18/05/2012 Newsnight


Is the Euro crisis the elephant in the room at the G8? What's life like in Greece? And government plans for parent classes - a bit nanny state? With Gasvin Esler.

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It started in Greece, it's heading for London, and it's definitely


going to cost a lot of money. Predictions of contagion follow a


possible Greek exit tonight, as the world's richest leaders gather at


Camp David, the top of the agenda, save the eurozone. They have been


sizing up the French President, as we come on air strikes he has been


meeting another new friend for cordial advice. They can't keep


kicking the can down the road, decisive about banks, Greece and


the firewall. This is in Britain's interest too. All eyes are on


Francois Hollande. But will the platform he's just been elected on


make agreement even harder. In Greece, with a political crisis


on top of a chronic economic crisis, what's it like to be running a


Greek town when the Runcies out. Lg TRANSLATION: We hope to get support


from central Government or the EU, if this doesn't happen the council


will collapse, and we will have to return to our old currency the


drachma, and we will be bankrupt. We will hear from Mohamed El-Erian


who runs one of the world's leading investment companies, and the views


from Germany, Greece and here at home. Away from the economy. What


sort of advice do you get here. Would you like the Government to


help you be a good parent. David Cameron thinks you might. Is this


almost literally the nanny state. Kirstie Allsop debates with the


Centre for Parenting Studies. Good evening, one of the reasons


American Presidents like taking foreigners to Camp David, is to


remove them from distractions, like playing to the media back home.


Tonight the leaders of the G8 are sequestered in the presidential


retreat in The Very Hungry Caterpillar mountain, surrounded by


trees and discussing the world economy. There are report that is


Angela Merkel called the Greece President suggesting he hold a


referendum on whether Greece is in or out of the euro, in parallel


with elections. This is disputed. Do we face a meltdown and more


economic chaos. Is Greece going to dominate the


talks? It will dominate the talks. There was a full agenda for the


meeting, they are not so frequent these get togethers of leading


industrial heads of state in Government. People tell me there


were issues like the Arab Spring, Iran's nuclear programme. Very


important for America should petrol reserves be released on to the


world market, to keep the prices down for the US elections. But,


they are all being asked about this Greek question, and in that sense,


it is an inconvenient franc. For Mr Cameron, this is his first --


factor. For Mr Cameron, that is his first chance to speak to Francois


Hollande. The agenda, it is said, was meant to be about making


friends. There is no conflict between austerity and growth, you


need a strong deficit reduction for growth. President Hollande believes


that, I believe that, I'm looking forward to meeting him. The French


plan looks at doing it faster than the British plan, I'm looking


forward to common agendas. Are they any closer on any agreement about


what to do about Greece? In one sense, some people are saying the


buzz is they don't have to be closer just yet. There will be


another important European meeting next week, in which they hope to


get a more coherent line about this growth versus austerity thing that


the Prime Minister was talking about there. They also, of course,


have to wait for the outcome of this next Greek election, before


they can say definitive things. They have got a bit of breathing


space. But there are interesting noises coming out. Mr Hollande, in


the Oval Office, with President Obama this evening, saying you know,


Greece mustn't come out of the euro, we must move towards them. Quite a


positive-sounding message from him. There of course we have the sense


over the last couple of days of people almost ganging up on the


Germans, to say, look, ease up here, give them more time, be creative in


your thinking, put some growth into the mixture. All with the aim,


obviously, of stimulating growth more widely, but also helping


Greece off the hook. This German line about, or line coming out of


Greece, that the Germans are saying please have a referendum of in or


out of Europe, in parallel with the parliamentary elections, that is


very interesting, isn't it. It is right at the heart of the Greek


dilemma? It is very interesting, but I have to tell you, we simply


don't know what happened. The Greek President's statement -- spokesman,


said this afternoon there had been a phone call with Angela Merkel,


she had suggested a referendum, in or out of the euro to be added to


the ballot paper. Almost instantly the Germans denied t the Greeks


have reacted with outrage saying it smacks of interference with their


affairs. It might be a neat political idea, but now it will be


more difficult than ever to get it into that election. Mohamed El-


Erian runs the global investment company, PIMCO, the world's largest


bond investors. He joined me from California a few moments ago. Mr


El-Erian, is Greece on its way out of the euro? The probability of


Greece exiting the euro is increasing every day. The reason


why it is increasing every day is because depositors are losing


confidence. There is a saying that says if you see a line outside a


bank, join it. And if your money isn't in that bank go, to another


bank and join the line there. What we are seeing is we are seeing that


the Greek depositors are worrying about the safety of their savings.


If they continue to worry like that, and pull their money out, then


Greece will be forced to exit. Right, so should we really worry


about contagion, or is this just a little economy, and we shouldn't


care? It is a little economy, but we should care. The reason why, is


there is neither mechanism or precedent for anybody exiting the


eurozone. Nobody is quite sure how it happens, and no-one is quite


sure what happens there after. So there is likely to be a lot of


uncertainty. People will naturally pull back from the market place.


People will get cautious, and that, in itself, will translate contagion.


The second issue is people will wonder who is next, if Greece goes.


And people will focus particularly on Portugal. So while a Greek exit


is becoming increasingly inevitable, it is also increasing --


increasingly inevitable that it will be messy. At the summit this


weekend, do you expect Obama, Hollande and Cameron, all to be


leaning very heavily on Merkel to do more, to stop Greece from


leaving? I suspect that the Americans will tell the European


counterparts what everybody is telling their European counterparts,


which is that you need to get ahead of the crisis not just catch up


with it, but ahead of it. I suspect we will hear all the right things,


including comments like they want Greece to remain in the eurozone.


So the narrative will be supportive. The problem is the narrative is not


sufficient it is not clear the Europeans are willing to do what is


sufficient, especially given how messy the politics have become in


Greece itself. Does that mean that in the case of Britain wrecks


should prepare for an even longer recession, and in the case of the


United States, you should prepare for your recovery being derailed


stkph Yes, this means it will be much more difficult for any


individual country to grow. When you lose your markets overseas, and


in particular when you lose your markets in the biggest economic


region in the world, it makes it that much tougher to grow, that


much tough Tory generate jobs and revenue for the budget. The


challenges that face countries like Britain and the US increases. The


good news is neither country is near a break point. This is not


tipping a country over a cliff, but rather making the recovery process


more difficult than it is already. Greece, of course, is currently


without an elected Government. New elections are scheduled for next


month. It is thought the far left opposed to the bail out package may


do well. Tim Whewell has been to the small Greek towns to find out


what life is like when the money runs out.


It is the town they boast that paid for the Parthenum, the silver


exported from the harbour, two-and- a-half millennia ago, filled the


coffers of nearby Athens. And the precious metal was mined here again


in the 1880s, when French engineers built this bridge to carry the ore


on to ships. But the mines are long closed. And this town, like the


rest of Greece, is running out of money. The Deputy Mayor helps run a


town where nearly one in three is unemployed.


At the end of the week, when hundreds of millions of euros were


withdrawn from Greek banks by nervous depositor, and Germany


warned there would be no more international bail out money,


unless Greece sticks to commitments to cut and cut again, he has to


work out how to pay the council's 360 staff. TRANSLATION: It's


dramatic, we only have money to cover two months worth of salaries.


After two months what will happen then? We hope to get support from


central Government or the EU. But if this doesn't happen, the council


will collapse. We will have to return to our old currency, the


drachma, we will be bankrupt. Shopping should have been the


town's salvation, after the local textile industry followed mining


into oblivion. Tourists, they hoped, would flock here, when the Metro


line was extended from Athens. But the Metro never came. This man has


seen sales in his shop decline by 30%, since the recession began to


bite, four or five years ago. TRANSLATION: It is very difficult,


people you have employed for many years are like a family. They are


not just employees. These people could be out on the street, and you


don't know what the future will hold for them. This is a town,


built on broken dreams. Not surprising, then, that people voted


overwhelmingly last week to punish the main parties. Opting instead


for the radicals, of right and left. And all the signs are, that they


will do the same thing again in the new elections next month.


A leap into the unknown, they feel, that can't be more dangerous than


the hopeless reality they know. The moat tro, nobody prefers this


place of business so they don't come here.


The local politician was once popular here, in this town, PASOK


came fifth, barely ahead of the far right. This man hopes the good


times will return to his party and his town.


If you bring the Metro here, there will be a revival, not only for the


region, but for the whole region. You are just kidding yourself, the


truth is, the Metro will never come, because the money isn't there?


believe the new Government will renegotiate the terms of the bail


out. Not to go out, to renegotiate, so with new terms, realistic terms,


and in the spot we are, we believe OK now we are in the bottom of the


sea, now the only thing is to drown or go up. The young people here say


they want the euro, but the immediate benefit of the EU to them


is less its currency than its jobs market. More and more are moving


abroad, or planning to. Like this young man, who trained as a captain


in Greece's most emblematic industry, shipping, but can't find


work here. We love our country, but we have to see hope in order to


stay here. Here there is no hope. The clouds over this once famous


port aren't lined with any silver now. Greece says Germany's


Chancellor Merkel has suggested Greeks hold a referendum on euro


membership, that is hotly denied in Berlin. In this town most refuse to


believe that Greece has to make the choice any way. But events Maysoon


prove them wrong. Here in the studio the nation's of


Europe are represented from Greece, we have The Nation's magazine,


Maria Margaronis, from Germany's Focus magazine, Imke Henkel, from


down the road, Fraser Nelson. Whatever you make of this


referendum idea, it goes to the idea heart of the dilemma for


Greece. You can't have it all, you can't be in the euro and not accept


the conditions for being in the euro? What people are hoping for


Greece, is this impossible dilemma will shift, with the election of


Hollande, the remarks made by President Obama yesterday, and the


general mood shifting from austerity, and the sense that this


is a crisis point. Either Greece will have to leave the euro, which


will be immensely costly, it was estimated at 225 billion euros, or


staying in, which will cost 65 billion euros, something will have


to give. There is a real sense that if we stick to our guns something


might change in Europe. And meaning in Germany, presumably?


Particularly in Germany. What is Merkel's strategy, is it we must


keep the euro at any cost, we are prisoners of our history, we have


to be good neighbours and this has to work? I think that is very much


the strategy. It really goes back to the euro being a political


project. Not an economic project. It is interesting, recently someone


from the Government said, we went into the euro, not to become rich,


but to live in peace and to live in safety. Which is a totally


different thing. That is really at the core of the problems we are


seeing today. We mentioned contradictions with Maria, but


there is conflict with Germany, it goes back to German history, not


rewarding bad behaviour and making sure people pay their taxes, that


is not going down well at home? is not, part of it is really the


political failure that the Germans were pitched against the Greeks.


And that we were told, we are the hard working really industrious


people, and the lazy Greeks and we have to pay for them. That is not


true. For example, if you look at the pension age, the average


pension age for Germans and Greeks is about the same. It is not as if


Greeks would go earlier. The problem for Greece is corruption


and elites. Germany did profit from the euro. It is a political failure


that at so point, and the politicians were clear enough


saying, we get something out of it, and that's why we have to pay.


Fraser, I wonder, listening to David Cameron today, there are


contradictions in his position, we must have eurobonds and centralised


fiscal authority, he sounds like they were ten years ago, we must


have this fiscal state, but we will not be in it? He reckons he knows a


solution for Europe, that you can have currency union without


political union, he thinks they should merge and France and Germany


cool their tax and cuts and spending. Britain is now offering


diagnosis on the continent, where once it wouldn't have done. His


problem, of course, David Cameron, is that pretty soon this will come


to head. I suspect that Greece will leave the EU, therefore it might be


up for renegotiation again. And he will have to come and work out what


relationship he wants with the rest of Europe. If this does go bang,


that is his opportunity to say it's time to stop giving advice to them,


and start saying what Britain wants out of this. Will it be for


ordinary Greek people a real humiliation to leave, or be kicked


out, however you phrase it, we failed some how to live up to the


expectations? I think at this point the humiliation has already been so


great. The humiliation of putting one this austerity being described,


movingly said, as the corrupt lazy ones who have caused the whole


European crisis. I think what leaving the euro will mean is more


a sense of political chaos, there is a great fear about it, it is are


we going to continue to be beaten up or are we going to jump off the


cliff. Which is a great choice! think for Greece too Europe was


very much a political project. It was about coming out of


dictatorship and becoming part of the community of nations. What we


have seen now is a political polarisation in Greece, that we


haven't seen since before the dictatorship. We are seeing neo-


fascist MPs for the first time in parliament. This is bad for the


German psyche too, presumptionably, you have Angela Merkel, this great


bully -- presumptionably, you have Angela Merkel telling us what to do.


If you have the Italian Government and what we prefer in France and


Greece, that is extremely bad for Germany's self-image? Absolutely.


It goes back to the creation of the euro as a political project. At the


foundations they thought they could force the political unity through


the economic unity. And now we have to pay dearly for it. The tragedy


is, quite the contrary, they are not living in peace, we are not


living safe, we have riots in Greece, we have the threat of


possible quite extreme Government in Greece. We don't know about


Spain. Spain is coming out, Spain was a dictatorship in the 1970s,


Portugal was. Europe now, all of a sudden, instead of coming to this


political unity, is instead on the brink of coming apart and being a


danger. Is that how you see it, in the sense that it could be Spain


next or Portugal next, as it was suggested, people will look for the


next weakest link. Once one can go from the unbreakable union, anybody


can go? Greece's economy is broadly about the size of the south-east of


England. It is not a big chunk in the europuzzle, if one country can


go and the drachma came back. It would be great for Greece, it would


plunge in value, and be competitive again. We would go there on holiday


next year. But it does set a precedent for Spain and the others,


if there is one, if an exit path is beaten by Greece, with what's to


stop the whole thing unravelling. Might end up basically with a


harder cue, which is what the Germans would have liked. Do you


accept the analysis that it is terrible for Britain, and it will


prolong the recession and deepen in it? I don't, there are no good


options in the eurocrisis. What is happening now is not good for


Britain. You are facing a continent with internal devaluation, that is


an agonising ten years of incredible austerity, that is not


good for us. Our main trading partner will be on its knees, not


just now, but the next ten years, there must be a quicker and better


way out. It is curious that Greece, the smallest economy, holds the


fate of all of us in its hands? This is a myth. We began with the


myth that the eurocrisis was caused by Greek corruption and laziness,


now we have the fate of the eurozone depending on the Greek


elections. It doesn't. There was not a single party on May 6th that


didn't demand some negotiations, some change in the austerity


programme. Including PASOK, the people who brought it in. They


asked for a year's extension. They knew snob would vote for them if


they said it would continue as before. The fate of the euro


depends on the European Commission decides, and the IMF and Angela


Merkel. Angela Merkel's ears must be burning in Camp David, she must


be under a lot of pressure? She's also under a lot of pressure at


home. The debate is definitely in Germany is switching towards more


growth. Even from her own Finance Minister. But I think there is


something moving something is giving already. You are quite right,


it is possible that Greece defaults and still stays in the euro and the


whole project goes on. The Fiscal Compact, with all its problems, is


the preparation for that to happen. It does actually prolong this


mistake of putting economics in front of politics.


You need lessons to drive car, why shouldn't you also need lessons to


be a parent. That was the gist of David Cameron's thoughts on the


Government helping pay for parenting lessons, to help solve,


not just problems within families, but in society more generally.


Is this almost literally the nanny state. Or a bit of original


thinking. Our political editor, Allegra Stratton report.


Happy families are supposed to be alike. Every unhappy family is


supposed to be unhappy in its own way. But happy or at each other's


throats, keeping home fires burning is no cinch. I often find, still


find, I have three, and the youngest is not yet two, I still


sometimes think I would love a bit more information about how to do


things sometimes. This one is for fans of counter


factual history, BC Dave, or before the financial crash, David Cameron,


is making a comeback, this week we have had family policy, and next


week we have NHS policy. The idea is to remind people of the soft


soak Prime Minister David Cameron might have been before the crash


and the cuts in the NHS, his adviser from earlier days, Steve


Hilton, today left for California. The Government is asserting that


his ideas didn't go with him. So, the Government has announced


�100 parenting voucher, to be picked up from boots, an on-line


information service for new parents. Advice by text message and e-mail


for those with babies under the age of one month. It is also looking at


bigger reforms to bring down the cost of childcare. Freeing up the


red tape on who can become a childminder, to allow more to enter


the market. And even the possibility it would allow parents


tax breaks on childcare. You couldn't have a better example of


the difficulties for Government of walking and chewing gum at the same


time. They have long wanted to talk less about the deficit strictly in


terms of cuts, and more about family issues, as families actually


experience them. This week they scheduled a speech on the family,


they jettisoned it, for what? A speech on the deficit. Nonetheless,


the Prime Minister was only momentarily knocked off his stride.


And this morning, before jet to go the G8, he went ahead with the


fresh push for families. The plan is not just to return to the early


ideas from top opposition, but early Cameron ideas. Back to the


period when the leader of the party polled so much better than the rest.


My wife and daughter are fast asleep, they may turn up at some


stage. Someone said I'm heading for the perfect storm, children and


moving house, and leadership of the Conservative Party.


Perfect storm or not, it was perfect optics for his political


strategists, that era was political gold. But while they may want to


recreate those atmospherics, some on his own side are troubled. They


believe the ideas floated today show too much money being spent,


straying too deeply into our private lives. Parenting is not,


they believe, something the state can teach you. There is also a


subtle shift. Where as in opposition, David Cameron's


emphasis on the fm family was about showing he was a modern man, but a


Conservative modern man. Now they are downplaying that, it is more an


economic an all sits, it is about the cost of living. If they could


offer childcare tax breaks to some women in work, that could target


swing voters. As Newsnight has said before, the next election will be


fought on the cost of living. the cost of everything, energy


bills, food, and childcare. That is the reason why childcare has moved


centre stage politically, and political parties jockeying for


different ways to bring down the cost to make it more flexible and


useful for people. Happy political parties are so rare it is difficult


to tell if they are alike. But unhappy mid-term parties are


definitely unhappy in their own way. In helping families towards some


peace of mind, this Government might be hoping a little joy rubs


off along the way. Kirstie Allsop is an ambassador for


the parenting charity, Home-Start, and we have head of the studies on


parents for the University of Kent. Why does David Cameron care so much


about this? Everybody cares who has children. Either you believe you


can learn to be a better parent, or you think we all sink and swim and


do it on ifpb stinct. He thinks you can learn to be a better parent.


And the state should pay for that? I think that if we accept that xaps


in the first years of your life is so -- what happens in the first


years of your life, is so key to the rest of your life, then yes,


the state should go involved to some extent in paying for that.


you think the state should pay, because it is important for all of


us and society? I fundamentally disagree with the thesis, at least


Kirsty has brought out into the open that the flip side to parent


training is parent blaming. The other side to all of this a very


long-term argument which stretches right back to the beginning of new


Labour. So it's not as if it was just yesterday that politicians


have started saying that parenting is too important and too difficult


to be left up to ordinary mums and dads. They have argued this for a


very long time, predicated on what I perceive and believe to be an


utterly dogmatic view, that what happens in the very early years of


life is utterly crucial, and determines the course of, not only


the lives of children, but how society generally turns out. Dose


doesn't it? I don't think social problems are caused by how long


women breast-feed for, how much tele they let their children watch.


I don't think children's brains are being shrunken by parents at home,


which on the front cover of coalition documents, there are


images of shrunken brains. It is a ridiculous thesis. I'm completely


with you on breast-feeding and television. That is not the issue.


There are a lot of families now who are feeling pretty desperate, they


are working longer hours, far more mothers working than before.


Parents who are living far closer, far further from their parents than


ever before. Society has changed enormously. Making childcare more


affordable would be one way of doing it? We used to parent in


groups. If somebody wasn't good at it, there was an aunt, a


grandmother and a sibling to step in. We didn't do it in the


extraordinarily lonely way we now do it. I think the loneliness is


created by the fetishisation of parenting. The more you communicate


to ordinary mums and dads the idea that essentially ordinary, every


day thoughts of ordinary every day people are just not good enough


when bringing up kids. And you need to talk to a professional. You have


a created a culture where you he is strange parents from mums and dads


and neighbours. You are not talking about professionals, they are


volunteer mums and dads. Who has trained them. It is a myth that


this is some how coming from below, it isn't? We know that you cannot,


if you didn't receive good parenting yourself, it is very


difficult to be a good parent. The things that you and I accept as


totally normal, lots of sleep, lots of routine. You know, good


understanding that no is a healthy word. Where do you learn that, did


you go to parenting classes? but I would love. It is only for


bad parent, not good parents like you? It is very dangerous, and I


think she as right, not to talk about bad or good parenting.


could have gone and paid for parenting lessons? I can't commit


with my work to a night a week. I have a parenting book in my bag.


I'm someone interested in being a parent. So there are bad parents


aren't there? It depends how you define for it. There are better and


worse parents, there always has been. One point I would like to


take up. You say this isn't about breast-feeding and how much tele


you watch, or for example about whether you shout at your children


or you don't. All the my nugsia, all the mundane things about how


ordinary mums and dads relate to their children have become


politicalIsed. They are not mundane. They are, we shouldn't


overcomplicate it, put it back in the box, it is not rocket science


to bring up kids. People who didn't have good parenting can't do it.


Who are they, who is this mass of the great unwashed useless parents


who you think are out there. don't think there is the great


unwashed. I'm someone who learns, every day I learn more, I look to


learn. So do all of us. People are crying out for these parenting


courses, people want to be. It is not very surprising, if you have


had now 15 years of relentless communication that parenting is


this incredibly complicated thing that you need a degree of child


development before being let loose on a kid. No wonder parents have


lost confidence. We need a word now on what is coming up on the review


show. What have you got? I hope it will be as lively. We


will be talking about a film already banned by one dictatorship,


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