:00:12. > :00:17.So, how do we get ourselves out of the doldrums. Today's answer came
:00:17. > :00:20.from a Tory donor, arguingp employers need to be able to hire
:00:20. > :00:24.and fire more easily. Rubbish said the other half of the coalition
:00:24. > :00:27.Government. We don't need to scare the wits out of workers with
:00:27. > :00:33.threats to dismiss them, it is completely the wrong approach.
:00:33. > :00:40.is the ghost of "I'm all right Jack", still at large. Could the
:00:40. > :00:44.economy be energised if we were all less secure. Is he in. I will see
:00:44. > :00:49.your union bogeyman, and raise awe free market economist.
:00:49. > :00:53.Meanwhile, could a bank run in Greece spread to your local branch.
:00:54. > :00:58.How at risk are the major banks of Europe. Later on. TRANSLATION:
:00:58. > :01:02.doctors in Iraq told me, if this operation in Iraq does not work out,
:01:02. > :01:08.I will have to have an amputation. Damaged in Iraq, mended in Jordan,
:01:08. > :01:14.the hospital where they try to put back together the shattered bodies
:01:14. > :01:18.of those who survived the violence. I sleep for one week before the
:01:18. > :01:25.amputation, and one week after amputation. Amputation for any
:01:25. > :01:35.surgeon is failure. We talk to one of the world's greatest sopranos,
:01:35. > :01:35.
:01:35. > :01:44.or rather we listen. # Falling in love with love
:01:44. > :01:47.# Is falling for make-believe. Britain has a deficit crisis, true,
:01:47. > :01:51.the only escape is economic growth, also true enough, but after that,
:01:51. > :01:54.the ideas laid out in a report for the Government, from a big Tory
:01:54. > :01:59.donor get a whole lot more controversial. So controversial,
:01:59. > :02:07.involving getting rid of all sorts of labour rights, that the Business
:02:07. > :02:11.Secretary, Vince "diplomacy Cable, delivered the verdict that they are
:02:11. > :02:17.complete nonsense. Will any of these plans that make hiring and
:02:18. > :02:21.firing easier see the light of day, and or important, should they?
:02:21. > :02:27.Here is Allegra Stratton. You can see why the Prime Minister
:02:27. > :02:31.might spend his down time on this, with one dab of the index finger
:02:31. > :02:37.you can slice through a juicy fruit, three in one go, you get more
:02:37. > :02:44.points. For his party it is not fruit, it is flexible leave,
:02:44. > :02:49.redundancy pay, and the juicyist of all, the ability to hire and fire.
:02:49. > :02:55.Their set text is this. A review by Tory donor and private equity
:02:55. > :03:00.businessman, Adrian Beecroft, it was published this afternoon. It
:03:00. > :03:10.made 17 proposal that is would allow firms to opt out of
:03:10. > :03:15.
:03:15. > :03:18.It was welcomed by those with experience running businesses.
:03:18. > :03:22.labour market has to be flexible. You see that particularly with
:03:22. > :03:26.employment law as well. What we want is a right to hire policy, we
:03:26. > :03:29.want companies to be taking people on, and unafraid of the
:03:29. > :03:32.consequences of taking people on. Small companies need flexibility.
:03:32. > :03:35.But employees needs their rights too. It is a question of getting
:03:35. > :03:38.the balance right. I think the Beecroft Report, published this
:03:38. > :03:43.week, is a very important step on the road to considering all the
:03:44. > :03:47.options. I think we should look at makes it as easy as possible for
:03:47. > :03:52.smaller companies to take on staff. These ideas, however, do not mix
:03:52. > :03:54.well in the coalition furnace, today sparks flew.
:03:54. > :04:00.The Business Secretary, conveniently visiting the
:04:00. > :04:05.sweltering steel works of Redcar, and so atired in flamable kit, went
:04:05. > :04:10.into battle with his intellectual foes. Most of it is pretty
:04:10. > :04:15.uncontroversial. There is one bit that has stirred up a lot of
:04:15. > :04:19.controversy, this no-fault dismissal, some describe it as a
:04:19. > :04:22.hire and fire system. I don't see a role for that. Britain has a
:04:23. > :04:26.flexible, co-operative labour force. That is what you see here in this
:04:26. > :04:30.steel plant, the work force have made a lot of this happen. Last
:04:30. > :04:36.week I was at Ellesmere Port, where we have got back General Motors
:04:36. > :04:40.investing in Vauxhall. One of the thing that attracted them is
:04:40. > :04:43.British workers being flexible. We don't need to scare the wits out of
:04:43. > :04:46.workers with threats to dismiss them, it is completely the wrong
:04:46. > :04:49.approach. This is about the differences between the coalition
:04:49. > :04:53.partners, it is as serious as it gets, for one it is an ap, the
:04:53. > :04:57.other it is a pear. They don't agree. You have Conservative people,
:04:57. > :05:02.including cabinet ministers, who think the reason the UK economy is
:05:03. > :05:06.sluggish, is because the labour market is shrer rottic. And the
:05:06. > :05:10.Liberal Democrats say there isn't a single shred of evidence that says
:05:10. > :05:13.it is the UK's economy. They have a wider point, they say capitalism is
:05:13. > :05:16.allowed to work because of regulation, it allows trust.
:05:16. > :05:23.No matter, Tory MPs said in the Commons today, as the Government
:05:23. > :05:29.fields questions in the chamber, Beecroft's lessons are legion.
:05:29. > :05:38.2005, Germany exempted businesses with fewer than ten workers from
:05:38. > :05:42.unfair dismissal regulations. They introduced a new catagory of mini
:05:42. > :05:48.and midi jobs, their unemployment figures have halved, what can we
:05:48. > :05:51.learn from Germany. The last survey in this area showed
:05:52. > :05:57.that we were lightly regulated, the third lightest after America and
:05:57. > :06:01.Canada. Germany is more regulated. Turkey, the most regulated, drew
:06:01. > :06:06.its economy. Circumstantial evidence, and studies carried out
:06:06. > :06:11.by a number of think-tanks, national and international, seem to
:06:11. > :06:17.put some of the best economic performances, such as Germany, and
:06:17. > :06:21.to some extent, France, on the more regulated end of the spectrum.
:06:21. > :06:28.of how Germany has deregulated? have to see these particular
:06:28. > :06:33.measures in the German context, which is the context of a highly-
:06:33. > :06:37.regulated, neo-corporate, industrialised economy. And labour
:06:37. > :06:40.lawyers, and comparative labour lawyers, are always warning against
:06:40. > :06:50.the simplicity of the argument, of suggesting legal transplants from
:06:50. > :06:50.
:06:50. > :06:55.one legal system to another. International Labour comparison is
:06:55. > :06:59.interesting, Denmark is highest in the world for ease of hiring and
:07:00. > :07:02.firing and redundancy costs. They have a system that is very good at
:07:02. > :07:07.getting people back into work when they are unemployed, they support
:07:07. > :07:10.them very well, and they have a highly-skilled work force. The
:07:11. > :07:14.lesson is, if we are going down this path, we have to look at it in
:07:14. > :07:17.the round, rather than focusing specifically on one element of
:07:17. > :07:20.deregulation, as a solution to getting people into work.
:07:20. > :07:24.Some within Government expect that there will be action on the
:07:24. > :07:26.Beecroft Report, as part of a great reckoning between the two parties
:07:26. > :07:30.that they have to do everything they can to get growth. The
:07:30. > :07:33.question will be, will it be in substantial areas, where previously
:07:33. > :07:37.there had been much disagreement, or whether it will be in those
:07:37. > :07:41.areas where actually they have already said they sort of agree, so
:07:41. > :07:44.the low-hanging fruit. There are some consultations out there, there
:07:44. > :07:48.are some things the Department of Business has already said it will
:07:48. > :07:51.implement. I understand that the Lib Dems
:07:51. > :07:54.could move towards the Tories on Beecroft's ideas, it would be
:07:54. > :08:00.limited to those affecting small businesses. Those employing fewer
:08:00. > :08:05.than five employees may be exempted from regulations. Lib Dems suggest
:08:05. > :08:08.they may exempt employee-owned, John Lewis-styled companies from
:08:08. > :08:11.regulation, in an attempt to increase that model in the economy.
:08:11. > :08:17.The Beecroft Report emerged having had hefty help from Downing Street
:08:17. > :08:19.and civil servants. One source joked, final version was version 27.
:08:19. > :08:24.Varnished or unvarnished, many think the Prime Minister does have
:08:24. > :08:33.to act in some way, and Lib Dems know it. Tory MPs think the
:08:33. > :08:40.Beecroft Report offers many fruits to be sliced, some in one swipe.
:08:40. > :08:47.We have Lord Oakeshott, and the Conservative MP Tominic Raab, the
:08:47. > :08:51.one-time economic adviser to George Bush, and head of an Asset
:08:51. > :08:54.Management company, Pippa Malmgren, and Labour Party economist, Davit
:08:54. > :08:59.Blanchflower. Where is the evidence that making
:08:59. > :09:02.it easier to hire and fire people actually promotes growth? There is
:09:02. > :09:09.actually a total of abundance of domestic and international evidence.
:09:09. > :09:13.The CBI did a report last year, a survey which found 77% of
:09:13. > :09:18.employiers said regulation was the major -- employers said regulation
:09:18. > :09:22.was a major threat to businesses. The World Economic Forum says we
:09:22. > :09:27.come 83rd on the league table for overregulating our businesses.
:09:27. > :09:31.These are statements of opinion, I'm asking for evidence? In the
:09:31. > :09:35.CBI's case it was a survey of employers. And they said something,
:09:35. > :09:42.they did not produce any evidence, isn't that correct? In that case,
:09:42. > :09:45.yes. But all of the business groups, all of the employee groups, are in
:09:45. > :09:47.unison saying we have a major problem in this country. It is not
:09:47. > :09:50.a silver bullet, there is finance and business taxes. But if you are
:09:50. > :09:53.a small business, with all the uncertainty around you, you are
:09:53. > :09:59.worried about taking that risk to hire someone, and someone in this
:09:59. > :10:02.debate has to stand up for the 22% youth unemployed. That is what we
:10:02. > :10:06.are doing, it is not standing up for the employers, but the
:10:06. > :10:11.unemployed. Have you seen evidence to support this contention, Davit
:10:11. > :10:15.Blanchflower? No. I listened to the commentator a moment ago, I looked
:10:15. > :10:18.at what Vince Cable said. He's quite right to say there is
:10:18. > :10:22.absolutely no evidence for this. There has been a huge literature in
:10:22. > :10:30.economic about the effects of regulation, and how it impacts
:10:30. > :10:34.unemployment. We see no co-relation whatsoever. A good thing to think
:10:34. > :10:37.about in the UK, we have seen incredibly flexible wages and hours,
:10:37. > :10:42.there is no credible evidence whatsoever to say that regulation
:10:42. > :10:48.in the UK is a major problem. In fact, if you go to the business
:10:48. > :10:53.department survey of 201, they said 7% of firms thought regulation was
:10:53. > :10:59.a problem, so I'm afraid there is no basic evidence to support the
:10:59. > :11:02.contention, at all. Lord Oakeshott, there is an apparent plausibilty to
:11:02. > :11:07.this argument. It seems to make a certain amount of sense, doesn't it,
:11:07. > :11:12.if you are Mr Beecroft, of course it makes sense. Yes. It is my turn
:11:12. > :11:18.now. You hang on a second blees, Davit Blanchflower, I want to bring
:11:18. > :11:23.in Lord Oakeshott. Can I say in my day job, not talking politics with,
:11:23. > :11:29.I'm a small businessman, and I run a small business with five people.
:11:29. > :11:36.I know a bit about it, and more than Adrian Beecroft, who has been
:11:36. > :11:40.an asset stripping executive. may employ five people? He doesn't
:11:40. > :11:43.employ them directly. If you ask small businesses and the Federation
:11:43. > :11:46.of Small Businesss what the biggest problem is, it is not whether they
:11:46. > :11:49.can sack workers, it is whether they can get the finance from the
:11:49. > :11:52.banks, particularly the Royal Bank of Scotland, to take the workers on
:11:52. > :11:57.in the first place. That is the biggest single problem. This
:11:57. > :12:00.Beecroft Report, it does have some good things in it. Taking the fruit
:12:00. > :12:06.analogy, there is decent apples in there, but two or three very bad
:12:06. > :12:09.ones. The things like putting off the compulsory fund pension
:12:09. > :12:14.contributions are being done, a lot is being done. What is not being
:12:14. > :12:19.done is to have a sack on the spot culture just at the time when there
:12:19. > :12:25.is no economic confidence. There is no chance, in your view, of the
:12:25. > :12:30.Government to bring in those regulations? Not the one that says
:12:30. > :12:34.sak-on-the-spot. In this country, we in this country do not believe
:12:35. > :12:38.that is a price worth paying, even if they might in America.
:12:38. > :12:41.Frightfully rude, I should have brought you in. I want to bring
:12:41. > :12:44.Dominic on the point that whether this Government will introduce this
:12:44. > :12:49.particular, do you think the Prime Minister is on your side, the
:12:49. > :12:52.particular point about making it easier to hire and fire? I'm not a
:12:52. > :12:58.psychologists, I'm a politician. You are asking me to guess what the
:12:58. > :13:01.Government will do, don't -- are asking me to guess what the
:13:01. > :13:05.Government will do. Don't you know what your leader
:13:05. > :13:09.will do? Does he agree with you? hope he does. You don't know?
:13:09. > :13:16.are having a consultation and we will find out. On the issue of
:13:16. > :13:19.firing on the spot. There are whole swathes of ways of doing this. We
:13:19. > :13:23.extended the period from one to two years, and I didn't hear Lord
:13:23. > :13:27.Oakeshott complaining then. I'm in favour of that. What we are arguing
:13:27. > :13:35.about is this one thing here which you Conservative right-wingers seem
:13:35. > :13:39.to be fixating on, which is the sack-on-the spot culture. You don't
:13:39. > :13:43.need to throw jibes. The one to two years has been done by the
:13:43. > :13:47.Department of Business. You support that. So for two years you are
:13:47. > :13:51.happy with sack-on-the spot. When you take someone on it is
:13:51. > :13:56.reasonable to have two years. The sensible parts of Beecroft are
:13:56. > :14:03.being done already, so why is there suddenly this great attack on Cable
:14:03. > :14:07.because they won't do the sack-on- the-spot thing. As you have
:14:07. > :14:10.accepted, most of it is completely uncontentious. This particular
:14:10. > :14:20.point is held by people like Tominic Raab and his friends to be
:14:20. > :14:23.abs you luetly key. Absolutely keen. It is a totem pole. What about the
:14:23. > :14:29.United States? Two-thirds of economies are generated by firms
:14:29. > :14:34.that employ fewer than 50 people. So if we want to create new jobs,
:14:34. > :14:38.it is only going to come from one place, that is from entrepeneurs
:14:38. > :14:42.who are taking risk. So far so uncontentious? If we talk about
:14:42. > :14:46.sacking on the spot, I want to be clear. The thing to cause people to
:14:46. > :14:50.be sacked on the spot is not regulation, but the debt problem
:14:50. > :14:52.that is bearing down on this country and the austerity. You
:14:52. > :14:55.can't project people from losing their jobs by having all this
:14:55. > :15:00.legislation in place. That is what we learned in the United States.
:15:00. > :15:05.The one thing you have to do is create new jobs. And that GDP
:15:05. > :15:10.construction can only occur if you have a risk-taker, the risk-taker
:15:10. > :15:14.needs to know if he or she puts his capital down, that they can
:15:14. > :15:21.manoeuvre who are my employees, what is the nature of the business,
:15:21. > :15:25.can I innovate fast. What we have to do in Britain is to innovate
:15:25. > :15:29.fast. We have that already. Look at this clart, you will be able to see
:15:29. > :15:34.it, -- This chart. You will be able to see, it was referred to in the
:15:34. > :15:41.piece. It is the OECD's assessment of employment protection in this
:15:41. > :15:47.country. You can't see it Davit Blanchflower, but you know the
:15:47. > :15:50.facts. I have it here. The UK is down there, why does that have
:15:50. > :15:53.anything whatsoever to do with economic performance? The point is,
:15:53. > :15:58.the debt problem in this country has created such a burden on growth,
:15:58. > :16:03.the point is how are you going to get growth going, you are not going
:16:03. > :16:13.to go through the state. Davit Blanchflower you are in the states.
:16:13. > :16:15.
:16:15. > :16:19.Putting your hand up, you can speak. Job protection, there is no
:16:19. > :16:23.question it is a problem. If you look at the World Bank's business
:16:23. > :16:27.ratings, the UK ranks 7th behind the US and Canada, same countries.
:16:27. > :16:32.There is no evidence whatsoever to say it is regulation, and actually,
:16:32. > :16:36.I agree that the big problem in the UK are two things, lack of demand
:16:36. > :16:40.and lack of access to finance to small firms. None of which are
:16:40. > :16:44.being dealt with. All of this stuff is just a way to scare workers,
:16:44. > :16:49.make them have an increased fear of unemployment, stop consuming,
:16:49. > :16:53.increase spending, lowering growth. I think this looks like a right-
:16:53. > :16:57.wing disaster. Can I say something nice about the
:16:57. > :17:01.stories, please. Hang you, you want to hear something nice, we don't
:17:01. > :17:05.want to hear that! Seriously, the point he's making, and the point
:17:05. > :17:09.about I'm already Jack, we have a totally different Labour market
:17:09. > :17:13.than 20 years ago. I pay tribute for Mrs Thatcher for cracking the
:17:13. > :17:17.strength of the unions, we have a free and flexible market. Look at
:17:17. > :17:23.Vauxhall, it is not a problem any more. I want to talk to Tominic
:17:23. > :17:26.Raab now, about this point that David Blanchflower -- Dominic Raab
:17:26. > :17:30.now, about this point that David Blanchflower made. If people fear
:17:30. > :17:34.for their jobs, they are not going to consume, and without consumption
:17:35. > :17:38.you don't get demand and therefore no growth? That may be true, but if
:17:38. > :17:45.they are languishing unemployed. is rather serious? There are a
:17:45. > :17:48.whole range of competing risks here, the big risk for us is we have 22%
:17:48. > :17:52.youth unemployed, 8% unemployed, I agree with the points about finance,
:17:52. > :17:55.we have told the banks we have introduced major reforms, we
:17:55. > :18:00.probably agree on most of those. We are telling the banks two different
:18:00. > :18:04.things at the moment. Our control over certain things, like finance,
:18:04. > :18:06.is wanting to stop bail outs happening again. One of the things
:18:07. > :18:11.we have total control about is the regulatory climate. The problem
:18:11. > :18:14.with the chart, it is four years old, if you look at what the IOD
:18:14. > :18:18.estimates for last year, they said the equivalent of the output of
:18:18. > :18:25.Singapore is what businesses lost in the regulatory burden. That is
:18:25. > :18:30.why if you look at other surveys. Anecdote. We are still well down
:18:30. > :18:34.towards the deregulated labour markets around the world.
:18:34. > :18:38.Please? Smaller companies need to face less regulation. You can
:18:38. > :18:41.choose what is the level of employees at which you want to have
:18:41. > :18:44.protection of employment begin, but that's not even the critical issue
:18:44. > :18:48.here. I think this is what the Beecroft Report isn't addressing.
:18:48. > :18:54.Is what is the bigger question of how to incentivise more risk-taking
:18:54. > :18:57.in the economy. That involves a question about tax policy,
:18:57. > :18:59.regulatory policy, frankly, monetary policy and what purpose it
:18:59. > :19:02.service in the current environment. The point is, this country needs to
:19:02. > :19:07.have a massive debate, about the relative balance between these
:19:07. > :19:11.different things. All with a view to incentivising more risk-taking.
:19:11. > :19:14.I agree with, that we need more investment and more confidence and
:19:14. > :19:19.more growth, at the moment it is not working.
:19:19. > :19:23.Thank you. The dealers who make-or- break currencies, were willing to
:19:23. > :19:26.pay a little more to buy euros, it was a reflection of the weekend
:19:27. > :19:30.comments by leaders that Greece will stay in the euro. Easier said
:19:30. > :19:34.than done, perhaps what may determine the fate of the euro, and
:19:34. > :19:37.of many European economies, is much less words of politicians, than the
:19:38. > :19:42.actions of their citizens. Specifically whether they are
:19:42. > :19:46.willing to leave their money in the banks, and whether those banks are
:19:46. > :19:51.themselves judged safe. Paul Mason, our Economics Editor,
:19:51. > :19:55.is here, before you talk about that. It didn't seem to me to achieve
:19:55. > :19:59.very much that gathering in America. That is clear, the news is, nothing
:19:59. > :20:03.happened in the weekend. The G8 leaders don't get together often.
:20:03. > :20:06.It was an opportunity. What we can say is the battle lines inside the
:20:06. > :20:10.powerful nations were drawn more clearly in the sense that Germany
:20:10. > :20:19.is a bit more isolated in its insistence that there has to be a
:20:19. > :20:23.lot of austerity in Europe. The growth wing strengthened its hand.
:20:23. > :20:27.The good news today is no bank run in Greece and Spain. Towards the
:20:27. > :20:32.end of the week people in the markets were pretty wordied that
:20:32. > :20:36.people would pull their money out of the banks. What passes for good
:20:36. > :20:43.news today is there is not a run on the bank? That is not just because
:20:43. > :20:45.we don't like to see queues outside banks or 1930s-style scenes. It is
:20:45. > :20:49.very difficult to understand at the moment what is holding Europe
:20:49. > :20:53.together. Europe has a sovereign debt problem. The European banks
:20:53. > :20:56.are currently buying the debt of countries, because the European
:20:56. > :21:01.banks have been given money by the European Central Bank. If there is
:21:01. > :21:04.a bank run, that is not just a bad thing for Greece, where the most
:21:04. > :21:08.likely candidate it is for it to happen. A bank run, for reasons I
:21:08. > :21:14.will explain in a minute, can take apart the very mechanism that
:21:15. > :21:18.allows the money to flow through banks to state. The whole situation
:21:18. > :21:24.being created could come tumbling down if we got one queue outside a
:21:24. > :21:29.big bank in Athens. It is technical, but here is why.
:21:29. > :21:34.Eurozone banks send money to each other through a system known as
:21:34. > :21:37.Target 2, it is a payment system, not a lending system. All
:21:37. > :21:43.transactions take place within the European Central Bank, not direct
:21:43. > :21:47.between a Greek bank and a Germany bank, say. Here is the problem,
:21:48. > :21:52.with the Greek banks in droubl, they can only operate in this
:21:52. > :21:57.system because the ECB is letting them draw money they don't have. It
:21:57. > :22:02.is auld emergency liquidity assistance, ELA, it is a lifeline
:22:02. > :22:08.the European Central Bank has to vote for, twice a week. Last week
:22:08. > :22:11.it was raised ten billion, to 100 billion euros. If a real bank run
:22:11. > :22:19.begins in Greece, independent of who wins the election, that
:22:19. > :22:22.lifeline could be shut down. It did seem quite clear, pleasingly
:22:22. > :22:31.clear. There is a European meeting later this week? It is a dinner of
:22:31. > :22:36.the heads of state, convened by your favoured man in Europe, Mr Van
:22:36. > :22:42.Rompey. There is fun already happened there is two-and-a-half
:22:42. > :22:46.pages of detail before the immortal statement, "before the end of
:22:46. > :22:49.dinner, I propose we talk about recent developments in the
:22:49. > :22:52.eurozone". It is a kind of acceptance that at the big
:22:52. > :22:57.diplomatic evidence there is not much more action until the Greek
:22:57. > :23:02.election on the 17th of June. And while Greece is a ticking detonator,
:23:02. > :23:05.ready to go, what people are then worried about is what it sets off.
:23:06. > :23:10.Because while Greece is, we have discussed again and again the Greek
:23:10. > :23:14.problem, the banks are effectively bust, they are on life support from
:23:14. > :23:19.the European system. It is what happens if the Spanish banking
:23:19. > :23:24.system is in some way ignited by that detonator. What you don't want
:23:24. > :23:28.is to have an unstable political situation in Greece, where a
:23:28. > :23:33.trigger is either through the bank run system, or simply by the idea
:23:33. > :23:38.that the Greek also not carry out the austerity moves, that the
:23:38. > :23:42.crisis comes in Greece at a point when the Spanish banking system is
:23:42. > :23:46.not stablised. They are trying to stablise the Spanish banking system
:23:46. > :23:50.and want to give the Spanish banks 100 billion. Now we have the
:23:50. > :23:53.problem we always run into, the Spanish bank doesn't want to be
:23:53. > :23:57.bailed out at the moment. That is where we are, by Wednesday night we
:23:57. > :24:01.might be is somewhere else, or by the time coffee and the canapes
:24:01. > :24:08.come out, I'm not sure. Two people who know a thing or two about banks
:24:08. > :24:15.in trouble, are Gillian Tetting, managingedor of the Financial Times
:24:15. > :24:21.in -- managing director of the Financial Times in America.
:24:21. > :24:29.-- Gillian Tett. Are we there yet? The ECB has
:24:29. > :24:33.propped up the banking system to an extraordinary degree, which is good
:24:33. > :24:37.news, but the key challenges are very serious. The question is, what
:24:37. > :24:42.are they doing behind the scenes to prepare for the worst case. People
:24:42. > :24:46.behind the scenes should watch are they supporting the bond system,
:24:46. > :24:50.will they create an insurance scheme for the entire eurozone, and
:24:50. > :24:54.just how much more can the ECB do. We hope to explore some of those,
:24:54. > :24:58.what is your view of whether there will be a run on the banks?
:24:58. > :25:02.tricky parts is in terms of how Greece will be managed, is manage
:25:02. > :25:06.the cross-border exposures, the extent to which banks are indebted
:25:06. > :25:10.to banks across the border has to be covered. That is the big
:25:10. > :25:15.question. How is it covered, by what Gillian was talking about?
:25:15. > :25:18.There has been experience of this, in the 1980s in Latin America, you
:25:18. > :25:22.had a big crisis of the banks potentially collapsing and the
:25:22. > :25:31.currencies collapsing. It was covered, in effect, in a system
:25:31. > :25:34.known as Brady Bonds, US dollars security, an analogy could be the
:25:34. > :25:39.eurobonds. What is happening now? If they have any sense, they will
:25:39. > :25:43.be working out how that eurobond- type cover can work to stablies
:25:43. > :25:46.those currencies, if there is any risk in that cross-border exposure,
:25:46. > :25:49.between the banks transferring. That's the defence mechanism that
:25:49. > :25:52.needs to be put in place at this point in time in Europe. You have
:25:52. > :25:57.spoken to a lot of these people at the European Central Bank, haven't
:25:57. > :26:02.you? I have recently, yes. Is that what they are doing? They are
:26:02. > :26:06.certainly looking at just how many extraordinary weapons they can pull
:26:06. > :26:10.out of the Arsenal and fire. Over the last year or so they have
:26:10. > :26:17.already surprised people by -- arsenal and fire. Over the last
:26:17. > :26:24.year they have already surprised people by old actions with the LTRO.
:26:24. > :26:28.What is that? Long-term retail operations, the ECB could be
:26:28. > :26:32.fatastically bold if it wanted. We have an article from the Polish
:26:32. > :26:37.Finance Minister today, alling for unlimited purchases of the eurozone
:26:37. > :26:42.bonds by the ECB. That is a very big step for the Germans to stand
:26:42. > :26:47.up to. The Germans are against all that? They have been very cautious
:26:47. > :26:52.up to now. Germany has to recognise, to some extent and to a large
:26:52. > :26:56.extent, it hasn't been explained to the German voter, but the German
:26:56. > :27:00.economy is being largely subsidised by keeping its exports competitive
:27:00. > :27:07.by the other countries in the eurozone. If these countries are at
:27:07. > :27:10.risk, the danger is that the German currency s or the eurobit of that,
:27:10. > :27:16.deflates rapidly making Germany uncompetitive. Germany has had a
:27:16. > :27:20.boom, because of the high level of stability in German employment, in
:27:20. > :27:24.marked contrast to what we were hearing, it has meant the German
:27:24. > :27:27.consumer is not worried about losing their jobs and is spending
:27:27. > :27:34.more. If there is the sort of banking
:27:34. > :27:39.crisis that we are thinking about, what happens to banks in this
:27:39. > :27:44.country? I think this is very much almost a third order, if you like,
:27:44. > :27:49.the second order was the contagion alluded to in terms of Spain and
:27:49. > :27:56.Italy, the third order is the UK, which has less exposure to
:27:56. > :28:01.continental European banks. What about Santander, which took over
:28:01. > :28:05.Abbey National? Santander UK is isolated, it can't pay a dividend
:28:05. > :28:09.to the Spanish parent unless the FSA approves that. If you had money
:28:09. > :28:14.in santand der you would loaf it there? It is pretty safe. The only
:28:14. > :28:17.downside to it, is you can'tness -- the bank can't get capital out of
:28:17. > :28:22.the parent in Spain to support itself, in a way another bank may
:28:22. > :28:26.be able to. The rest of that is very safe. I support Ian's point
:28:26. > :28:31.and pick up on something he said earlier. The good news about the UK
:28:31. > :28:34.system is people have got deposits in UK banks do know there is an
:28:34. > :28:39.insurance scheme in place, they know who stands behind it. One of
:28:39. > :28:43.the big problems in the eurozone is there isn't a common insurance
:28:43. > :28:46.scheme for the entire area. If you are a Greek depositor, you don't
:28:46. > :28:49.know who is backing it, at the end of the day. When it is said the
:28:49. > :28:53.issue right now is the cross-border balances being covered, what is
:28:53. > :28:57.happening in the financial system now is you are seeing fracturing in
:28:57. > :29:02.terms of how banks actually order their businesses, that is
:29:02. > :29:05.incredibly important. If you were a Greek with funds on deposit in a
:29:05. > :29:08.Greek bank, surely you could move it to a German bank? That is why we
:29:08. > :29:11.have money moving out of Greece right now. The legality of this
:29:11. > :29:15.protection scheme, and the question of who is responsible for whom, it
:29:15. > :29:19.is simply not defined right now. What you have already is many banks,
:29:19. > :29:25.as Ian knows, essentially saying, if I'm lending money to Italian
:29:25. > :29:28.companies, I want to make sure I'm electing -- collecting money from
:29:28. > :29:34.Italian depositors to match them up. If you go back to two or three
:29:34. > :29:38.years, everyone thought it was a common euromush, they were treating
:29:38. > :29:43.it like a single currency area, the banks are don't that any more.
:29:43. > :29:48.is to cover the cross-border exposure, if a bank is borrowing
:29:48. > :29:52.across country borders, there is an insulation in the banks for the
:29:52. > :29:56.cross-border exposure. That is, in effect, what the ECB has to put in
:29:56. > :29:59.place to keep it going, that is the called firewall protection they are
:29:59. > :30:03.working on. Time for something positive, it is
:30:03. > :30:06.a pretty rare commodity in coverage of the Middle East, where frontline
:30:06. > :30:11.journalism focuses on bombs, shootings, torture and suffering.
:30:11. > :30:15.For every person who dies in a bomb explosion, many others are wounded,
:30:15. > :30:20.often serious lo. There is a remarkable hospital in the
:30:20. > :30:23.Jordanian capital, Amman, which offers to repair those victims. It
:30:23. > :30:33.has began caring for patients from Iraq, and now patients come from
:30:33. > :30:43.all over. All the patients have something in
:30:43. > :30:43.
:30:43. > :30:53.common. They have been terrorised, by explosions, by bullets, by
:30:53. > :31:07.
:31:07. > :31:11.catastrophy. I admire my patients. They are great, they are strong.
:31:11. > :31:16.have come to Jordan to meet the faces behind the statistics. Tucked
:31:16. > :31:20.away in a suburb of Amman, the forgotten victims of violence in
:31:20. > :31:28.the Middle East. Is survivors of unimaginable horrors.
:31:28. > :31:38.Here, doctors are reconstructing their broken bodies. And helping
:31:38. > :31:41.
:31:41. > :31:46.them rebuild their lives. When we get a result, it makes you feel
:31:46. > :31:52.good, really good. Dr Majd el-Rass, is a Syrian surgeon, preparing to
:31:52. > :31:59.operate on a young Iraqi girl, injured in a bomb. When I see these
:31:59. > :32:07.patients, I feel I'm not having enough, I should give more. They
:32:07. > :32:12.need more. They are suffering, they didn't do anything bad to suffer,
:32:13. > :32:18.they are here asking us to help them.
:32:18. > :32:21.Waiting anxiously is this girl. An explosion outside her home in
:32:21. > :32:27.Baghdad last September killed her brother, and shattered her leg. She
:32:27. > :32:31.hasn't been able to walk or go to school since then. TRANSLATION:
:32:31. > :32:35.doctors in Iraq told me, if they operation doesn't work out, I will
:32:35. > :32:45.have to have an amputation. That's why I'm scared. Since the moment I
:32:45. > :32:45.
:32:45. > :32:50.arrived in Jordan, I have been nervous. This is the first stage of
:32:50. > :32:57.surgery. She will need a lot, at least three or four. We hope, after
:32:57. > :33:02.that, she will walk. But there is always a risk. There is a risk of
:33:02. > :33:06.amputation, always. By the time they get here, the
:33:06. > :33:10.patients are all extremely complicated medical cases. And over
:33:10. > :33:20.many months and years they face multiple gruelling surguries. But
:33:20. > :33:20.
:33:20. > :33:28.the care they get here is so u Neil Kinnock there is -- surgeries, but
:33:28. > :33:35.the care they get here is so unique, there is a huge waiting list. Set
:33:35. > :33:40.up in to deal with the patients of conflict in Iraq, it was a
:33:40. > :33:47.temporary unit. But with increasing conflicts, the hospital had to
:33:47. > :33:51.expand, with an increase in 46%. It has taken in patients from Libya,
:33:51. > :33:55.Yemen, Iraq and Syria, and Egyptians. Amongst the Syrians,
:33:55. > :33:58.desperate to keep in touch with news from home, there is a special
:33:58. > :34:08.camaraderie. Almost all are afraid to be identified, because of
:34:08. > :34:09.
:34:09. > :34:13.concerns for relatives left behind. Not Abu Hassan, he managed to get
:34:13. > :34:17.both himself and his family out. A woodcutter from Deraa, he says he
:34:17. > :34:24.was politicised when he saw the Al- Assad's response to peaceful
:34:24. > :34:28.demonstrations on the streets. He began to mobilise young
:34:28. > :34:38.protestors, and witnessed and filmed, as demonstrators were
:34:38. > :34:38.
:34:38. > :34:42.gunned down. Soon he was rounded up, interrogated and tortured.
:34:42. > :34:47.TRANSLATION: I was handcuffed and blindfolded, and the interrogator
:34:47. > :34:51.told me he would bring Syrian television in, and I must tell them
:34:51. > :34:55.I smuggled weapons from abroad, and I regreted it. I said I cannot do
:34:55. > :35:00.that. He said he knew how to make me confess, then he put burning
:35:00. > :35:05.coals on my feet, and poured a kettle of boiling water over my
:35:05. > :35:15.legs. But he knows he's lucky, only Syria's walking wounded are making
:35:15. > :35:21.
:35:21. > :35:26.it here. Saed had to be operated on three times, but in the end the 27-
:35:26. > :35:31.year-old's leg had to be amputated. He says he was shot while helping
:35:31. > :35:37.wounded protestors, shot by snipers. He hid, sleepless with pain on a
:35:37. > :35:41.farm for seven months, before being smuggled here for treatment. Today
:35:41. > :35:45.the doctor is preparing Saed's stump for a prothesis. I can't
:35:45. > :35:51.sleep for one week before an amputation, and one week after the
:35:51. > :35:56.amputation. Amputation for me, or for any surgeon is like failure.
:35:56. > :36:06.It is like a failure. But times it is the saving measure, the saving
:36:06. > :36:06.
:36:06. > :36:15.of life sometimes. For months on end, this hotel is a
:36:15. > :36:24.home from home for the patients. Some will have to return year after
:36:24. > :36:31.year. Amid the pain, hope and expectation. But most of all, this
:36:31. > :36:36.is a place of waiting, and for many, progress is slow.
:36:36. > :36:41.This boy was six years old when a bomb went off at a family funeral
:36:41. > :36:46.in Baghdad. He lost several relatives, as well as his left leg,
:36:47. > :36:52.left eye, and half of his face. Already he's had 25 operations. To
:36:52. > :36:56.help rebuild his mouth, muscle was transferred from his back.
:36:56. > :37:00.Complicated surgery rarely perform anywhere else in the world.
:37:00. > :37:03.One in ten of the project's patients at the moment are children.
:37:03. > :37:08.And in room 502, they have just opened a makeshift school. The
:37:08. > :37:13.teacher told us the children are so keen, that they pile into class the
:37:13. > :37:16.moment she arrives at the hotel. Most of them now are Iraqis, but
:37:16. > :37:20.MSF is readying itself for an influx from Miria in the months
:37:21. > :37:26.ahead. What strikes you most about these
:37:26. > :37:30.children is the complete absence of self-pity. This 12-year-old is from
:37:30. > :37:37.Fallujah. TRANSLATION: I have been here for a
:37:37. > :37:42.year. This bit of my face used to be like the other side. I have had
:37:42. > :37:52.two operations so far. How is it being here, is it difficult to be
:37:52. > :37:57.
:37:57. > :38:04.away from home? It's good? In what way? You like the weather. You like
:38:04. > :38:09.the calm and the fact that there are no explosions. Hussein is
:38:09. > :38:19.waiting for a third skin graft. He showed me how he was burned in a
:38:19. > :38:34.
:38:34. > :38:38.bomb. He says it hurts, but only at night. The patients living behind
:38:38. > :38:43.these doors all have very visible injuries, but hidden away is the
:38:43. > :38:47.mental pain, of men who have been rejected for work because of their
:38:47. > :38:51.disfigurement. Of women so badly maimed they have been divorced by
:38:51. > :38:54.their husbands, and children, ostracised at school because of
:38:54. > :39:00.their disfigurement. And the psychological wounds are extremely
:39:00. > :39:04.hard to treat. This man's deepest wounds cannot be
:39:04. > :39:09.seen. On day out with his family, the young Yemeny's car was hit by a
:39:09. > :39:12.rocket, killing his wife and two- year-old son, in front of him.
:39:12. > :39:22.Tomorrow he will have complex surgery to transplant a bone from
:39:22. > :39:28.his leg to his arm, and staff are anxious about him. He has attempted
:39:28. > :39:34.suicide three times. TRANSLATION: Since it happened I have known no
:39:34. > :39:38.peace, none at all, I'm in constant pain. I had four operations in
:39:38. > :39:44.Yemen, each one made things worse. Here I love the doctors, they are
:39:44. > :39:49.like a family to me, anything we need, they give us.
:39:49. > :39:53.It is Wednesday afternoon, and they have opened up the hotel ballroom.
:39:53. > :40:01.Every few months staff put on a special party for the patients, to
:40:01. > :40:05.try to lift their spirits. Time to keep a close eye, this woman is
:40:05. > :40:12.responsible for the patients psychological welfare. Do you worry
:40:12. > :40:20.about their physical or mental injuries more? The mental injury,
:40:20. > :40:28.the physical will be treated. It is the last day of the week, and
:40:28. > :40:33.the doctor has patients to check up on. Three days after surgery,
:40:33. > :40:38.wassan is recovering slowly. Her mother is concerned that she
:40:38. > :40:43.has lost weight. That is her on the left, taken before the explosion. A
:40:43. > :40:51.young women now reduced by her injury to childlike dependency. But
:40:51. > :40:55.all are relieved that the first operation has gone to plan. Saed is
:40:55. > :41:01.busy rebuilding his strength. As soon as he gets his new leg and can
:41:01. > :41:05.walk on it, he has told me he's going straight back to Syria. The
:41:05. > :41:13.doctor is gathering his strength for a new influx of patients.
:41:13. > :41:17.hardest part is to see the patient on arrival. When he arrives to me,
:41:17. > :41:21.especially children. I have my habit, when I see a child with a
:41:21. > :41:26.fracture of the limbs o a problem with the limbs, when they arrive to
:41:26. > :41:36.me, I say you will walk for me on both limbs, with a football, I will
:41:36. > :41:40.
:41:40. > :41:45.bring the football. If you didn't exist or this
:41:45. > :41:55.hospital didn't exist, what would happen to them? It would be
:41:55. > :41:56.
:41:56. > :42:03.catastrophic for them. Catastrophic. Now, one of the greatest voices in
:42:03. > :42:06.the world was heard in London earlier this evening, Jessie Norman,
:42:06. > :42:13.the great American soprano, gave her first concert in a decade on
:42:13. > :42:18.the South Bank. A programme from Gershwin and Bernstein, to Rodgers
:42:18. > :42:28.and Hammerstein. She rarely gives interviews, but she has given one
:42:28. > :42:33.
:42:33. > :42:38.to Steve Smith. Jessye Norman is a diva, in a good
:42:38. > :42:41.way, and husband been one for 40 years, if you think she has a great
:42:41. > :42:47.voice, you are quite wrong, unusually she has three great
:42:47. > :42:54.voices. I have the great privilege of
:42:54. > :42:57.having a lot of low notes, a very strong middle voice, and high notes
:42:57. > :43:00.as well. Do you ever ring people up in different voices on the phone
:43:01. > :43:04.and catch them out, does that work? I have never tried it. Most people
:43:04. > :43:14.recognise me on the phone, I don't think I would get away with it at
:43:14. > :43:19.
:43:19. > :43:23.all, I hadn't thought of it. Miss Norman was born and raised in
:43:23. > :43:27.what is then the segregated south of the United States. Long before
:43:27. > :43:33.she performed the classical repertoire, other styles claimed
:43:34. > :43:39.her. Growing up I listened to a great deal of gospel music. I love
:43:39. > :43:47.jazz, I love singing the American song book, these things that I will
:43:47. > :43:51.be singing. Cole Porter a Gershwin? Rodgers and hammer stein, Gershwin.
:43:52. > :43:57.This is all beautiful music s I love it T I want other people who
:43:57. > :44:02.are stuck, as it were, in what we call the traditional classical
:44:02. > :44:06.canon, I would encourage them to allow those walls to fall down, and
:44:06. > :44:16.to allow themselves to listen to a song of George Gershwin and be
:44:16. > :44:22.
:44:22. > :44:28.happy about it. # It is very clear
:44:28. > :44:33.# Our love is here to stay. Is there still snobbery in the
:44:33. > :44:37.classical world? Oh yes, we are very snobbish, we think if it
:44:37. > :44:42.hadn't been written, particularly and preferably in the 19th century,
:44:42. > :44:48.somewhere in Europe, it can't possibly be as good. That is simply
:44:48. > :44:53.a mistake. Jessye Norman backs Barack Obama
:44:53. > :44:57.for a second term, and not just because he gave her a medal. She
:44:57. > :45:02.supports him over gay marriage. have never understood why it
:45:02. > :45:07.bothers other people so. If you're in a committed hetrosexual
:45:07. > :45:13.relationship, why does it bother you that the people across the road
:45:13. > :45:23.are the same-sex and happy together. Wouldn't you just want to celebrate
:45:23. > :45:24.
:45:24. > :45:29.love in any form that it can occur in this challenging world of our's?
:45:29. > :45:36.Religion plays a great big part, particularly conservative religion.
:45:36. > :45:43.I don't know how conserve ive and religion goes together, since any
:45:43. > :45:53.religion is meant to be about love, and understanding, and acceptance.
:45:53. > :45:53.
:45:53. > :46:01.So conservative and religion is an objectiony moron for me.
:46:01. > :46:07.Oxymoron for me. You're from the same town as James
:46:07. > :46:13.Brown? I saw him in the lobby, and I thought should I go and say hello,
:46:13. > :46:19.or walk by and keep smiling. He turned around and he said, Jess,
:46:19. > :46:24.how marvellous to see you. And so I said, I was going to say hello, but
:46:24. > :46:30.I certainly could imagine that you had any idea. He said he knows all
:46:30. > :46:35.of his homegirls. I wouldn't do my job properly, and usually that is
:46:35. > :46:40.how it is, if I didn't say, could you please sing a little for us.
:46:40. > :46:46.# Falling in love with love # Is falling for make-believe
:46:46. > :46:52.Falling in love with love # Is playing the fool
:46:52. > :46:58.Good, would you say that you are a diva? One thinks of a diva as being
:46:58. > :47:05.a person who is rather difficult to be around, and difficult to be with,
:47:05. > :47:14.forgive the dangle participles, and capricious and generally rather bad
:47:14. > :47:20.company, and I'm not like that. If a diva is a person that takes