :25:11.remains personally popular in Germany, is for all her power, she
:25:11. > :25:17.remains like a housewife in Germany. That puts her economics at odds
:25:17. > :25:24.with her political desire to be a good European, like Luther.
:25:24. > :25:34.Nowadays, even if modern Germany is decided by Catholics, Lutheran, and
:25:34. > :25:35.
:25:35. > :25:44.others, even some atheists are Lutheran aitists, they don't
:25:44. > :25:48.believe in that form of God. The rooms beside Luthur's own house,
:25:48. > :25:53.his followers are the backbone of the economy. Hard working business
:25:53. > :25:58.people, teachers, professionals, sharing a similar east German
:25:58. > :26:05.background with Angela Merkel. Tonight rehearsing Luther's
:26:05. > :26:08.favourite hymn, A Strong Fortress Is Our God. Just like Chancellor
:26:08. > :26:15.Merkel, they believe in Christian charity towards others in need. But
:26:15. > :26:18.perhaps they can say what their Luthurian Chancellor cannot, that
:26:18. > :26:24.their patience with the financial mess in Europe is wearing thin.
:26:24. > :26:27.think they should have checked upon those countries before they joined
:26:27. > :26:32.the European community, of course we are a bit fed up at the moment.
:26:32. > :26:36.We have to watch the Greeks and the Spanish and other countries very
:26:36. > :26:42.closely. If somebody pays a bill, he should also set the rules. And
:26:42. > :26:50.others should follow. Which isn't happening now? No, but
:26:50. > :26:55.we should never give up hope. That's a very Luthurian thing to
:26:55. > :26:59.say! The core of Luthurianism was to question authority, then of the
:26:59. > :27:06.Pope, now, also, the German Government, and the management of
:27:06. > :27:11.the European currency. This is the living room, the only
:27:11. > :27:17.room originally preserved. Modern Wittenberg is so proud of its most
:27:17. > :27:23.famous rebel, they called themselves "Luthur's Town" and
:27:23. > :27:26.preserved his home as a museum. was one of the very few theologians
:27:26. > :27:30.deeply connected with every day life. With the question of a
:27:30. > :27:36.transfer of money to others, who can't help themselves, this only
:27:36. > :27:42.can happen if those people who get the gift really make efforts to
:27:42. > :27:47.change their own situation. So it is help to self-help, this is the
:27:47. > :27:53.core of Luther's social ethics. still today, it is something people
:27:53. > :27:56.would understand today in German right now? Exactly. The pianist and
:27:56. > :28:01.conductor, Daniel Barenboim, has lived and worked in German for the
:28:01. > :28:06.past 20 years, he's also one of the sharpest observers of German
:28:06. > :28:10.culture. One of the main pillars of German education, the families,
:28:10. > :28:16.they teach their children, I'm going to say it bluntly and
:28:16. > :28:21.insulting, I'm sorry, I don't mean it like this, it is not the value
:28:21. > :28:24.of generosity, but the value of saving. But it is not in their
:28:24. > :28:29.culture to teach the children that when they grow up and they are
:28:29. > :28:38.invited somewhere for dinner, that would be nice to bring flowers or
:28:38. > :28:41.chocolates as a gesture of being a good guest. I believe very much
:28:41. > :28:51.that political attitudes are result of the personal that people educate
:28:51. > :28:55.themselves, and their children. The modern German dilemma is this,
:28:56. > :28:59.Angela Merkel was born into a country destroyed by Hitler and
:28:59. > :29:03.divided by Stalin. The core of her politic is to be a good European
:29:04. > :29:08.and not make the same mistakes again. The core of her economics is
:29:08. > :29:12.pure Luther, it is Conservative and thrifty. That means her dilemma is
:29:12. > :29:19.when will ordinary Germans tire of throwing good German money into a
:29:19. > :29:22.European pit, for someone else to spend. Chancellor Merkel always
:29:22. > :29:28.reminds us, that for Germans, the European project is a political
:29:28. > :29:35.choice, therefore, it must not fail. Devout Catholics, including Martin
:29:36. > :29:39.Luther thought the same about the church of Rome, until the
:29:39. > :29:45.Reformation became unstoppable. The unthinkable is unthinkable until it
:29:45. > :29:49.happens. I caught up with Europe's most
:29:49. > :29:55.powerful politician in the German Chancellor in the centre of Berlin,
:29:55. > :29:58.a few minutes from the historic Reichstag. It was a very rare
:29:58. > :30:02.interview. Merkel's Christian Democrats are not very popular
:30:03. > :30:09.right now, but she herself is very much admired. She's seen as honest,
:30:09. > :30:14.low-key and pragmatic. She told me, in perfect English,
:30:14. > :30:20.that she would enjoy our small gift of British tea and biscuits, but
:30:20. > :30:28.she chose to be interviewed in German. I have been talking to many
:30:28. > :30:35.German people, including in lut -- Luther Town in Wittenberg. The one
:30:35. > :30:40.thing they all say is they are becoming more and more irritated,
:30:40. > :30:44.like Luther, raising money that is going far away and being spent by
:30:44. > :30:49.people they don't really trust. Do you share their irritation?
:30:49. > :30:52.TRANSLATION: No, I'm not irritated. We have to think carefully about
:30:52. > :30:56.how and where we spend money, how we shape our future. We are not
:30:56. > :31:02.making politics for the past, but for the way people live today, and
:31:02. > :31:09.how we wish them to live in future. We have to be very careful not to
:31:09. > :31:13.live beyond our means. Democracies all over the world have grown used
:31:13. > :31:16.to often spending more than they have in revenue. That is something
:31:17. > :31:22.no private household or family can afford to do long-term. In politics
:31:22. > :31:26.you must used the same principles that you employ at home. One of the
:31:26. > :31:30.things people also say, is they fear another bailout, and another
:31:30. > :31:33.bailout, and it won't just be Greece who wants a third bailout,
:31:33. > :31:39.but it will be another country, perhaps, it is endless. Can you say
:31:39. > :31:43.enough is enough, this is the end? TRANSLATION: That's not how it is
:31:43. > :31:48.going to happen. Because there has been a re-think going on in Europe
:31:48. > :31:51.for some time. Some countries accepted the rescue package, but
:31:51. > :31:56.they don't particularly relish it. They must follow conditions set out
:31:56. > :32:00.by the IMF, the ECB and the European Commission. What
:32:00. > :32:03.democratic Government wants to be in that situation for the duration.
:32:04. > :32:08.Over the past two years in Europe, particularly in the eurozone, we
:32:08. > :32:13.have learned a lot. We must reflect time and again why
:32:13. > :32:16.we are together in Europe. Why are we a community that displays
:32:16. > :32:22.solidarity and bears responsibility for the others.
:32:22. > :32:29.I look at the world as a whole. The world is different from the 1950s,
:32:29. > :32:38.we no longer have 2.5 billion people on this planet, with �500
:32:38. > :32:46.million Europeans, we have �7 billion and -- 7 seven billion
:32:46. > :32:50.people, and 5 -- five billion Europeans. The 7% share values of
:32:50. > :32:56.democracy, freedom of opinion, freedom of the press, freedom to
:32:56. > :32:59.travel, and freedom of faith and religion. Preserving freedom
:32:59. > :33:04.against those who think differently, is a good reason to get together
:33:04. > :33:09.and say, we want to stand up for these principles, this is what
:33:09. > :33:13.guides us in Europe. You are clear about your hopes for the future,
:33:13. > :33:18.yet some repeat the same old cliche of the past. I noticed recently
:33:18. > :33:23.some in Greece, the newspapers and so on, have been saying this is the
:33:23. > :33:28.German boot on our head, and going back to the stereotypes of the Nazi
:33:28. > :33:31.past. Is that not offensive to you and the German tax-payers who are
:33:32. > :33:38.paying for this? TRANSLATION: a very sense situation right now.
:33:38. > :33:42.Europe in particular, the euroarea is in crisis, it shritered into
:33:42. > :33:45.crisis as a consequence of the European financial crisis s and it
:33:45. > :33:49.has brought about very difficult discussions in many countries. The
:33:49. > :33:54.European discussion over the euro has become almost domestic policies.
:33:54. > :33:58.We debate harshly in our politic, and use tough words, that has
:33:58. > :34:01.character yoised Europe-wide debates too -- characterised
:34:01. > :34:08.Europe-wide debates, maybe it is something at the back of people's
:34:08. > :34:12.minds, luckily we have been able to solve our arguments peaceful low
:34:12. > :34:17.and turn each argument into an opportunity.
:34:17. > :34:23.I come from a federal country, where times northern Germans make
:34:23. > :34:27.remark about the Bavarians, or the Bavarians make remarks about the
:34:27. > :34:31.northern Germans. I'm tolerant, I think one ought to find solution
:34:31. > :34:41.about these problems, to talk about them and try to convince people.
:34:41. > :34:41.
:34:41. > :34:44.That is also our European task. When you use words like thriftyness,
:34:44. > :34:48.and savings measures, these are exactly what many people in Britain
:34:48. > :34:53.think is the right thing to do. But they tend to be euro-sceptics, they
:34:53. > :34:57.tend to think because of that, because they think you are right on,
:34:57. > :35:00.that the euro itself will, in the end, have to fall apart, because so
:35:00. > :35:10.many other countries don't believe it, including, perhaps, France in
:35:10. > :35:12.
:35:12. > :35:17.the future. TRANSLATION: Maybe some people in
:35:17. > :35:23.Britain have a few prejudices leftover, about which country can
:35:23. > :35:26.do what. The UK has a strict austerity drive, I think David
:35:26. > :35:30.Cameron was right to do that. It is something that each country in
:35:30. > :35:34.Europe can do, we will learn no country can live beyond its means.
:35:34. > :35:38.We have learned this from the global financial markets. Otherwise
:35:38. > :35:46.global investors decide not to have confidence. Once the markets lose
:35:46. > :35:49.confidence, we pay a heavy price. All European countries have
:35:49. > :35:53.understood this lesson, and have to pave the way for political
:35:54. > :35:58.decisions. In Britain there have been protests. Protests have
:35:58. > :36:06.started in other countries. But we in the eurozone are convinced that
:36:06. > :36:11.together we are much stronger. We get so much benefit from the
:36:11. > :36:15.common currency, that we want to respect the common rules set out in
:36:15. > :36:19.the fiscal pact, for example. you have a German vision for the
:36:19. > :36:24.future of Europe, in which Britain will play a bigger role than it is
:36:24. > :36:27.now, given it is almost politically impossible for Britain to envisage
:36:27. > :36:31.being part of the eurozone, that isn't going to happen. Where can
:36:31. > :36:37.Britain fit in better? Britain plays a very important role
:36:37. > :36:41.in Europe. The UK is part of the single market, and the common
:36:41. > :36:46.climate policy. Britain has a lot of common ground with Germany, on
:36:46. > :36:51.how we see the future of free global trade. We all benefit from T
:36:51. > :36:55.at the end of the day, the British have to decide for themselves to
:36:55. > :36:58.what extent they wish to be part of Europe.
:36:58. > :37:03.It is a discussion that we have seen, unfortunately, taking a
:37:03. > :37:07.painful turn on the fiscal pact. But Britain needs to know that we
:37:07. > :37:13.in Germany, want a strong Britain in the EU. We always have, and we
:37:13. > :37:16.always will. In Germany we try to see there is
:37:16. > :37:21.less red tape, more political decisions and more transparency. I
:37:21. > :37:25.think that we are at one on this with Britain.
:37:25. > :37:29.There are those who think, including some in Greece, that it
:37:29. > :37:33.would be almost kinder to let Greece go. Europe would sur rife
:37:34. > :37:37.and Greece would do better, and the prospect of pain in Greece and
:37:37. > :37:43.elsewhere can't be ruled out? Greece has to imand again explained
:37:43. > :37:48.it wants to remain in the euro. It has major weaknesses, but it is
:37:48. > :37:51.trying to overcome them, be they in the administration, or the
:37:51. > :37:58.competitiveness in their business community. It is going to be a long
:37:58. > :38:05.and arduous road. We have taken the decision to be in a currency union.
:38:05. > :38:08.This is not only a monetary decision, it is a political one.
:38:08. > :38:14.It would be catastrophic if we were to say to one of those who have
:38:14. > :38:18.decided to be with us, we no longer want you. Incidently, the treaties
:38:18. > :38:24.don't allow for that any way. People all over the world will ask
:38:24. > :38:26.who will be next. The euroarea would be incredibly weakened. The
:38:27. > :38:34.export nation, Germany in particularly, benefits from the
:38:34. > :38:38.euro, it would be a huge political mistake to allow Greece to leave.
:38:38. > :38:41.That is why we will be clear with groz, we will say, if you want to
:38:41. > :38:45.be -- Greece, we will say, if you want to be part of a common
:38:45. > :38:51.currency, you have to do your homework, but at the same time, we
:38:51. > :38:54.will always support you. Many British viewers see you as the most
:38:54. > :39:03.powerful politician in Europe, the most powerful woman perhaps in the
:39:03. > :39:06.world. They wonder are male leaders still sexist towards you and others
:39:06. > :39:09.women? No, I don't have that impression at all. It it is
:39:09. > :39:13.becoming more and more of a normal thing. We used to have many fewer
:39:13. > :39:18.women, but now we have a Danish Prime Minister, a Lithuanian
:39:18. > :39:23.President, and you in had Britain have had your own very good
:39:23. > :39:33.experience with a female Prime Minister in the past. Women in the
:39:33. > :39:33.
:39:33. > :39:38.past forged ahead and paveed the way for us. Should there be
:39:38. > :39:42.prejudices, many male colleagues don't feel those pred siss any more.
:39:42. > :39:48.-- prejudices any more. Chancellor, thank you very much.
:39:48. > :39:52.Bitte schoen. Bitte schoen. More from ganch in Germany later in
:39:52. > :40:00.the week, and -- Gavin in Germany later in the week.
:40:00. > :40:04.You can hardly move these days for people waving sheets of
:40:04. > :40:09.prescriptions for what is wrong with the press. Tomorrow the joint
:40:09. > :40:15.parliamentary inquiry delivers its diagnosis, how seriously anyone
:40:15. > :40:22.will take a committee, whose members range from the queen's
:40:22. > :40:26.worker and the MP who head butted someone in the Westminster's bar.
:40:26. > :40:31.Many people, including Hugh Grant, are worried self-regulation is here
:40:31. > :40:38.to say. Lord Hunt couldn't make it tonight,
:40:38. > :40:43.he does have some ideas. Recognise it? It is Fleet Street. For decades
:40:43. > :40:51.voluntary press orgss have existed, they claim, to maintain standards
:40:51. > :41:01.of ethics in Germany. Still the scandals come, can Fleet Street in
:41:01. > :41:02.
:41:02. > :41:08.2012 be trusted today carry out its Undeterred, Lord Hunt has unveiled
:41:08. > :41:11.his new system of self-regulation, for a revamped Press Complaints
:41:11. > :41:17.Commission. No statutory underpinning, in other words, no
:41:17. > :41:22.new law to enable judges to find papers for any deemed breaches.
:41:22. > :41:28.Instead, a new called enforcement compliance arm would be activated,
:41:28. > :41:32.if there was evidence of a serious breakdown in standards. The
:41:32. > :41:37.toughest measure would have a panel of experts investigate, and make
:41:37. > :41:40.any paper found guilty cover the cost of the investigator's time.
:41:40. > :41:44.Hunt wants to emphasise the importance of individual
:41:44. > :41:49.responsibility. With a named individual responsible for
:41:49. > :41:55.maintaining ethical standards in the paper. Hugh Grant is an
:41:55. > :42:01.international film star, best known for his appearances on Newsnight!
:42:01. > :42:05.And you are a Newsnight presenter best known for your performance in
:42:05. > :42:09.Bridget Jones Diary. You have spoken to Lord Hunt today about his
:42:09. > :42:13.wheeze, what do you think of it? think that Lord Hunt's heart is in
:42:13. > :42:19.the right place. It is the place where every heart should be. In his
:42:19. > :42:26.chest? He's a great defender of freedom of the press, rightly so.
:42:26. > :42:32.But I and my fellow campaigners, and I suppose, the victims that we
:42:32. > :42:37.represent, have grave problems with his notion of how you enforce this
:42:37. > :42:41.new regulatory system. He has with a system that would be done through
:42:41. > :42:47.contract law, rather than the dreaded statute. My legal friend
:42:47. > :42:52.friends, who know much more about this than -- my legal friends who
:42:52. > :42:56.know much more about this than me, are worried about doing that. It
:42:56. > :42:59.doesn't take care of the Desmond problem, why would they sign up to
:42:59. > :43:05.the contracts if they didn't want to. This is Richard Desmond, who
:43:05. > :43:10.owns the Daily Express, and doesn't belong to the PCC? He turned his
:43:10. > :43:16.back on it, and said he didn't care. I don't see how this system so was
:43:16. > :43:23.that problems. Equally, the legal friend don't really see what the
:43:23. > :43:27.big penalty is, for breach of contract. Hunt draws parallels
:43:27. > :43:30.between the clubs' relationship with the Premier League. If you
:43:30. > :43:33.breach your contract with the Premier League football team, you
:43:33. > :43:39.are out of the Premier League. It is a huge penalty. If you breach
:43:39. > :43:46.your contract under the Hunt system, you can't be thrown off. Nothing
:43:46. > :43:51.can really happen. If people are members of the PCC, and the PCC can
:43:51. > :43:58.decree that apologise are issued, where it deems them necessary.
:43:58. > :44:02.Where they are displayed, the prominence they are given, that
:44:02. > :44:08.restitution is given, it doesn't cost people to go and see it, what
:44:08. > :44:13.is wrong with that? Nothing, so long as the newspaper being
:44:13. > :44:17.admonished can't just stick its finger up and say OK. There is no
:44:17. > :44:23.real penalty for me. You are for the Government taking over control
:44:23. > :44:30.of the newspapers? I knew you were going to put it like that.S That
:44:30. > :44:37.the alternative? It is such an oversimplification, thinking it is
:44:37. > :44:41.Zimbabwe at one end and free-for- all at the other. You do want
:44:41. > :44:45.statutory regulation? The answer lies somewhere in the middle of the
:44:45. > :44:50.two screens. There is examples all over the world. The Irish have a
:44:50. > :44:54.mid-system that works quite well, it is statutory regulation with a
:44:54. > :44:58.light touch. Otherwise there really is no way you can enforce your
:44:58. > :45:03.system of regulation and code of ethics, that is proved over and
:45:03. > :45:08.over again. For 60 years self- regulation has failed five times.
:45:08. > :45:14.Supposing a newspaper acted in what was judged to be an improper
:45:15. > :45:22.fashion, what sanctionss can be applied under your ideal stratry
:45:22. > :45:26.information. Fines, but significant ones. Fines levied by whom? By the
:45:26. > :45:32.regulator. If there was a problem with the newspaper saying who are
:45:32. > :45:36.you. They could apply to a statutory backstop behind them,
:45:36. > :45:44.Ofcom or something similar, and say, no, this is now the law. You do
:45:44. > :45:48.have to comply with this. In an ideal world the press should
:45:48. > :45:52.be self-regulating. It is only looking at history and the
:45:52. > :45:59.continued failure of it, it has come to this. You wo regulate
:45:59. > :46:04.newspapers? It is light regulation. Magazines? Yep. Newspapers on-line,
:46:04. > :46:09.blogs, I don't think you get as far as blogs but newspapers on-line.
:46:09. > :46:12.What is the difference? There is an area to go what exactly is, I think
:46:12. > :46:17.when you look at a newspaper on- line, you know you are reading a
:46:17. > :46:22.newspaper. If you go to Huffington Post, you know you are reading a
:46:22. > :46:25.newspaper. If you go to a massive, well publicised blog that maybe
:46:25. > :46:30.needs regulating, but when it is small and can't influence people
:46:30. > :46:35.too much, it probably falls outside that line. I suppose you have
:46:35. > :46:41.millions following a Twitter stream? I think Twitter does now,
:46:41. > :46:47.as it does, fall within the civil law of libel, et cetera. I don't
:46:47. > :46:55.see there is any reason why that should fall outside that. But,
:46:55. > :47:00.liable of course, like all civil law is expensive. That is why you
:47:00. > :47:04.need a regulator. The same applies to Swithenbanker? Maybe you do
:47:04. > :47:10.regulate Twitter rb these are the problems that Levein is wrestling
:47:10. > :47:20.with now. I think he, much more importantly than the privacy
:47:20. > :47:21.
:47:21. > :47:30.committee that reports now is the one to listen to.
:47:30. > :47:40.The Darts legend Jackie willson -- jockey willson died this weekend.
:47:40. > :48:14.
:48:14. > :48:17.# I'm in heaven After some record-breaking March
:48:17. > :48:20.After some record-breaking March warmth across Scotland, the chill
:48:20. > :48:23.sets in tonight, cold start to the morning.
:48:23. > :48:30.That will clear by mid-morning, once again, barely a cloud in the
:48:30. > :48:36.sky for many of you. Temperatures rising accordingly, 22 across much
:48:36. > :48:43.of England. Compared to the chilly weekend it will feel warmer. Same
:48:43. > :48:47.across East Anglia, temperatures struggling to the low teens. 21-23.
:48:47. > :48:50.Warmth in South-West England, tempered by the fact there is a
:48:50. > :48:55.fresh, south-east breeze off the English Channel. The wind light
:48:55. > :48:59.through Wales. Another warm sunny one. The north kofs Northern
:48:59. > :49:09.Ireland best favoured for the highest temp -- coast of Northern
:49:09. > :49:26.
:49:26. > :49:31.Ireland, best favoured for the high Mist and fog, maybe parts of