:00:14. > :00:17.Tonight, Spain is reported to be on the verge of formally seeking a
:00:17. > :00:22.multibillion euro bail out. The details are muark year, but the
:00:22. > :00:26.consequences are grave. Will it be enough to end the problems in the
:00:26. > :00:31.eurozone's fourth-biggest economy, where does it leave the EU, and is
:00:31. > :00:35.it just a start of a new phase of the mess. We will hear live from
:00:35. > :00:41.Madrid and Athens. While the US and UN try to figure out way forward
:00:41. > :00:43.for Syria, a BBC correspondent travels to the scene of the latest
:00:43. > :00:47.massacre. I have seen appalling things, there are bits of people's
:00:47. > :00:51.brain lying on the floor. In the corner there is a mass of congealed
:00:51. > :00:56.blood. The from the world economy, to war and peace, we will ask if
:00:56. > :01:06.the failure of leadership lies with our institutions, our economic
:01:06. > :01:09.model, or maybe even our ideas of democracy.
:01:09. > :01:12.Good evening, the eurozone's fourth-biggest economy stands on
:01:12. > :01:17.the brink tonight of asking for bail out of its banks. It was
:01:17. > :01:20.reported today on a conference call of eurozone finance ministers,
:01:20. > :01:24.tomorrow Spain will formally ask for financial help. The problems
:01:24. > :01:27.for the Spanish banks and Government are profound, and could
:01:27. > :01:31.lead to problems for the whole world. We will hear the view from
:01:31. > :01:37.Madrid and Athens in a empt mo, and consider whether the failures of --
:01:37. > :01:40.in a moment, and consider whether the failures are a wider problem of
:01:40. > :01:46.financial institutions. What is going on, it is counter
:01:46. > :01:51.rumour and rumour today? It is more than rumour. The Reuters news
:01:51. > :01:56.agency at noon reported, this is a quadrupled-sourced report, a
:01:56. > :02:00.Spanish request for an aid package, the announcement expected Saturday
:02:00. > :02:04.afternoon, the Government of Spain has realised the serious of the
:02:04. > :02:07.problem it is said by a senior German official. This is followed
:02:07. > :02:11.by denials by Spanish ministers, they don't need a bail out and they
:02:11. > :02:14.are not asking for one. More or less the whole of the pro-
:02:14. > :02:21.Government Spanish press accuseded the news agency of spreading false
:02:21. > :02:24.information. But I think my best guess is come 1.30 tomorrow
:02:24. > :02:30.afternoon there will be a conference call and Spain will ask
:02:30. > :02:36.for a bail out. The size of it we don't know, we know the IMF will
:02:37. > :02:40.publish a report on Monday that they need at least 40 billion. That
:02:40. > :02:46.is probably a severe under estimation. What will be
:02:46. > :02:50.significant for the rest of us in this bail out? It is about how much
:02:50. > :02:55.Germany it prepared to move. Most people in the international
:02:55. > :02:58.community believe Germany is about to move, make concessions, not just
:02:58. > :03:04.to Spain, but ultimately in the next nine days, to Greece as well.
:03:04. > :03:08.But the form it takes has to looks a minor and meagre as possible. It
:03:08. > :03:12.is about what conditions German tax-payers' money moves to the
:03:12. > :03:22.south to underpin the rescue of these southern economies, as I have
:03:22. > :03:29.
:03:29. > :03:36.# Down down # Deeper and down
:03:36. > :03:40.With Spain's economy plummeting confidence collapsing, what they
:03:40. > :03:43.are waiting for in Brussels is a request, in Washington they are
:03:43. > :03:46.getting tired of waiting. These decisions are fundamentally in the
:03:46. > :03:51.hands of Europe's leaders, fortunately they understand the
:03:51. > :03:57.seriousness of the situation, and the urgent need to act.
:03:57. > :04:03.Here is why it is urgent, the ratings agency, FITCH, just slashed
:04:03. > :04:09.Spain's credit rating, citing policy mistakes at European level,
:04:09. > :04:14.predicting it will take up to 100 million euros to save them, pushing
:04:14. > :04:20.the country's debt to 90% of GDP, and they don't just need a bank
:04:20. > :04:26.bail out. For the banks alone we are looking to 250 billion euros,
:04:26. > :04:32.that is quadruple what the IMF is saying. On top of that you need to
:04:32. > :04:37.plug the gap on the public and external debt positions, that will
:04:37. > :04:42.be a few hundred billion more euros. The money exists to bail out Spain,
:04:42. > :04:49.but up to now, to get that kind of money, you have to cut spending,
:04:49. > :04:57.raise taxes, and Spain is already looking fra,, and -- fractious, and
:04:57. > :05:01.while Europe is haggling over, that the there is fears of a pan
:05:01. > :05:04.Mediterranean Northern Rock. People are worried their country is
:05:04. > :05:08.leaving the eurozone and their savings will be devalued away. The
:05:08. > :05:13.only way poor countries could stand behind a bank guarantee and say
:05:13. > :05:17.your deposits are worth the same in the new currency as in euros, is
:05:17. > :05:21.you have a Central Bank willing to print unlimited funding.
:05:21. > :05:26.temperature is rising because of the upcoming Greek election, a left
:05:26. > :05:31.victory there could spark a eurok sit crisis.
:05:31. > :05:35.-- exit crisis. That has put Germany's Angela Merkel under
:05:35. > :05:39.intense private pressure to lay off southern Europe to relent on the
:05:39. > :05:48.austerity conditions. Today, President Obama, dispensed with
:05:48. > :05:53.private diplomacy. If you are engaging in too much austerity too
:05:54. > :05:58.quickly and that unemployment rate goes up to 20-25%, then that
:05:58. > :06:05.actually makes it harder to then pay off your debts. And the markets,
:06:05. > :06:08.by the way, respond in this when they see the downward spiral
:06:08. > :06:11.happening, they are making a calculation, if you are not growing
:06:11. > :06:17.at all, if you are contracting, you may end up having more trouble to
:06:17. > :06:23.pay us off, we will charge you even more. All permanent solutions
:06:23. > :06:28.involve German tax-payers putting their euros, either at risk, or
:06:28. > :06:32.effectively on a conveyor-belt to southern European Governments in
:06:32. > :06:36.large amounts. They are saying, you are asking us to put our own
:06:36. > :06:41.solvency on the line, to underwrite southern Europeans who we don't
:06:41. > :06:47.completely trust, and with good reason. We have seen how they have
:06:47. > :06:52.backsliden on various agreements. The German response is not, no
:06:52. > :06:55.never, it is, we will do it if, in response, we get a political union
:06:55. > :06:58.in Europe, in which we are guaranteeed that say the Spanish
:06:58. > :07:02.and Greeks, there is a central control over how they spend. It is
:07:02. > :07:08.logical for the Germans to hold out for a long-term solution. But the
:07:08. > :07:12.longer they do, the greater the chances are that Europe hits some
:07:12. > :07:16.short-term systemic crisis. For a crisis like that you need a
:07:16. > :07:20.Government, a Central Bank, and a tight group of politicians, who can
:07:20. > :07:23.make the rules up as they go along. All of which Europe just doesn't
:07:23. > :07:27.have. And those who get to hear the inner
:07:27. > :07:33.most fears of global leaders know the danger is rising.
:07:33. > :07:37.I heard a senior American make exactly that point just over the
:07:37. > :07:41.weekend. There was an American policy maker who said he speaks to
:07:41. > :07:45.the Germans all the time, and they say that they understand it looks
:07:45. > :07:49.like too little too late, but they will do just enough to avoid
:07:49. > :07:59.catastrophe. The American response was, that is how you get a
:07:59. > :08:02.
:08:02. > :08:10.catastrophy. This new phase of crisis denial,
:08:10. > :08:16.and microfoam diplomacy finally pushes Europe to a solution, we
:08:16. > :08:21.can't go on with the status quo. In Madrid we have Schwartz swart
:08:21. > :08:26.Schwartz, a free market economist and former -- Pedro Schwartz, a
:08:26. > :08:32.free market economist, and joined by our guest in Athens. Professor
:08:32. > :08:37.Schwartz, how do you think any bail out to Spain might work? Well, the
:08:37. > :08:41.intention is to bail out some of the banks, those that were savings
:08:41. > :08:47.banks, some of them should have been shut down totally. But they
:08:47. > :08:54.are being kept alive, and so, those banks need money. The IMF has
:08:54. > :08:58.spoken of 40 billion. A large sum, I must say. I think that it is
:08:58. > :09:04.right that with 40 billion, and closing some banks, if possible,
:09:04. > :09:10.the banking sector in Spain would be saved, because we have something
:09:10. > :09:15.like seven large banks, the ones known around the world, Santander
:09:15. > :09:18.and others, that are solid and can get out of the difficult them thems.
:09:18. > :09:23.The problem is, how to get that money, because the Spanish
:09:23. > :09:29.Government doesn't want to looks a if it is being bailed out itself.
:09:29. > :09:39.So the money will have to go to some interimmediate institution,
:09:39. > :09:40.
:09:40. > :09:44.and that could be what is called a frog, a bank money a keeps banks
:09:44. > :09:48.afloat and coming from the rest of Europe. Is Spain really any
:09:48. > :09:51.different from Greece, Ireland or Portugal, in other words, why
:09:51. > :09:56.should you get any softer conditions than any of these other
:09:56. > :10:00.countries if you want the money? The plan that is being set in train
:10:00. > :10:10.by the Government, could perhaps be taken a bit further down. Some of
:10:10. > :10:13.
:10:13. > :10:21.the awen tos me in Spain are doing pre-- autonomies in Spain are doing
:10:21. > :10:25.that. To say we want -- the right recipe is to abide by the rules,
:10:25. > :10:31.the Greeks, perhaps, cannot do it, but the Spanish can, and are doing
:10:31. > :10:34.it. They are abiding by the rules, we are abiding by the rules. And I
:10:34. > :10:39.think if you look at our foreign accounts, the deficit of the
:10:39. > :10:43.balance of payments has been reduced and soon there are will be
:10:43. > :10:47.a positive balance of payments for pain. I think that keeping to --
:10:47. > :10:53.Spain, I think that keeping to the same lines is the right thing to do,
:10:53. > :10:59.and not to organise a super-Europe, with a super-politician in Brussels,
:10:59. > :11:03.whom many of us don't trust. With the Greek elections little over a
:11:03. > :11:07.week away, how do you think this will be seen in Greece,
:11:07. > :11:11.particularly if the conditions on which Spain gets money are
:11:11. > :11:16.different, perhaps softer than the austerity which you have gone
:11:16. > :11:21.through? Can I first just say that the Spanish, are indeed abiding by
:11:21. > :11:25.the rules. This means they have 25% unemployment overall, and 50% youth
:11:25. > :11:28.unemployment, the rules are not working in Europe, austerity has
:11:28. > :11:31.failed. The crisis has the same fundamental cause to it. Spain is
:11:32. > :11:36.not different to any other country in the periphery. The way it will
:11:36. > :11:40.play in Greece will be mixed. A lot of Greeks will be hoping that some
:11:40. > :11:45.how this will mean that austerity will be lessened. That this will
:11:45. > :11:48.lead to a softening of German attitudes across the eurozone. My
:11:48. > :11:53.own view is this is misguided, I don't think this will happen. This
:11:53. > :11:58.is wishful thinking. It is more like had hely that if Spain does
:11:58. > :12:03.ask for -- likely that if Spain does ask for a bail out and it is
:12:03. > :12:06.brought to pass, this will lead to an unravelling of the eurozone in a
:12:06. > :12:14.big way. Do you think Germany is reaching a point where they are
:12:14. > :12:17.thinking, Spain is savable, but let's cut Greece adrift, it is time
:12:17. > :12:21.for you to be out of the eurozone? I think the situation has been
:12:21. > :12:26.allowed to fester for so long, that things that would have happened two
:12:26. > :12:36.years ago and possibly rescued Spain, or stablised the situation
:12:36. > :12:36.
:12:36. > :12:40.as a whole, are now not possible. If Germany thinks cutting off
:12:40. > :12:46.Greece and saving the rest they haven't thought it through. The rot
:12:46. > :12:50.is going on too long. What is necessary to rescue the eurozone is
:12:50. > :12:53.massive restructuring of the whole thing, it is not just letting the
:12:53. > :12:56.Greeks go, it is a Marshall Plan, a bank reorganisation across Europe,
:12:56. > :13:02.it is debt forgiveness, we are talking big things if the eurozone
:13:02. > :13:07.will be resolved. Let's go back to Madrid. I'm glad to see there is no
:13:07. > :13:12.power cuts in Madrid, we can now see you clearly? I'm very sorry,
:13:12. > :13:17.I'm in my house. That is good news for the economy, at least. Do you
:13:17. > :13:19.detect any significant change from Berlin, in the way that they are
:13:19. > :13:25.approaching this, because that is the big signal that everyone,
:13:25. > :13:29.particularly the Americans, as we know, are looking for? Apart from
:13:29. > :13:34.the Americans, that is the President Obama, who believes in a
:13:34. > :13:39.certain kind of economics. Here we need from the Germans help for some
:13:39. > :13:44.banks, as I said, that is not as much money as people have said. The
:13:44. > :13:54.Spanish Government, I think, can go on with cuts and at the end of the
:13:54. > :14:00.year, can show that it is getting on the right way. I don't think
:14:00. > :14:03.that recreating a Europe that intervenes everywhere, and having a
:14:03. > :14:10.European minister of finance, in Brussels, whom many of us will not
:14:10. > :14:15.trust, is the right way. The rot in Greece was started with the Greeks,
:14:15. > :14:24.not with the union. It is the Greeks and the Spanish who changed
:14:24. > :14:29.the way ...I Want to hear another word from Costas Lapavitsas? I find
:14:29. > :14:32.it incredible that two years in to the crisis, it is the tired old
:14:32. > :14:35.mantra, it is the fault of the Greeks. It is the structure of the
:14:35. > :14:40.eurozone itself. We are going to have to leave it
:14:40. > :14:44.there. We have run out of time. Thank you very much.
:14:44. > :14:48.In Syria there was renewed fighting today in the capital, Damascus, an
:14:48. > :14:52.apparent shelling of the city of Homs by Government forces. The grim
:14:53. > :14:57.pictures and stories emerges have so far failed to prod the rest of
:14:57. > :15:01.the world into anything resembling a solution, despite the next round
:15:01. > :15:06.of diplomacy in New York. UN observers risked their lives to
:15:06. > :15:11.enter the village of the latest massacre, Qubair. How significant a
:15:11. > :15:14.moment was it that they were risking their lives and managed to
:15:14. > :15:18.get there? In one sense, you could say they got there too late.
:15:18. > :15:22.Because of the obstruction that took place yesterday, you see a
:15:22. > :15:25.room covered with blood stains, is this a room in which a family was
:15:25. > :15:28.massacred, or was it a room in which people were brought to
:15:28. > :15:33.treatment by those trying to help those who survived what happened.
:15:33. > :15:37.It is very hard to tell. The key point is they did get there. This
:15:37. > :15:41.UN mission, however ineffective it may be, or seem to be, remains a
:15:41. > :15:44.slither of hope, if you like, that there is some sort of diplomatic
:15:44. > :15:47.platform around which the key countries with an interest in Syria
:15:47. > :15:53.could still rally the Russians and the Chinese, afterall, agreed to
:15:53. > :15:58.the mission going in. They are the leaders of the awkward squad in
:15:58. > :16:01.this particular equation. That is a key point, the mission itself have
:16:01. > :16:05.said it was critical they weren't allowed in yesterday, they want to
:16:05. > :16:09.maintain their access. It could be one of the few breaks on the
:16:09. > :16:11.gradual deterioration of the situation that they do. Gradual
:16:11. > :16:15.deterioration, even from this distance, it seems obvious, that on
:16:15. > :16:20.the ground, things are just getting worse? The pattern of the conflict
:16:20. > :16:24.is shifting, I think. We are seeing certain evidence of escalation,
:16:24. > :16:28.clearly these shabiha, these militia groups seem to be operating
:16:28. > :16:32.in a more semi-autonomous way, there is a communal at this timeor
:16:32. > :16:34.at that time building up between certain families and clans and
:16:34. > :16:38.neighbouring villages, on a pattern that might have been seen in will
:16:38. > :16:41.he be I don't know on the civil war and the Bosnian war in the 1990s.
:16:41. > :16:46.There is some evidence of more advanced weaponry getting through
:16:46. > :16:50.to the opposition, Syrian armoured vehicles, a lot of videos appearing
:16:50. > :16:54.of armoured vehicles being destroyed. Sometimes by seemingly
:16:54. > :16:57.advanced anti-tank weapons. All of that could mean the regime sub
:16:58. > :17:03.contracts the war more and more to militia groups, more like a Libyan
:17:03. > :17:09.pattern, armed men in pick-up trucks. All of that is a bad sign.
:17:09. > :17:12.Are there still serious diplomatic options here? There do seem to be
:17:12. > :17:16.some. There is still some scope, the UK and France clearly very
:17:16. > :17:20.disappointed with what's happened in recent days. They seem to be
:17:20. > :17:26.pinning their hopes still on trying to pressure the Syrian regime
:17:26. > :17:33.through coalitions of the willing. The EU, the Arab League, have gone
:17:33. > :17:37.further than the UN Security Council because they are not bound
:17:37. > :17:41.by the same dynamics, they might explore further in that direction.
:17:41. > :17:45.Mr Annan seems to be pushing the Contact Group, regional powers,
:17:45. > :17:49.including Turkey and Iran, the Americans and British don't like it.
:17:49. > :17:54.He is still thinking about it, as became apparent today in this
:17:54. > :17:58.stream of consciousness. All these questions are now being discussed,
:17:58. > :18:05.and we are also exploring how we can work with other Governments in
:18:05. > :18:09.the region and around the world to achieve our goals. One thing which
:18:09. > :18:14.Syria, the eurozone crisis, and a global economic slowdown have in
:18:14. > :18:19.common, is a desire for leadership. Is the apparent lack of leadership,
:18:19. > :18:22.inadequate institutions, flaws in the United Nations, and the EU, is
:18:22. > :18:29.it inadequate politicians always chasing the next election, or a
:18:29. > :18:34.design flaw in the way democracy works. Our guests are with me now.
:18:34. > :18:38.Timothy Garton Ash is a passionate advocate of the ideals in the EU,
:18:38. > :18:42.and Gisela Stuart is a former minister, fallen out of love with
:18:42. > :18:45.the EU project. Tom, in terms of the institutions,
:18:45. > :18:49.we heard our contributor from Madrid saying people don't trust
:18:49. > :18:53.the people in Brussels, is this a worldwide phenomenon. The big
:18:53. > :18:57.institutions just aren't working? really can't speak from a European
:18:57. > :19:00.perspective, but from an American point of view, what we see is a
:19:00. > :19:03.terrible combination of really deep holes, and really weak leaders.
:19:03. > :19:08.Deep holes and weak leaders, you know, can really give you a
:19:09. > :19:12.dangerous crisis right now. I think that, from the American point of
:19:12. > :19:16.view, we have a new generation in power now, in the United States. We
:19:16. > :19:18.have gone from a generation that believed in save and invest, our
:19:18. > :19:23.greatest generation, to a generation that believed in borrow
:19:23. > :19:30.and spend. My generation, the baby boomer generation, we're now paying
:19:30. > :19:35.the piper for that. It is the people's fault? With the leaders,
:19:35. > :19:41.we elect them and say what they can and can't do. There is a timidity,
:19:41. > :19:47.I see the exact same thing, it is a bit of a howler to watch my
:19:47. > :19:50.President lecture your President, my President who rejected his own
:19:50. > :19:53.deficit commission. We're always good at spending other people's
:19:53. > :19:57.money. I wondered if you thought, specifically on the EU, you are
:19:57. > :20:03.obviously in favour of the project, do you think it has been totally
:20:03. > :20:08.oversold bit political elite, it is just not living up to what people
:20:08. > :20:11.said it would do? It is important to say the three biggest economies
:20:11. > :20:18.and political countries in the world, namely, the United States,
:20:18. > :20:27.China and the EU, are all in major crises of their political economy.
:20:27. > :20:32.Tom described the American crisis, and Chinas a democratic crisis. In
:20:32. > :20:36.Europe we have European Monetary Union and policies, our politics
:20:36. > :20:41.are still national. These are democratic national politics, and
:20:41. > :20:47.the biggest problem s the real question is, can you find a deal
:20:47. > :20:51.that will be acceptable both to the Spanish voters and to the German
:20:51. > :20:54.voters? That is the European crisis. There is way of positively looking
:20:54. > :20:58.at that, which is saying, actually, that means we still like our nation
:20:58. > :21:02.states. Broadly we trust them more than some other international body,
:21:02. > :21:06.that may be a good thing in terms of how we get on in Britain, or how
:21:06. > :21:11.French people think about France, but it is pretty bad if you are
:21:11. > :21:14.trying to run 27 countries all together? The nation state has an
:21:15. > :21:19.extraordinarily important function, arguably, with exception of the
:21:19. > :21:24.Balkans, most 1945, Europe had functioning nation states. What we
:21:24. > :21:27.now have is a construction of a financial union, without a
:21:27. > :21:34.political union. Which is trying to overcome the nation state, it is
:21:34. > :21:36.not taking its people with it, and above all, it is incapable of
:21:36. > :21:40.regaining competitiveness. If it was the United States of Europe,
:21:40. > :21:43.France, Spain, all these countries, would still have their economic
:21:43. > :21:49.problems, because you have a single currency construction, which is
:21:49. > :21:55.simply not working. Do you think that people simply distrust
:21:55. > :21:59.eliteings in all the countries. -- elites in all countries. We
:21:59. > :22:04.distrust international elites and elites in our own classes, because
:22:04. > :22:08.they are not doing what we want them to do? You could look at it
:22:08. > :22:12.broadly about not distrusting them, but individuals are so in power now,
:22:12. > :22:18.there is so much transparency, to be in public life, everyone
:22:18. > :22:23.blogging, tweeting, taking pictures. To be a leader now is a lot harder,
:22:23. > :22:27.it is extremely noisy out there. it also, is it the leaders broadly
:22:27. > :22:30.know what they should be doing, but they are terrified of the voters.
:22:30. > :22:35.Because in your Congress every two years they have to be re-elected.
:22:35. > :22:41.You can't take tough decisions if you have a two-year time frame?
:22:41. > :22:45.think our leaders now, presidential and congressional, are misreading
:22:45. > :22:50.the public mood. The public are away head, they understand the
:22:50. > :22:52.problem, they want to be led. Good policy here is the best politics.
:22:52. > :23:00.Do you agree with, that that the people are ahead of the
:23:00. > :23:05.politicians? Can I pick up on that. The hod of the euro group says they
:23:05. > :23:09.know what they need to do, they don't know how to do it and get re-
:23:09. > :23:13.elected. That is the challenge. The key to this moment is one person,
:23:13. > :23:17.Angela Merkel. If Angela Merkel from the beginning of the crisis
:23:17. > :23:21.had said, my dear compatriots, we have to save the eurozone, because
:23:21. > :23:28.it is in our own economic and national interest, we would be in a
:23:28. > :23:35.different place today. So I think it is the challenge of persuasion
:23:35. > :23:39.by democratic national leaders, and the eurozone will stand or fall on
:23:39. > :23:47.democratic national politics. talks of Europe, but she thinks of
:23:47. > :23:51.Germany, that is hardly surprising, that is what leaders do? It is
:23:51. > :23:56.shocking that we said the politicians know what the right
:23:56. > :24:00.answers are, but they can't do it because they can't take the nation
:24:00. > :24:06.with them. The question is I as a politician take money out of your
:24:06. > :24:11.pockets in taxes and do things, and that is what you elect me to do.
:24:11. > :24:15.So-to-think that Germany could continuously rescue Spain and
:24:15. > :24:19.Portugal, Angela Merkel knows, she knows that they have poured
:24:19. > :24:22.millions into East Germany and it hasn't made them competitive.
:24:22. > :24:27.don't disagree, because if she doesn't persuade the German people,
:24:27. > :24:31.then the thing will go down. Actually the Irish have just voted,
:24:31. > :24:35.in a referendum for a Fiscal Compact, let's agree you need to
:24:35. > :24:39.ask the people. Ireland is still in recession, they have not resolved
:24:39. > :24:42.the problem. Unlike places like Iceland, it has not been able to
:24:42. > :24:46.devalue. Ireland hasn't been solved. Do you want to tell the Irish to
:24:46. > :24:49.vote again, because they gave the wrong answer, they said yes?
:24:49. > :24:54.need to allow countries to leave the euro, because the current
:24:54. > :24:58.construct will not survive. We can either delay the day of reckoning,
:24:58. > :25:02.or we can draw the logical conclusion and say this construct
:25:02. > :25:06.doesn't work. I'm all in favour, if they vote for it. Do you see, while
:25:06. > :25:11.you said the people may be ahead of the politicians, maybe not
:25:11. > :25:16.everywhere. But to take Greece, for example, the fate of much of Europe,
:25:16. > :25:20.and perhaps the world economy, depends on a very few voters in a
:25:20. > :25:24.very small country, lovely though it may be, that seems rather odd,
:25:24. > :25:30.does it not, that they decide how the eurozone should continue, which
:25:30. > :25:34.affects all of us? It certainly seems odd to me. I agree with what
:25:34. > :25:38.was said about competitiveness. Ultimately, can you make stuff that
:25:38. > :25:41.other people want to buy? Can you have a currency and an economy that
:25:41. > :25:46.is aligned with that? What worries me when I look at Europe today, is
:25:46. > :25:50.not banks that are too big to fail, I say is this problem too big to
:25:50. > :25:55.save. I do have sympathy with Merkel. I agree with what Tim said
:25:55. > :25:58.too. She's damned if she does and if she doesn't. She needs Europe
:25:58. > :26:02.for a thriving German economy. But at the same time, what confidence
:26:02. > :26:05.would you have that the Greeks really get it and can produce a
:26:05. > :26:08.competitive economy in this construct. I really think the
:26:08. > :26:13.crisis retina, the choice for Europe today, they are going to
:26:13. > :26:18.have a political crisis, as they inflict the pain, or they can have
:26:18. > :26:22.an economic crisis, or maybe both. I'm fastening my seatbelt, I tell
:26:22. > :26:25.you. In terms of Angela Merkel, you said
:26:25. > :26:28.it is up to her, she could have played it differently, she could
:26:28. > :26:32.indeed have played it differently, but in all the countries we have
:26:32. > :26:35.been talking about, the U state and Germany, constitution -- United
:26:35. > :26:38.States and Germany, constitutions are written so Angela Merkel can't
:26:38. > :26:42.be a really powerful Chancellor, she has so many people to look
:26:42. > :26:46.after and bring with her, it is very difficult? It is very
:26:46. > :26:49.interesting, as Tom knows better than anyone, the United States has
:26:49. > :26:53.an increasingly dysfuntional political system, because it has
:26:53. > :26:59.almost too many checks and balances and lobbies. The German political
:26:59. > :27:02.system was designed to ensure that no Adolf Hitler would ever come to
:27:02. > :27:06.power again T has been immense number of checks and balances, that
:27:06. > :27:11.makes it very difficult to move. That is indeed one of Merkel's
:27:11. > :27:16.problems. That she's not in the position of a French President, or
:27:16. > :27:20.a British Prime Minister. Nonetheless, I think if she started
:27:20. > :27:24.to try to persuade her compatriots, three or four years ago, that it
:27:24. > :27:30.was in their own national interest. Let me bring in Tom there, you
:27:30. > :27:35.could say the American constitution was to prevent another George III.
:27:35. > :27:40.You have gridlock, and a lot of people complain about, but it is
:27:40. > :27:44.what makes America tick? We have divided powers, but what we didn't
:27:44. > :27:49.anticipate was this level of money in politics, this kind of media,
:27:49. > :27:53.that fragments it, politicians are finding it difficult these days any
:27:53. > :27:57.way to trump the other. Do you realise what we are doing, we are
:27:57. > :28:00.having an election, you have your crisis over here, we have an
:28:00. > :28:05.election, and we are saying in five months when we finish the election,
:28:05. > :28:09.you keep it on hold. After our election, and one party spends a
:28:09. > :28:13.billion dollars smeerg the other, then we will get together and solve
:28:13. > :28:18.the problem -- smearing the other, then we will get together and solve
:28:18. > :28:25.the problem. Good luck, we are doing things so detatched from the
:28:25. > :28:29.reality. The voters at the moment are ahead of uss, people know -- us,
:28:29. > :28:32.people want to know what is going on. If you have to increase taxes
:28:32. > :28:34.and reduce public spending, people are prepared to take the pain if
:28:34. > :28:38.the result will get you competitiveness. What we have
:28:38. > :28:42.currently in Greece and Spain, they can cut their public spending, they
:28:42. > :28:48.can increase the taxes, but where they will not become competitive,
:28:48. > :28:51.that is where democracy suffers. Coming up in a minute, the review
:28:51. > :28:55.show, matter that is in Glasgow. Tonight's review show is a book
:28:55. > :28:59.special, we're going to be looking at the latest offerings from a
:28:59. > :29:07.quartet of literary big names. Martin Amis tackles the state of
:29:07. > :29:10.England, we have the retail of the life of Roger Casement, and Lionel
:29:10. > :29:17.Shriver creates her own corner of Europe in the new Republic, all
:29:17. > :29:25.that and music from Paul Buchanan. That is all tonight, we leave you
:29:25. > :29:30.with the final farewell from the Bee Gee RobinGibb. This is the song