15/06/2012 Newsnight


Reporting on the last day of the Greek elections campaign. Will the markets panic on Monday morning? Plus, are country suppers a clue that our leaders are too posh?

Similar Content

Browse content similar to 15/06/2012. Check below for episodes and series from the same categories and more!



Greece decides its future, and perhaps the future of all of us


across Europe. Is this the moment when the eurozone can be lost. It


is already getting heated. With all the parties promising some kind of


changes to the austerity package, will it be enough to see off the


challenge from the far left. Paul Mason is in Athens tonight.


The Greek Conservative leader tells his party, if we don't win this one,


there won't be a third election, just chaos.


Our guest also assess the impact Greece's decision will have on


Britain, Europe and the world economy. Also tonight:


Before we get on the proper business of the evening, getting


chateaued beyond belief. The perils of being posh, as David Cameron now


reaches the point where his lifestyle and friends reach a


difficult point. We talk to our guests.


Good evening, there is something a bit odd about a project involving


more than 400 million of the richest people on earth, in which


the decisions of handful in a tiny country matter so much. That is the


way it looks tonight as the people of Greece prepare to go to the


polls on Sunday. Ground down austerity, fed up with politics, as


usual, and not entirely sure whether their voting would take


Greece out of the yourier row, and even cause the currency and the


world economy to collapse. Britain's former Prime Minister,


Gordon Brown, warned today of a possibly chaotic exit from the euro,


saying Italy and even France might soon need a bail out. Paul you have


been there all week in Athens who will win, you must be an expert?


Opinion polls are banned before the election. A lot of people in the


world of banking in the last couple of days have seen and told me about


private polls, who say New Demok on 30, Syriza, the far left, on 27,


but margins of error there, quite crucial. That still leaves another


40% of voters. But what will happen in this election depends first of


all on the turn out, whether people who realise, this is it, this is


the election that decides Greece's fate, and that they suddenly have,


which they didn't realise before, a choice for a far left party that


will take them out of the austerity and into the unknown, as we are


about to see, whether people just turn out. Or, whether people, it is


a were, the fear vote and Mr Samaras, the leader of the


Conservatives has been playing on that fear all week, whether the


fear vote just rushes, in larger numbers than the polls are


predicting, to the Conservatives. We will probably get a decisive


outcome. That is my feeling, I don't know which it is. There are,


there is a minority of pollster who is say watch out for a Syriza


landslide. But New Democracy had a big rally today, what about their


leader have to say to the party faithful? He said if we don't win


this, there will be so much economic chaos, we might not get to


a third election. He didn't specify what would actually prevent Greece


getting to a third election. But it is the rhetoric like that, that I


think people are responding to. Mr Samaras said this is an election


about the euro, we are in or we're out. Vote me and we are in, vote


for the left and we are out. The left vehemently denies. That you


can't overestimate how pro-Europe that far left Syriza are, they


genuinely believe they can make Greece work as part of the euro, if


they get some breathing space to do a much more radical, almost left


Social Democratic version of a growth strategy. So, you know,


Greece's voters are being presented with a real choice, not a rhetoric


choice. It is a real choice between two paths out within the euro. But,


you know, the experience of being here all week, going to far flung


village, ar meet -- and meeting people who have never met a member


of Syriza, saying en masse, they are going to vote for them. This is


something Greek politics hasn't seen, since the end of the


dictatorship. And very briefly, Paul, how


prepared is the rest of Europe f any one of these chaotic scenarios


the one we end up with on Monday? Mr Cameron was teleconferencing


this afternoon. They have cancelled the attendance of certain people at


the Mexico G20, or they have postponeed it. They will throw all


kind of things at t they will throw liquidity, Central Bank action. It


is not really Syriza wins and everything going haywire, it is New


Democracy wins and they can't rule. For the Greek middle-class, it was


time tonight for one last drink before the unknown.


For many people in business, business is frozen. There is little


investment coming in, and credit is drying up. Beneath the laidback


surface, mainstream politics are getting tense. There are no opinion


polls allowed at this stage of the election. Many Greeks have seen or


heard of, private opinion polls that indicate the Conservative New


Democracy party, could get 30%. Enough, just, to beat the far left,


and form a Government. But then, the problems start. Partly, because


of the scale of the Greek crisis, partly, because of the


peculiarities of Greek Conservatism. This is the party on which the


hopes of Brussels and Berlin rest. New Democracy, getting ready for


its final rally in Syntagma Sqare. Like PASOK, it is a party blil


built on 0 years of two-party patrons -- it is a party built on


20 years of two-party patronage. How does the party operate when it


has to dismantle clientism? Necessity is a big teacher. Now


there is not that much money to hand out, or positions in the


public sector. There aren't going to be many hirings in the public


sector. In order to maintain power, they cannot for more than a few


months, they cannot depend on their old tricks. The worry is, without


anything to offer voters but more austerity and pain, ND, will find


it hard to rule, even if it wins. This is one of New Democracy's


leading lights. In 2010 she was kicked out for supporting the


austerity plan, which at the time, the Conservatives didn't want. She


has rejoined and could be a new minister if they win. If New


Democracy and their partners have the majority, by the people's will


and in parliament, they are obliged to govern. If not, you don't have a


democracy, you say whoever has 17% and wants to stop anything in


governing Greece can do it. This can't be logical democracy. Let as


be cheer what that means t means taking on the trade unions, who


have prevented privatisation, and stopping the central problems in


Athens, are you prepared to do that? If we want to succeed we have


to. Many in the German political class want Greece out of the euro,


what will you say on Monday to prevent that happening, to the


Germans? I will say the Greeks have voted. That it is an incredible


decision. Because the people are really, really suffering in Greece


today. They made the decision, and now, we


are going to do our homework, but you must also stop making life


impossible with all these different declarations every day. I will be


very clear about it. For David Cameron, and the other euro leaders


trying to handle the Greek crisis the options are clear but limited.


A big Central Bank liquidity operation is expected, if the


election sparks a market meltdown. Foreign leaders are pushing Germany


for a clear signal, that it wants Greece within the euro, after a


week in which it is giving signals to the contrary, and the in coming


Greek Government needs a quick answer to its demands for changes


to the austerity package. Again, Germany's rep on the ECB saying


today, there could be no changes. New Democracy wants to renegotiate


the bail out. Many of its core supporters want


tax cuts, offset by cuts in public spending. But since the Spanish


crisis began, the leverage of any in coming Greek Government is


limited. I don't think Greece has that much of bargaining power. If


we were the only danger to the world economy, then we would have


huge bargaining power. Since there is dozens of dangers around, what


Europe will do is build up its defence against any danger,


including Greece. If we don't work with the Europeans to build


defences with them, then we shall be seen as irrelevant, and at best,


left out of the picture. It is, frankly, crunch time, not


just for the Greek Conservatives, but for centrist politics across


Europe. If they fail on Sunday, then there are many, both on the


left and right of politics, who would see that as the signal for


the end of the Uri project. -- euro project.


Antonis Samaras said if they don't make it this time, that will be the


end of the euro, it is election rhetoric, but everybody knows it.


To explore what impact the result of this election might have on the


eurozone, Britain and the world economy, we are joined by George


Magnus, Matthew Hancock, and Bettina Schulz.


What do you think the British Government really wants out of this


election? I think that a governing coalition, it is likely to be that


n Greece, that supports memberships of the euro, but supports the bail


out, so we can bring an end to the uncertainty. As the package made


clear, it will require action outside of Greece, in return.


that mean, I know British politicians say they don't want to


be involved in party politics, that would mean, then, logically, if it


was a Syriza-led coalition, that would be pretty disastrous in the


British Government's point of view, whatever they say publicly about


it? From my point of view, I think it is very difficult to see how the


German public would support an easier and more generous bail out


of Greece, if the Greek, the in coming Greek Government said they


were not prepared to pay the price. The central dilemma in this, is the


Greeks, broadly, want to stay in the euro, the question is, are they


willing to pay for it, this weekend. And the German people want the euro


to succeed, but many of them don't want to pay for the profligacy of


the Greeks. If the Greeks vote decisively to say, yes we're


prepared to do what is necessary, and lead to a New Democracy victory,


then you can see a path through, with Germany saying that this is a


necessary price to save the euro. That would get Angela Merkel off


the hook t would be far easier for her to make some concessions to the


Greek people, if it was a New Democracy group, and not Syriza?


would be better for the German public to accept this especially


when you see there are other countries like Ireland and Portugal,


they have done their structural reforms and the savings. The


population there is also in a very hard situation. But they stick to


the deal, and they have fulfilled their obligations. I think the


German Government and the German people expect this from Greece as


well. I think if you have a constructive Government in Greece,


that will support the euro, especially the deal, which was only


made in March, we shouldn't forget this, it is a very recent deal.


Then I'm very sure the Government will then renegotiate. Don't you


think that Merkel may say, may think, actually being where we are,


we would love to keep it all together, but if Greece went we


wouldn't change that much, drawing a line in the sand with Spain and


Italy and other countries? You have to be careful with this, it is a


very big unknown. You could say the banks have basically written off


the Greek debt, so the financial markets probably would be prepared


in that way. But on the other hand, it would bakesically then create a


different monetary union. different entitlement. Gordon Brown


today was saying this could be a chaotic exit, we have had years to


prepare for it, perhaps, but it could be absolutely awful on Monday.


Where do you come down on this? don't think it will be awful on


Monday. I think, for what it's worth, that the currency markets


and capital markets and Greek equities and European stocks this


week have actually put in a slightly cheery performance by


comparison with recent weeks. Almost to the point where the


market is kind of saying, on Monday morning, one way or the other, you


know, the Central Banks are going to be there, the Bank of England's


obviously with the Chancellor already announcing a major


programme last night. �80 billion of soft loans to banks? It is


thought that the central reserve is looking at things very, very


carefully, and Mario Draghi, at the European Central Bank, said Europe


is standing ready to help. In the immediate aftermath of the election,


markets are expecting that if the outcome is really-and-a-half, --


naff. You mean Syriza, it is what the markets think? In the scheme of


things I'm not sure it makes a huge difference. Greece is going to have


to default and then they make a big decision to do it in or out of


Europe. Is this offering of soft loans to British banks, it is


something the Chancellor can do, is it whistling past the graveyard, it


doesn't really help, does it? would have needed this six months


ago. I'm not sure why it was announced in the way it was


announced, when it was announced. It feels a little bit panicky. But


it may also be part of pre-emptive measures by the Government. What do


you think the Treasury think. Presumably they are really worried,


that is one implication of it? There is huge uncertainty about


what happens, we have just heard that again in this discussion. No


matter what happens in these Greek elections. I think what people want


to know is, is the British Government doing everything we can


to prepare here for whatever outcome there is. Even though that


is limited almost by definition, because we are part of a much


bigger jigsaw? We are part of a global economy, and it was


interesting to hear Gordon Brown make the argument that the euro


zone is damaging the UK economy. The cgs point is, are the British


authorities, the Government and the Bank of England -- the crucial


point is, are the British authorities and the Government and


the Bank of England doing everything they can to prepare. The


programme announced last night had a minimum size of �5 billion a


month, that will be necessary if everything goes swimmingly on the


continent. It didn't have cap to the size f there starts to be bank


runs and collapses on the continent, and that could be a consequence of


what happens. We need to be ready to depend our country. Do any of


you think it ra bit weird, in the middle of a conversation, 400


million people, the richest continent on earth, and waiting for


a hand of Greek vo voters to vote one way or another, with -- voters


to vote one way or another, without it making much difference. It is an


important point, Spain, this week, there is a package for the Spanish


banks. I have a feeling the markets are looking even more to Spain. We


might get one or the other outcome with Greece. We will get some form


of a coalition Government, they have to do the negotiations with


the troika. In the end Greece needs money, they need to capitalise the


banks. They need the money, I think after all this big hype about the


elections, they will calm down and will try to do constructive things.


Given the prospect that was raised by Gordon Brown about France and


Italy and so on. If the problem was just about


Greece, with respect to Greece, nobody would really care, because


as you say, it is very small, it really is on the periphery of


Europe. The trouble s of course, what Greece represents, and has


done actually for the last three year, although the mood music has


been getting louder and louder. What it represents is a systemic


flaw in the way in which the eurozone is trying to work. It


doesn't work. I wished it did, but it doesn't. And so, you can put a


fire out in Greece, quite easily. And yet, it is not going to make a


huge amount of difference. The problem, as was said, we know at


the same time there are huge problems in Spain. That really is


important, that could threaten bank runs as Matthew points out before.


That is the biggest risk for next week is capital flight. That said,


some of your colleagues wouldn't actually care that much if Greece


went, or even if the eurozone were to shake itself apart? I'm normally


the optimist in these sorts of discussions, but I think that the


problem is much deeper than just a liquidity measure, and that solved


by individual bail outs in individual banks, it is structure


within the eurozone. Until they have essentially one economic


policy, to cover the area of their currency, we are not getting to the


end of these endless bail outs. And there are some who say let the


whole thing blow, and we will get through it faster. But I think that


misses the vital problematic ingredient, that is this is a debt


crisis. If there weren't the great debts built up in banks and amongst


Governments, then you could have a revaluation fairly easily. If you


are Greek and you have a load of savings, and your neighbour has put


them in a German bank, Greece leaves the euro, then you lose the


value of your savings, but your neighbour doesn't, and Spaniard


also watch that, and they will say, hold on, there is a risk-free


option. Thank you very much for cheering us


An American journalist friend of mine used to say that all American


stories are ultimately about race, but all British stories are


ultimately about class. This week we learned just how badly average


incomes have been set back by the recession and inflation, we also


learned that the Prime Minister, David Cameron, enjoyed country


suppers in his constituency, with the former News of the World editor,


Rebekah Brooks. Mr Cameron has, of course, been called an "arrogant


posh boy", by one of his Conservative happens.


Do voters care if you are posh in times of austerity. We go in search


of answers. She told me I couldn't go one of


the ropes. Old Eatonians, country suppers, charm personified, these


are scenes from a West End play, lampooning privilege, they are also


words from a text to the Prime Minister. When Brookes's missive to


David Cameron was revealed to the Prime Minister's aides, they


shuddered at the perfect poshness of the patter.


We don't know how he replied, we know he now l now be riled. This is


man so shy of vaunting a guilded youth, had he to be cajoled into


wearing morning suit to the royal wedding. Exactly at the same time


on Thursday that the text message for inviting the Prime Minister to


posh nosh, slightly different news came out, it was an analysis of the


income distribution across the UK, it had bad and good news. Income


inequality is down to its lowest level since 1997 when Tony Blair


came to power. The bad news is median income, those in the middle,


have also take an hit. They have shrunk by their largest amount in 0


years. During the recession of 2008 and 2010, average household incomes


held up as inflation fell and tax credits and benefits worked. Since


then wages have been striped out by inflation. It will take until about


2020 for the incomes of families to reach the levels they were before


the recession, this is a decade- long squeeze. We also find that


some of the actions of the current Government, while maybe well


intentioned, increasing the personal allowance, they have done


that by cutting tax credits. We know they have supported families


over the last decade, less money going to this middle income to low


group, is hurting them now. Dealing with historical trends most western


Governments are dealing with, but they are not helping themselves.


When, in the recent budget there were attacks on simple pleasures


like caravans and pasties, though it has been reversed, damage was


done, colourful emblems of a Government not getting it were


produce. Now Downing Street has done polling, it shows there are a


series of reasons why voters are worried about the Conservatives,


number two is about the cost of living, and whether this Government


gets it, number one is the Government being out-of-touch.


people want is somebody who runs the country well, who runs the


economy well, improves their take- home pay, better public services.


The leaders don't have to be absolutely in touch with the day-


to-day lives of people. But if they see politician who is are failing


and who are out-of-touch. That combination can be toxic.


The Prime Minister used to poll substantially ahead of his party,


since the budget, around the first week of this graph, he has sufd and


not yet recovered. -- suffered, and not yet recovered. Downing Street


know they have a problem, that is why recently the Prime Minister's


private secretary wrote to all cabinet ministers asking for policy


to show they get there is a cost of living squeeze on. They have two


problems in how they deal with, the first is money, for instance, do


you go ahead with the planned 3p increase in fuel duty, due in


August. If you don't, it costs a huge A money. The other is one of


experience. The cost of living debate is something that we all


experience bs, it is a very brave Prime Minister --, it is a very


brave Prime Minister who says he will do it and manage it and


doesn't deliver. It gives the Government worse head winds than


their predesos sors, voters going to the next election will be poorer


than at the last. Harold Macmillan, you never had it so good, 1959,


Margaret Thatcher on a revive year of tax cuts and economy, 1993, Tony


Blair, his second landslide in 2001, four years in Government, rising


living standards. David Cameron won't be able to seek relax on that


platform. There are global trends at play. Cost of living going up is


driven by the cost of oil, food costs are uncriesing, those are


difficult challenge -- increasing, those challenges are difficult for


the Government to manage. You can be heartless, but not


hopeless. That is the pollster McIsm. It may be that the cost of


living can't be significantly reduced, electorate may anybody a


mood to blame the previous Government F the current lot show


they are at least trying, posh, with a lower case "p", might not


matter. Owen Jones wrote a book called


Chavs: The Demonisation of the Working Class Chavs, and is writing


a new book on the British establishment, and our other guest


went to state schools in Ghana before completing his degree at


Oxford. None of this is secret about David


Cameron, he has a house and we know he is well off and part of the


Bullingdon club. He was elected by the voters, they don't care?


Tories, despite the election being handed to them on a plate, a


woefully unpopular Labour Government, they only got 36% of


the vote. Boris Johnson got elected again, just as posh as David


Cameron, in a city like London, predominantly Labour. There are


specific London issues, in that particular election, it was a


personality contest. Class doesn't matter? It do you don't have to be


a conspiracy therapist to think that the Conservatives are the


political arm of the wealthy. One poll in March had two-thirds of the


population thinking that the Tories were the party of the rich. The


reason the Conservatives could not win the last election, was because


they cannot win in working-class areas. In the way they once could


in the 1950, under the one-nation politics. No wins in working-class


areas? That is completely misguided. Politicians shouldn't be prisoners


of their background and background isn't destiny, I don't think I


would be on the programme, brought up by a single mother, three of us


on her own in Ghana, and then here, having been born here. Voters


understand the same thing applies to David Cameron. You know, it is


not his background that we should be judging him by, he has had a lot


of difficulty in his own personal life.'S Out-of-touch, that is the


damaging thing? Does get it? I think there has been a lot in David


Cameron's life that shows he gets it. More importantly. Hold on a


minute, this is something, you told a story about cycling to work, for


example, where we now know he does a lot of horse riding at weekends


with friends, country suppers, that is a completely different planet


from which most British people live? Whether you are born wealthy


or in difficult situations, you can have values that show that you care


about people who are less fortunate than yourself, and you want to help


them. The bigger issue is competence. And David Cameron's


polling did very well when he stood up and vetoed the Fiscal Compact.


Just stick on this issue, Ed Miliband, David Miliband, I have a


list of them here, Ed Balls, Tommy Cooper, Ruth Kelly, all red PPE at


Oxford. They are hardly the people you are write beg in your book,


they are not working-class, it is not working-class Tories are a rare


speeshee, but working-class politicians are a rare species.


There is crisis in this kourpbgs only 7% of us went to a private


school, not either of us. A third of MPs did. Less than one in 20 MPs


come from any form of unskilled background what sort. Increasingly


you have MPs who have never had a job outside the Westminster bubble.


But it is more of a problem with the Conservatives, infamously, 22


out of 29 members of the cabinet are privately-educated millionaires.


It looks like a Government from the 19th century. The key point is this,


we shouldn't keep people's backgrounded against them, we are


prisoners of our upbringing, we have no control over it. The key


test is who does this Government stand up for. This is a Government


who slashed the autop tax, and is attacking workers' rights. Let's


take the IFS numbers showing inequality has come down. Real


wages have also gone backwards? of the biggest reasons for that is


that the wealthy are actually not earning as much as they used to.


That is not true. What we will see by the end of the parliament, as


far as austerity is concerned, the well off are going to bear the


biggest brunt of the problems. is utterly farcical, take the


Sunday Times rich list, looking at the 1,000 wealthiest people,


quarter have donated to the Conservative Party. Their wealth


again surged this year, last year their wealth went up by a fifth,


the year before by 0%, the biggest. It is boom time for the top,


economic crisis for the rest. you see this as the core of the


issue for the next election, the question of whether we are all in


this together, or we are dividing Britain along these lines? You have


put your finger on it, out-of-touch is a lazy way of criticising


someone you disagree with, who you think is better off than you.


an issue for the next election? is not, Labour should be very


careful. Out-of-touch is being used as a substitute for having a


credible alternative plan. I think the next election will be about who


has got the right plans to get Britain out of this mess and build


a brighter future. You are absolutely right, there has to be a


coherent alternative, it is lacking, from Labour at the moment. But what


you have to face is this, it is a long-term trend with the


Conservatives, every time the Conservatives have won a general


election, since 1955, has been a -- the fact is the reason Tories will


not win is because they are not able to win working-class voters


like they once did. We will find it out at the next election, thank you


very much. In a moment the review show and


matter that is in Glasgow. On tonight's show we will be


delivering our verdict on Rock of Ages, that is the movie musical for


which Tom Cruise learned to sing. True Love, a drama series on BBC


One where David Tennant and Billie Piper improvise their lines. The


new novel, Park Lane, and an exhibition of Invisible Art, we


will have live music from Amy McDonald, do watch.


That is all from Newsnight, we will have more from Paul in Greece on


Monday. We wanted to leave you with a Streisand effect, when you try to


ban an image, you make sure more people see it. That didn't stop


Buute council from banning matter that Pane from photographic --


photographicing her school dinners and commenting. Many, many hits


Download Subtitles