Browse content similar to 18/06/2012. Check below for episodes and series from the same categories and more!
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Greece votes to stay in the euro, and suffer. | :00:12. | :00:18. | |
But does Europe even want them any more? | :00:18. | :00:21. | |
The Conservative New Democracy leader wins the election, and is | :00:21. | :00:25. | |
tonight, trying to form a coalition. But Angela Merkel hasn't helped the | :00:25. | :00:29. | |
mood here. She says Europe will not change the punishing bail out terms | :00:29. | :00:33. | |
for Greece. TRANSLATION: We agreed on a Greece | :00:33. | :00:37. | |
programme, and the framework needs to be adhered to, this means we | :00:37. | :00:40. | |
must be sure that Greece sticks to its commitments. | :00:40. | :00:43. | |
I will be speaking live to one of the architects of the new | :00:43. | :00:46. | |
Government's economic programme, and to a candidate from the | :00:46. | :00:51. | |
defeated far left party, Syriza. Meanwhile, with the Spanish crisis | :00:51. | :00:55. | |
turning to open violence, the value of their bonds crash through the | :00:55. | :00:58. | |
point where borrowing becomes unsustainable. | :00:58. | :01:06. | |
Here we will be talking to the man who negotiated the bond default in | :01:06. | :01:10. | |
March, will he have to do it all again for Spain. Is there anything | :01:10. | :01:14. | |
Governments can do to save us from a decade of economic pain, we will | :01:14. | :01:16. | |
drill into big economic brains. We are at the Egyptian elections | :01:16. | :01:20. | |
too, where it looks like the Muslim Brotherhood will win the president | :01:20. | :01:25. | |
circumstance but the military won't hand over power. We will hear from | :01:25. | :01:35. | |
:01:35. | :01:36. | ||
Cairo and Washington. Good evening from Athens, where the | :01:36. | :01:38. | |
Conservative winners of last night's election, are trying to | :01:38. | :01:42. | |
form a coalition that can keep Greece in the euro. Investors | :01:42. | :01:46. | |
across the world breathed a sigh of relief, that the far left party, | :01:46. | :01:51. | |
Syriza, failed by less than three points, to top the poll.The way was | :01:51. | :01:55. | |
open, it seemed this morning, for a new Government to renegotiate the | :01:55. | :02:00. | |
terms of austerity with Europe, and with the IMF. But, tonight, in | :02:00. | :02:04. | |
Mexico, Chancellor Merkel, said no. Without changes to the bail out | :02:04. | :02:08. | |
terms, it is hard to see where Greece goes next. Meanwhile, with | :02:08. | :02:12. | |
Spain's cost of borrowing moving deeper into the danger zone, the | :02:12. | :02:15. | |
rally on the global stock market looked about as energetic as the | :02:15. | :02:19. | |
tourists do, as they struggle up this thing behind me. | :02:19. | :02:23. | |
Who would want to govern Greece? What would the new Government ask | :02:23. | :02:28. | |
from Brussels and the IMF? Will Spain wreck the whole thing any | :02:28. | :02:32. | |
way? I will explore these questions in a moment, with representatives | :02:32. | :02:35. | |
of the two main parties, and a financial journalist who thinks she | :02:35. | :02:40. | |
knows what is on the table. First, here is what has happened in the | :02:40. | :02:47. | |
last 24 tumultuous hours. Last night Greece came within three | :02:47. | :02:52. | |
percentage points of a far left Government. The nearly-man, Alexis | :02:52. | :02:57. | |
Tsipras, mobbed as he arrived to concede defeat. REPORTER: Is the | :02:57. | :03:05. | |
fight against austerity over now? Is the fight over? | :03:05. | :03:11. | |
The markets open, the polls close, what the markets wanted was | :03:11. | :03:19. | |
certainty, but they haven't got it. APPLAUSE | :03:19. | :03:23. | |
The only certainty is that Greece remains capable of blowing up the | :03:23. | :03:29. | |
euro, despite last night's result. The Greek system gives the winning | :03:29. | :03:36. | |
party 50 extra MPs, so New Democracy's 30% translates into 129 | :03:36. | :03:42. | |
seats. To form a Government tkpwhok needs -- New Democracy needs a | :03:42. | :03:46. | |
coalition with PASOK, the Socialist Party, and to be sure, a small | :03:46. | :03:49. | |
Marxist party called Democratic Left. Syriza, the main far left | :03:50. | :03:55. | |
party got 27%, with 71 seats it becomes the opposition. Together | :03:55. | :03:59. | |
with 18 fascist, 12 hardline communists, and 20 Conservatives | :03:59. | :04:06. | |
who opposed the bail out. But Athens awoke today to the same | :04:06. | :04:09. | |
problems that have sapped the will of politicians for two years. The | :04:09. | :04:17. | |
austerity demanded by the IMF and EU has pushed the economy into a | :04:17. | :04:23. | |
death spiral. The current bail out deal means 1 billion worth of cuts | :04:23. | :04:30. | |
to come. -- 11 billion worth of cuts to come. It all depends on the | :04:30. | :04:34. | |
11 billion worth of cuts in the next month, if the Europeans and | :04:34. | :04:39. | |
the IMF will insist on that, we will see a backlash on that. If | :04:39. | :04:42. | |
they cut Greece some slack and spread it out over the next few | :04:42. | :04:45. | |
years, and are able to balance it with other measure, maybe tax cuts | :04:46. | :04:50. | |
and maybe more money for growth, then perhaps you can see a quieter | :04:50. | :04:53. | |
summer. Cutting Greece some slack sums up | :04:53. | :04:57. | |
the problem, Mr Samaras wants to form a coalition around an | :04:57. | :05:01. | |
alternative strategy to balance the country's books. With tax cuts | :05:02. | :05:06. | |
instead of tax rise, paid for by much more rapid reductions in | :05:06. | :05:08. | |
public spending, and rapid privatisation. What they need from | :05:08. | :05:14. | |
Brussels is time and money.What Greece needs from the core of | :05:14. | :05:18. | |
Europe is not only further help in terms of debt forgiveness, but more | :05:18. | :05:21. | |
particularly a demand boost. The problem in Greece and the periphery | :05:21. | :05:26. | |
of Europe is lack of demand. Europe needs to provide assistance, | :05:26. | :05:30. | |
speeding up the release of European Union structural funds, also | :05:30. | :05:32. | |
providing help, backed by the European Investment Bank. Trying to | :05:32. | :05:35. | |
get some demand into the Greek economy. But the reality of the | :05:35. | :05:39. | |
situation is, whatever the core of Europe provides in the near term, | :05:39. | :05:44. | |
is unlikely, in my view, to get Greece out of a recession. At the | :05:44. | :05:50. | |
G20 Summit in mexko, the leaders arrived, knowing the election | :05:50. | :05:54. | |
result in Greece had bought time, but little else. The German | :05:54. | :05:59. | |
Chancellor put paid to any talk of an easier time for Greece. | :05:59. | :06:04. | |
TRANSLATION: We will discuss with Greece if they can participate in | :06:05. | :06:08. | |
growth impetuouss within the growth programme designed for the entire | :06:08. | :06:11. | |
European Union, but it changes nothing of the decisions of the | :06:11. | :06:16. | |
memorandum of understanding, what we voted on in the German Bundestag. | :06:16. | :06:22. | |
Spain's headline cost borrowing surged to 7.29% this year, the | :06:22. | :06:29. | |
highest since joining the euro. Experts point to 5.5% for borrowing | :06:29. | :06:34. | |
over two years, that is the equivalent of acute chest pain. | :06:34. | :06:38. | |
have seen spiralling downward political and economic problems, | :06:38. | :06:42. | |
feeding debt and banking problems. That self-feeding downward spiral | :06:42. | :06:46. | |
needs to be stopped. Not just through help to the banks, but the | :06:46. | :06:51. | |
core of Europe needs to provide a marshall type plan, providing a | :06:51. | :06:56. | |
European fiscal boost, that helps, not only Spain, but the periphery | :06:56. | :06:59. | |
of Europe. Despite the problems in yuerpbgs the key issue is Germany | :06:59. | :07:02. | |
and the European Central Bank have it within their remit to give a | :07:02. | :07:07. | |
boost to the periphery of Europe, that pulls us back from the brink. | :07:07. | :07:12. | |
On the streets of Athens, the problems of poverty, crime and | :07:12. | :07:16. | |
dislocation, are all too clear. One in five adults is unemployed. There | :07:16. | :07:19. | |
is a yearning for order and stability that the in coming | :07:19. | :07:24. | |
Government has to meet. Soon the global media circus will | :07:24. | :07:28. | |
leave Greece, but another narrative, hidden for now, will remain. It is | :07:28. | :07:33. | |
a narrative of street fights, between fascists and migrants. | :07:33. | :07:37. | |
Between anarchists and riot cops. It is worth rembering that the | :07:37. | :07:41. | |
political class, both here in Athens, and at the G20, has no | :07:41. | :07:45. | |
direct experience of this whatsoever. | :07:45. | :07:49. | |
More than one third of voters here voted for the Marxist left, more | :07:49. | :07:53. | |
than half voted for parties opposed to what will happen next. | :07:53. | :08:01. | |
So discontent continues. So does the crisis. | :08:01. | :08:07. | |
Joining me here, beneath the Acropolis, are the New Democracy MP, | :08:07. | :08:11. | |
and one of the architects of his economic policy. Aristides Baltas, | :08:11. | :08:17. | |
a candidate for the far left Syriza Party, and Professor of fill loss | :08:17. | :08:23. | |
pee of the national technical unit in -- philosophy in the national | :08:23. | :08:30. | |
technical unit. And a journalist who has covered the crisis from the | :08:30. | :08:33. | |
start. You heard Angela Merkel, it is game | :08:33. | :08:38. | |
over, she says there is no change to the memorandum of understanding, | :08:38. | :08:42. | |
what can a New Democracy-led Government now do? It is a given | :08:42. | :08:45. | |
that everyone in Europe wants the Greek programme to succeed. In | :08:45. | :08:49. | |
order for the Greek programme to succeed, we must restart the | :08:49. | :08:53. | |
economy after five consecutive years of recession, we need to | :08:53. | :08:57. | |
enhance the growth programme. We need to increase the safety net of | :08:57. | :09:00. | |
the society, when one out of four Greeks live below the line of | :09:00. | :09:04. | |
poverty. We have had a number of comments from a number of European | :09:04. | :09:08. | |
leaders, we are confident there is a basis for discussion. It seems | :09:08. | :09:11. | |
Merkel has stopped the whole thing tonight. You have heard from a | :09:11. | :09:16. | |
number of European leaders, when she says categorically we may give | :09:16. | :09:20. | |
you structural funds, but knot no changing to the timing and the | :09:20. | :09:23. | |
amounts, what can you do? There is sufficient basis for discussion, we | :09:23. | :09:27. | |
will approach the negotiation, taking as a given that everyone in | :09:27. | :09:29. | |
Europe wants the programme to succeed. How much time have you got, | :09:29. | :09:33. | |
you must know now you are on the brink of power, how much money is | :09:33. | :09:36. | |
left in the coffers here in Athenss? We have enough liquidity | :09:36. | :09:40. | |
for 30 days. We expect the troika to come after the new Government | :09:40. | :09:43. | |
has been formed, to discuss for the next tranche. As part of the next | :09:43. | :09:49. | |
tranche, it was already in the praj to finalise a lot ofish -- | :09:49. | :09:52. | |
programme to finalise a lot of issues in the programme. There is a | :09:52. | :09:55. | |
lot of issues to be resolved, without changing the programme, | :09:55. | :09:59. | |
still open for discussion. The base, I need people to remember, without | :09:59. | :10:04. | |
the economy reconversation, without the economy restarting, 2013 it is | :10:04. | :10:07. | |
expected to be the sixth consecutive year of recession, no | :10:07. | :10:10. | |
fiscal programme could ever meet these objectives. You lost, | :10:10. | :10:14. | |
commiserations, I should have said congratulations to you, Mr | :10:15. | :10:21. | |
Mitarakis. You lost, more than a million people vote Ford you, quite | :10:21. | :10:26. | |
unexpectedly, -- for you, quite unexpectedly, even for yourselves. | :10:26. | :10:30. | |
What can you offer them, if you are sitting outside Government, | :10:30. | :10:33. | |
steadfastly refusing to take part. Surely the dented shield is better | :10:33. | :10:36. | |
than nothing for the people you represent? This is not the question, | :10:37. | :10:44. | |
I think. The question is we cannot participate in a Government with | :10:44. | :10:47. | |
the disagreements so much. The whole strategy up to the elections | :10:47. | :10:52. | |
and now is to try to preserve as much as possible the kind of | :10:52. | :10:59. | |
confidence we have been winning over these months. As you said | :10:59. | :11:03. | |
before about Miss Merkel is, I think, a proof, that the kind of | :11:03. | :11:10. | |
strategy we are pursuing, in a sense, was better than the New | :11:10. | :11:14. | |
Democracy strategy. What I mean is, it was not only Merkel, but all | :11:14. | :11:17. | |
kinds of political leaders in the European Union, said various things | :11:17. | :11:22. | |
about the Greek problem. In our case, what we said is we start from | :11:22. | :11:30. | |
a point of this slippery slope we have been following up until now. | :11:30. | :11:35. | |
We stop the mem da programme at that point and start negotiate d | :11:35. | :11:45. | |
:11:45. | :11:53. | ||
memrand dumb programme at that point and start negotiating then. | :11:53. | :11:58. | |
You broke the story for your paper, what do you think is going on? | :11:58. | :12:01. | |
There is grounds for the new Government to make proposals. The | :12:01. | :12:05. | |
people who voted for Syriza in Greece are in favour of radically | :12:05. | :12:08. | |
changing that programme. So the new Government will enjoy a lot of | :12:08. | :12:12. | |
support in doing that. I know that they have done their calculation, | :12:12. | :12:16. | |
and there has been continuity for the last couple of years in this | :12:16. | :12:21. | |
Government. They, I understand, will be asking for a two-year | :12:21. | :12:26. | |
extension of the bail out programme. Theoretically it ends in 2014, from | :12:26. | :12:31. | |
the eurozone side, they would like it to go to 2016. That costs money, | :12:31. | :12:35. | |
doesn't it? Unfortunately, it does. Officials calculate it will cost | :12:35. | :12:40. | |
around, if not more than 16 billion euros, for those two years. When | :12:40. | :12:43. | |
you extend the programme, and postpone meeting fiscal targets and | :12:43. | :12:48. | |
cuts, that is money, that needs to be covered. 16 billion, Mr | :12:48. | :12:51. | |
Mitarakis, does that sound right to you, you postpone the terms of the | :12:51. | :12:55. | |
bail out for two years s that on the table right now? The critical | :12:55. | :13:01. | |
issue is how fast can we restart the economy, how fast can we become | :13:01. | :13:09. | |
for business friendly. Fiscal figures are driven by GDP, and it | :13:09. | :13:13. | |
is deeper than ever imagined. Lagarde said we have to review | :13:13. | :13:17. | |
right now, and we have to look at the changes. The view from you now | :13:17. | :13:22. | |
is it will cost Europe and the IMF money to dig you out of the hole? | :13:22. | :13:26. | |
Our objective is not more money but that it works, that is the starting | :13:26. | :13:30. | |
point. We think there is a lot of structural reform ones the table | :13:30. | :13:35. | |
that needs to happen, we need more efforts in privatisation, and in | :13:36. | :13:38. | |
using the funds already committed to Greece. We need to change on the | :13:38. | :13:41. | |
ground the business environment. We are not attracting any investment | :13:41. | :13:46. | |
at this stage. This is all economic speak, isn't it. We all know, | :13:46. | :13:50. | |
because we frequent those streets out there, that they are very | :13:50. | :13:55. | |
gritty streets right now. There is anger and violence. I want to start | :13:55. | :13:58. | |
with you Professor Baltas, your party has been a party of the | :13:58. | :14:02. | |
street and the election, is it time now that you basically, are you | :14:02. | :14:05. | |
going to change that. Because with fascists running around the streets, | :14:05. | :14:08. | |
and anarchists, it is playing with fire, isn't it? That is a very big | :14:09. | :14:15. | |
problem. I think it is much more complicated than it has been taken | :14:15. | :14:20. | |
to be. It is not just the political position of Nazi ideology, it is | :14:20. | :14:25. | |
roots and values of the Greek population, it is related to misery | :14:25. | :14:32. | |
and frustration. It is related to sub cultures developing. We need a | :14:32. | :14:39. | |
more general kind of policy to attack the problem. I think that in | :14:39. | :14:43. | |
all kinds of ways, we are more effective addressing these problems | :14:43. | :14:48. | |
than, let as say, the Conservative Government, which can | :14:48. | :14:53. | |
sometimes...Can It be contained? think it can be. Do you think so Mr | :14:53. | :14:58. | |
Mitarakis? In order for it to be contained, you cannot have 50 pest | :14:58. | :15:02. | |
youth unemployment, you need jobs and ho. In order to give people | :15:02. | :15:05. | |
hope you need the private economy running. That is the difference | :15:05. | :15:09. | |
with Syriza, we believe in investment, privatisation, | :15:09. | :15:10. | |
business-friendly country. should we judge your Government f | :15:10. | :15:14. | |
you form a Government this week, what is the target for youth | :15:14. | :15:18. | |
unemployment, the target for adult unemployment, if we come back in a | :15:18. | :15:23. | |
year's time? 12 months from today we would hope youth unemployment to | :15:23. | :15:28. | |
have created 150,000 jobs, 10% of the population, that is the | :15:28. | :15:31. | |
objective, that is what we will strive for. Can you tell us what | :15:31. | :15:35. | |
you think, objectively, will happen, will they make it to a Government | :15:35. | :15:39. | |
they will make it to Government this week, I think that is very | :15:39. | :15:46. | |
clear. I think it will happen soon. I think we will have a new Finance | :15:46. | :15:51. | |
Minister from this country speaking to his counciller parts in | :15:51. | :15:59. | |
Luxembourg on Thursday, will they does. Is it going to be you, the | :15:59. | :16:04. | |
have no idea who Mr Samaras will appoint, it is not a matter of | :16:04. | :16:09. | |
faces but policies. Thanks to my guests in Athens, and good night, | :16:09. | :16:16. | |
over to Kirsty in London. Despite the desperate firefighting | :16:16. | :16:21. | |
for Greece, Ireland and Portugal, the European bail out of Spain's | :16:21. | :16:26. | |
banks, European Summits and the European election going the way | :16:26. | :16:28. | |
European leaders wanted, the crisis is unrelented. Spanish borrowing | :16:28. | :16:37. | |
prices rose sky shy and markets tumbled. Merkel -- sky high, and | :16:37. | :16:47. | |
:16:47. | :16:52. | ||
centre of the attention the world possibility of a two-year extension | :16:52. | :16:58. | |
set with the Spanish bail out. They got their banking bail out with | :16:58. | :17:02. | |
fewer strings attached, and a lot of the people in Greece will expect | :17:02. | :17:08. | |
some sort of concessions. We heard it already there, from the European | :17:08. | :17:12. | |
body politic, for delivering a pro- bail out victory. In Ireland they | :17:12. | :17:16. | |
have been the good boys. Do you think Angela Merkel is serious, or | :17:16. | :17:21. | |
this is an opening gambit? years ago she said no bail outs | :17:21. | :17:24. | |
full stop, she said the European Financial Stability Facility was | :17:24. | :17:27. | |
temporary, now permanent. She has said a lot that has changed in the | :17:27. | :17:31. | |
last few years. The Irish are hoping to cash into the concessions. | :17:32. | :17:35. | |
The Irish media reporting that there would be an extension of | :17:35. | :17:39. | |
their bond repayment, 15 to 30 years. That would have a positive | :17:39. | :17:42. | |
impact on the Irish day-to-day spending, they might be able to get | :17:42. | :17:46. | |
back to the markets. Which sets a good precedent for Portugal, they | :17:46. | :17:50. | |
can continue to be the good poster boy in all the crisis. With all | :17:50. | :17:54. | |
this going about, why is the intensity about the European crisis, | :17:54. | :17:59. | |
there is no let up? It is all about the markets. The new term is "sub | :17:59. | :18:03. | |
bored nation", the markets are very worried that the money they have | :18:03. | :18:07. | |
lent to countries like Spain will be lower down the pecking order, as | :18:07. | :18:13. | |
pardon of the sub bored nation. If the banks have lent money to Spain, | :18:13. | :18:23. | |
they would be lower down the pecking order, They get paid first, | :18:23. | :18:27. | |
the ECB, then the other banks, they are less likely to lend to Spain | :18:27. | :18:32. | |
then. If they do lend it will be on a higher interest rate. That is | :18:32. | :18:35. | |
what we saw today. Trying to explain what is happening | :18:35. | :18:40. | |
in the bond markets is the outgoing head of the Institute of | :18:40. | :18:43. | |
International Finance, a global body that represents banks and | :18:44. | :18:48. | |
other financial institutions, which negotiates with Governments over | :18:48. | :18:55. | |
default, including the Greek default earlier this year. You | :18:55. | :18:59. | |
applaud the banking bail out of the Greeks last week, the Greeks appear | :18:59. | :19:03. | |
to have done the right thing by the European leaders, why is the | :19:03. | :19:07. | |
European crisis no better? I do think that the developments in | :19:08. | :19:11. | |
Greece over the weekend were clearly a positive development for | :19:11. | :19:15. | |
Greece, Europe and the global economy. But I think we are at a | :19:15. | :19:23. | |
stage now where solving the euro zone seven debt crisis will require | :19:23. | :19:27. | |
more than individual actions of countries like Germany, Greece, | :19:27. | :19:32. | |
Spain, Italy, it will require concerted effort by the entire | :19:32. | :19:38. | |
European leadership to frame a solution, and sub lement it with | :19:39. | :19:42. | |
other issues. We will continue to swim upstream and not make the | :19:42. | :19:47. | |
progress needed to calm market anxieties, if not. Let's look at | :19:47. | :19:53. | |
the Spanish bond problem, 7.25%, you can get an insecured loan less | :19:53. | :19:58. | |
than that here. Who will invest in Spain? Markets are deeply troubled | :19:58. | :20:03. | |
at the moment, if one steps back from the current market anxiety, | :20:03. | :20:09. | |
arguably some what overdone, one sees that Spain has a much more | :20:09. | :20:13. | |
manageable debt to GDP ratio than Greece. It is well under where | :20:13. | :20:18. | |
Greece is, Greece is 150%. Spain has a serious but localised problem | :20:18. | :20:24. | |
in the savings banks, the core banks of Spain remain strong. It | :20:24. | :20:28. | |
underscores the importance of eurozone action. We need a clearly | :20:28. | :20:33. | |
game plan towards fiscal union, well articulated, with time lines. | :20:33. | :20:37. | |
We need a clear game plan towards banking union, well articulated, | :20:38. | :20:42. | |
with a time frame. We need more flexibility in the instruments that | :20:42. | :20:46. | |
Europe has. We need to inject funds directly into the banks, rather | :20:46. | :20:50. | |
than weaving them through sovereign buckets, which elevate budget | :20:50. | :20:54. | |
ratios. That is the model in America, you have the fiscal union, | :20:54. | :21:00. | |
but, essentially it means that Germany will have to pay up. They | :21:00. | :21:04. | |
will have to be the one that pays up for the southern countries, yes? | :21:04. | :21:11. | |
Germany, I think, has benefited tremenduously from the eurozone | :21:11. | :21:13. | |
arrangements. Germany has impressively low unemployment right | :21:13. | :21:18. | |
now, Germany has a remarkably strong export record. Part that | :21:18. | :21:23. | |
have is due to the discipline in Germany labour wage and fiscal | :21:23. | :21:29. | |
policies over recent years, part of it is due to the creation of the | :21:29. | :21:32. | |
euro. They have benefited substantially and will continue to | :21:32. | :21:36. | |
as long as they invest in the future of Europe. Germany and other | :21:36. | :21:39. | |
countries will have to lean forward and provided a decisional support | :21:39. | :21:44. | |
to countries like Spain, Italy and Greece. Aren't they going to | :21:44. | :21:47. | |
squeeze them hard. Isn't it if that is the case Germany will demand a | :21:47. | :21:52. | |
lot more control? Well, I think Germany already has perhaps | :21:52. | :21:56. | |
arguably a bit too much influence. The fact of the matter is, that | :21:56. | :22:02. | |
these programmes need to be broadly designed when Chancellor Merkel | :22:02. | :22:04. | |
says, and I understand the necessity of her statement, when | :22:05. | :22:09. | |
she says Greece needs to follow the framework of the programme, I read | :22:09. | :22:14. | |
between the lines some flexibility between the words "framework" and | :22:14. | :22:18. | |
the precise details. It is absolutely essential that Europe | :22:18. | :22:22. | |
recognise that the Greek economy has contracted and is contracting, | :22:22. | :22:26. | |
at a much more severe pace than anticipated when the programme was | :22:26. | :22:31. | |
designed. It is only common sense to extend the near term budget | :22:31. | :22:37. | |
targets some what supplement by additional funding. It need not be | :22:37. | :22:41. | |
large amounts, we are talking about 20 billion euros. You are talking | :22:41. | :22:45. | |
about spend, in order to create growth you must spend? That is part | :22:45. | :22:49. | |
of it, in order to create growth it is not just about spending, but | :22:49. | :22:52. | |
creating an atmosphere of confidence that investors can come | :22:52. | :22:57. | |
back in. It is about capitalising, and recapitalising the bank. You | :22:57. | :23:01. | |
can get credit flowing. It is about European, Greek and global | :23:01. | :23:04. | |
investors having confidence again, not just in Greece, but the | :23:04. | :23:08. | |
eurozone as a whole. It is not just about spending money in Greece, it | :23:08. | :23:12. | |
is about investors feeling confident, that they see a long- | :23:12. | :23:15. | |
term game plan. What about your members in the banks that you | :23:15. | :23:19. | |
represent, they took a bath in Greece, are they going to have to | :23:19. | :23:23. | |
take a bath again with subordination? No, but | :23:23. | :23:27. | |
subordination is a concern. Certainly the investors, the banks, | :23:27. | :23:30. | |
the insurance firms, the pension funds, took a very deep bath in the | :23:30. | :23:37. | |
case of Greece. But Greece had a debt-to-GDP problem, that was miles | :23:38. | :23:42. | |
beyond the debt-to-GDP problem for any other country in Europe. You | :23:42. | :23:47. | |
raise a valid point that the previous commentator on | :23:47. | :23:49. | |
subordination, I think European officials would be wise to step | :23:49. | :23:56. | |
back and stop insisting on primary status of hair claims against the | :23:56. | :23:58. | |
sovereign relative to private sector claims. Will this only | :23:58. | :24:02. | |
undermine the goal of rebuilding confidence among private investors. | :24:02. | :24:06. | |
Ultimately it is only the private investors who will alleviate the | :24:06. | :24:10. | |
burden off the back of the German, Dutch and other European tax-payers. | :24:10. | :24:14. | |
In order to encourage them to come back in, and stay in the game of | :24:14. | :24:17. | |
funding sovereign debt, this issue of subordination has to be | :24:17. | :24:23. | |
addressed. To ask why this is the crisis that | :24:23. | :24:31. | |
won't die, we have, in Chicago, President Obama's economic adviser | :24:31. | :24:37. | |
until last summer, and the editor for the Financial Times, and the | :24:37. | :24:41. | |
chief economist at Germany's oldest private bank. | :24:41. | :24:45. | |
We will talk about subordination later. From America's point of view, | :24:45. | :24:50. | |
tell me how does it look from America, you advised President | :24:51. | :24:56. | |
Obama on policy, what looks scariest about Europe to you? | :24:56. | :25:00. | |
the US, clearly the scariest thing would be if there were some kind of | :25:01. | :25:04. | |
financial meltdown and the contagion leaped across the | :25:04. | :25:08. | |
Atlantic into the financial markets in the US. Easily that could happen, | :25:09. | :25:16. | |
that makes everybody on edge. The second-most scary thing would be if | :25:16. | :25:19. | |
the continued stumbling and shrinking of the European economy | :25:19. | :25:23. | |
means that the world economic growth is just not strong enough to | :25:23. | :25:27. | |
get anybody feeling healthy. That would also be a concern, but both | :25:27. | :25:33. | |
of those are pretty serious matters. The European economy stumbling, | :25:33. | :25:39. | |
sinking, we have got politicians in the G20, we have been here so many | :25:39. | :25:43. | |
times before. Politicians don't seem to be able to make a | :25:43. | :25:46. | |
difference, is the only difference to be made the markets? No, I think | :25:46. | :25:51. | |
there are ideas floating around. Some constructive ideas about | :25:51. | :25:56. | |
pooling the debt overall, talk about banking union where you would, | :25:56. | :26:01. | |
in a sense, water down national regulation, have EU-wide | :26:01. | :26:05. | |
supervision. You would also inject money directly into the banks to | :26:05. | :26:08. | |
resolve this serious problem. She is are huge steps, you thought | :26:08. | :26:12. | |
Maastricht was big, this is even bigger. It is interesting you say | :26:12. | :26:16. | |
that, presumably, in order for that banking union to take place, there | :26:16. | :26:19. | |
would have to be more regulation, and the regulation would probably | :26:19. | :26:23. | |
be designed by Germany? It would be designed at European level. The | :26:23. | :26:27. | |
French, for example, President Holiday, recently elected, this is | :26:27. | :26:35. | |
his big new idea. The problem is there is a lot of big ideas at the | :26:35. | :26:40. | |
same time. No clear game plan, just over 20 years ago we had the great | :26:41. | :26:43. | |
upheaval in Europe with the collapse of communism. The | :26:43. | :26:50. | |
Americans came in with a five-point plan for German unification, all | :26:50. | :26:55. | |
done, bang. Pooling the debt, a good idea? Not at the moment. There | :26:55. | :27:00. | |
will be some pooling of debt over time. But, if we pool the debt up | :27:00. | :27:04. | |
front, those who are the paymasters lose control. There is always a | :27:04. | :27:07. | |
give and take. There is some pooling of debt, and some | :27:07. | :27:14. | |
establishment of rules to prevent future debt crises. It is a process, | :27:14. | :27:18. | |
there is no silver bullet to solve it once and for all, but it is a | :27:18. | :27:22. | |
process that will move on. You want other people to bleed before | :27:22. | :27:26. | |
Germany pays the debt? No, it is not other people bleeding, but it | :27:26. | :27:31. | |
is other people accepting fiscal rules, which, in the future, is | :27:31. | :27:36. | |
fiscal debts in the future need to be smaller. That is the problem, | :27:36. | :27:40. | |
Germany approaches is step by step, but the markets have always been | :27:40. | :27:44. | |
ahead of the politicians. What do you think of the idea that there | :27:44. | :27:47. | |
will be a pooling of the debt and a banking union in Europe S that what | :27:47. | :27:57. | |
:27:57. | :27:58. | ||
you would like to see? I understand exactly why the Germans don't want | :27:58. | :28:01. | |
to get on a permanent subsidy type of relationship in the European | :28:01. | :28:07. | |
Union. The only problem is, there is an old American movie, The | :28:07. | :28:10. | |
Godfather, and the two families are fighting, and they say, look this | :28:10. | :28:14. | |
is the business we have chosen, if you are trying to have a monetary | :28:14. | :28:18. | |
union in which there isn't a fiscal union, we know a lot about how you | :28:18. | :28:20. | |
hold together very different economies, and the problem is, it | :28:20. | :28:24. | |
is not cheap. Either they are going to be permanent subsidies, or there | :28:24. | :28:30. | |
will be a very extended decade-long austerity crisis, in which they try | :28:30. | :28:34. | |
to grind down the wages, or else there is going to be inflation, | :28:34. | :28:38. | |
those are our only choices. This is the missing ingredient, growth. | :28:38. | :28:43. | |
Where is the growth going to come from? Right now Greece, with its | :28:43. | :28:49. | |
austerity package, has lost, in effect, 30% of its output, GDP. | :28:49. | :28:54. | |
That is an incredible adjustment, and you are seeing the results, on | :28:54. | :28:57. | |
the streets. Violence, a society collapsing. What you heard from | :28:58. | :29:03. | |
that Greek newspaper editor is that if there isn't a slacking off, if | :29:03. | :29:06. | |
there isn't extra time for repayment in order to inject some | :29:06. | :29:10. | |
money into the economy, there will be trouble in the streets? That is | :29:10. | :29:15. | |
why there needs to be grand bargain between having fiscal discipline, | :29:15. | :29:18. | |
austerity on the one hand, dealing with the welfare state, pension | :29:18. | :29:22. | |
reform, but at the same time a commitment to growth. That, I would | :29:22. | :29:27. | |
submit, requires Germany to reflait its economy. Which is exactly what | :29:27. | :29:32. | |
Germany is aiming for, the grand bargain, but in politics it is | :29:32. | :29:37. | |
often not possible to strike the grand bargain at one point. It is a | :29:37. | :29:44. | |
process towards that. As to reflating the German economy, they | :29:44. | :29:54. | |
:29:54. | :29:59. | ||
are doing a lot of it. Do you the Germans would be happy to see | :29:59. | :30:03. | |
Greece go and concentrate on Spain? The Germany vision is clear, those | :30:03. | :30:06. | |
who sign up to the rules of the club, and they include those | :30:06. | :30:10. | |
without a big budget deficit, all those countries will be kept in | :30:10. | :30:13. | |
with German help. It is up to the people of Greece to decide, they | :30:13. | :30:19. | |
voted for it. Germany has been benefiting hugely in terms of your | :30:19. | :30:24. | |
exports? It has been benefited by being an open economy versus Europe | :30:24. | :30:29. | |
and the world, it is supporting neighbours in Europe quite a lot, | :30:29. | :30:33. | |
but it asks for a quid pro quo. From where you sit, do you think, | :30:33. | :30:39. | |
as a case of either the euro implodes, or, Germany has to, as it | :30:39. | :30:45. | |
were, pay up, there has to be some grand gesture before the banking | :30:45. | :30:49. | |
union takes place. Germany has to pay up in the short-term? | :30:49. | :30:53. | |
Unfortunately, I think if they haven't gotten to that point, they | :30:53. | :30:58. | |
probably will get to that point quite soon. I think you can see why | :30:58. | :31:01. | |
the Germans are frustrated about the budget deficit issue. But there | :31:01. | :31:06. | |
is a deeper problem, which is that countries are locked in at fixed | :31:06. | :31:09. | |
exchange rates, that are the wrong rates. They are not competitive, so | :31:09. | :31:14. | |
it is going to be really difficult for those countries to grow, or to | :31:14. | :31:18. | |
balance their budgets. If they are not growing, they will not have any | :31:18. | :31:21. | |
improvement in their deficit situation. That was an inherent | :31:21. | :31:25. | |
problem, wasn't it? Right from the outset, yes it was. Let me be clear, | :31:25. | :31:29. | |
I don't want to sound too hard on the Germans here. We need to | :31:29. | :31:33. | |
remember that Germany, under Chancellor Schroder, took some very | :31:33. | :31:39. | |
tough decisions in terms of reforming labour markets and having | :31:39. | :31:42. | |
wage restraint. You can understand why the Germans feel frustrated and | :31:42. | :31:46. | |
why it is so difficult for Chancellor Merkel to sell what will | :31:46. | :31:50. | |
be necessary to save the euro. if you look at the results, first | :31:50. | :31:55. | |
of all, you see, that whenever the crisis came to a head, the Germans | :31:55. | :32:00. | |
did offer more. They just have to see the other side of the bargain | :32:00. | :32:06. | |
before they do it. And as to the German experience, it is definitely | :32:06. | :32:10. | |
reforms pay off. What we are seeing across much of the eurozone | :32:10. | :32:15. | |
periphery, is now the kind of labour market reforms, situation of | :32:15. | :32:19. | |
improving competitiveness, that will likely to turn Spain and Italy | :32:19. | :32:28. | |
into booming economies in a while. How -- How do you deal with the | :32:28. | :32:33. | |
debt mountain, are the Germans prepared to write it down 60% to | :32:33. | :32:37. | |
mutualise it, so these countries have some way of surviving. Would | :32:37. | :32:41. | |
you be prepared for a broad writedown? I don't think there is a | :32:41. | :32:45. | |
need. Spain has less public debt than Germany and Britain. What we | :32:45. | :32:49. | |
need is a firewall against financial market panic, that is the | :32:49. | :32:53. | |
European Central Bank. And fiscal and labour market reforms, which is | :32:53. | :32:57. | |
what Spain is getting. And we need to deal with the banks. The | :32:57. | :33:07. | |
Americans dealt with the banks. In 2009, the Europeans poo pooed it as | :33:07. | :33:10. | |
a marketing idea, and two years on we are still in this place. | :33:10. | :33:15. | |
In modern Egypt, there have always been two significant, often | :33:15. | :33:18. | |
adversarial powers, the military, the backbone of the state, and | :33:19. | :33:25. | |
religion, lately in the form of the Muslim Brotherhood. The two are in | :33:25. | :33:31. | |
the run-off for the presidency. It seems the Brotherhood may have won, | :33:31. | :33:35. | |
but it is increasingly doubtful if the army is prepared to hand over | :33:35. | :33:42. | |
real power. 18 months ago in Tahrir Square | :33:42. | :33:46. | |
behind me, there was a drama that caught the imagination of the world. | :33:46. | :33:54. | |
The Egyptian revolution. There was a blueprint set out for how power | :33:54. | :33:57. | |
was to be transferred. That involved the ousting of President | :33:57. | :34:00. | |
Mubarak, the holding of parliamentary elections, and the | :34:00. | :34:04. | |
climax of the process, at the weekend, the holding of these | :34:04. | :34:07. | |
presidential elections, in their second round. What became clear, | :34:07. | :34:14. | |
though, as the weekend unfolded, was those two key forces would | :34:14. | :34:18. | |
fight for the destiny of the nation, but the Muslim Brotherhood and the | :34:18. | :34:24. | |
military had very different ideas how this would end. This is Zagazik, | :34:24. | :34:29. | |
a Nile delta town, far from Tahrir Square, where we watched the | :34:29. | :34:32. | |
weekend's voting with all the telling symbolism. The polling | :34:32. | :34:36. | |
station was secured by the army. Knowing an important voter was on | :34:36. | :34:41. | |
his way, the Colonel in charge posted an armed soldier to stand | :34:41. | :34:46. | |
guard over the ballot box. There was outrage. The law says the army | :34:46. | :34:51. | |
shouldn't be inside the actual voting room. But, the soldiers | :34:51. | :34:54. | |
stayed. Rules though, were being bent here | :34:54. | :34:58. | |
by the Muslim Brotherhood too. We're not actually supposed to be | :34:58. | :35:05. | |
in here, we didn't get all the accreditations that Egyptian | :35:05. | :35:10. | |
officialdom demands for filming in a polling station. But a member of | :35:10. | :35:13. | |
the Muslim Brotherhood has wafted us in, and in the process, | :35:13. | :35:18. | |
demonstrated their power. Then the tumult moved outside. Mohammed | :35:18. | :35:21. | |
Morsi was arriving, the presidential candidate from the | :35:21. | :35:26. | |
Brotherhood. It was his turn to define the moment. He joined the | :35:26. | :35:31. | |
queue taking more than an hour to vote. | :35:31. | :35:36. | |
The Brotherhood has waited 84 years to govern Egypt, a few more minutes | :35:36. | :35:40. | |
hardly mattered. Casting his vote at last, Dr Morsi | :35:40. | :35:44. | |
could underline the contrast with his rival, who, elsewhere, swept | :35:44. | :35:49. | |
straight to the front. But if this gesture was meant to | :35:50. | :35:55. | |
sway ordinary Egyptians, one who had been further down the cue, | :35:55. | :36:01. | |
wasn't having it -- queue, wasn't having it. After they destroyed | :36:01. | :36:07. | |
everything, we need a strong man. I said Mr Shafiq is a stronger man. | :36:07. | :36:11. | |
The confrontation between an authoritarian establishment and the | :36:11. | :36:16. | |
Brotherhood, has been sharpened by a court decision, dissolving the | :36:16. | :36:21. | |
parliament, elect just months ago. He asked one of the Brotherhood's | :36:21. | :36:24. | |
unseated MPs, whether they think Egypt's military has any intention | :36:24. | :36:30. | |
of letting them run the country. TRANSLATION: The Military Council | :36:30. | :36:34. | |
has said over and over that they are unbiased towards all the | :36:34. | :36:39. | |
candidates, that is what we hope for. | :36:39. | :36:42. | |
They should fulfil their role in protecting the country, they have | :36:42. | :36:45. | |
announced they will support the candidate who win, I hope that is | :36:45. | :36:54. | |
what they will do. Not far way is Herriya, it is rural | :36:54. | :36:57. | |
Egypt, where people struggle on the bread line. Many familiar lose here | :36:57. | :37:03. | |
are sustained on a few pounds per day. Once underground, the | :37:03. | :37:06. | |
Brotherhood and its charities have been working openly for the past 3 | :37:07. | :37:11. | |
years. It helps people with -- 13 years, it helps people with you | :37:11. | :37:16. | |
money and good works, that earned Dr Morsi the support of many. | :37:16. | :37:19. | |
TRANSLATION: We believe Dr Morsi will make a difference. He comes | :37:19. | :37:24. | |
from a village nearby, he understands our problems. | :37:24. | :37:34. | |
:37:34. | :37:37. | ||
TRANSLATION: I voted for Dr Morsi, so he would improve the country. | :37:37. | :37:42. | |
Gotd will give the election to the person who deserves it and the | :37:42. | :37:46. | |
youth will find jobs. A few miles away from the candidate's birth | :37:46. | :37:52. | |
place, support is not solid. The Brotherhood accuses supporters of | :37:52. | :37:55. | |
the rival candidate of rationing water to the farmers in a bid to | :37:55. | :38:00. | |
get their votes. We were finding farmers saying they wouldn't vote | :38:00. | :38:08. | |
at all. TRANSLATION: I have never voted and I never will. If all the | :38:08. | :38:11. | |
candidates want is power, then I say God take them now before the | :38:11. | :38:21. | |
:38:21. | :38:24. | ||
result has come out. Take his soul away. That other precious liquid, | :38:25. | :38:28. | |
petrol, is in short supply here. They don't like foreigners filming | :38:28. | :38:35. | |
this kind of thing. Months of political turmoil have | :38:36. | :38:40. | |
left people tired and edgey, and we seemed to be part of that problem. | :38:40. | :38:50. | |
:38:50. | :38:51. | ||
No, no, no. Many have ceased to believe that | :38:51. | :38:56. | |
politics is the way back to normalty. Turnout was low, under | :38:57. | :39:00. | |
50%. And the Armed Forces seemed to have gambled that their latest | :39:00. | :39:04. | |
steps wouldn't touch off a strong reaction. We met a key former | :39:04. | :39:09. | |
general at the Cairo Yacht Club, a place frequented by the city's | :39:09. | :39:12. | |
elite. Even just before the polls had closed, it was becoming clear | :39:12. | :39:17. | |
that the military intended to draft the new constitution, retaining | :39:18. | :39:21. | |
sweeping powers, if Mohammed Morsi, the Brotherhood man, won the | :39:21. | :39:26. | |
election. Dr Morsi has insulted the army when | :39:26. | :39:31. | |
he mentioned that if he comes as President of the Country, he will | :39:31. | :39:39. | |
make many changes in the army, and fire some generals, and he would | :39:39. | :39:42. | |
shuffle the high ranking officers and all that kind of stuff. What is | :39:42. | :39:46. | |
the right balance of power do you think, between the military and the | :39:46. | :39:49. | |
civilian leadership in this country? They will insist to have | :39:50. | :39:57. | |
two things in the institution, in regard to the army. The first one | :39:57. | :40:03. | |
is the President cannot declare war against any country, unless goes | :40:03. | :40:10. | |
back to the army and consults them first. Number two, is the military | :40:10. | :40:16. | |
budget. Now there is a lot of talk here in Egypt about the issue of | :40:16. | :40:20. | |
the military budget has to be announced clearly, publicly, to | :40:20. | :40:26. | |
everybody. I don't think they like that, I don't like that, personally. | :40:26. | :40:31. | |
As polling was coming to an end. We dropped in the headquarters of | :40:31. | :40:35. | |
Ahmed Shafiq, the former air force General, whose the country's | :40:35. | :40:45. | |
establishment had pinned their hopes on. The contrast with Dr | :40:45. | :40:53. | |
Morsi's team, well to do ladies and others have been among the great | :40:53. | :40:57. | |
supporters. The Egypt I used to know is centuries old and is my | :40:57. | :41:01. | |
Egypt. But for the other candidate I don't know what it's going to be. | :41:01. | :41:05. | |
But it won't be like the Egypt I used to know. But something wasn't | :41:06. | :41:10. | |
right. A report came in that the Shafiq campaign had failed to post | :41:10. | :41:16. | |
observers at many polling stations. It was an embarrassing lapse. | :41:17. | :41:20. | |
The low turnout would mean the winner could hardly claim to have | :41:20. | :41:25. | |
the country behind him. As this process comes to its climax, | :41:25. | :41:30. | |
the striking thing is the degree to which the Egyptian people seem to | :41:30. | :41:34. | |
have lost the enthusiasm that was being expressed little more than a | :41:34. | :41:41. | |
year ago in Tahrir Square. There is widespread apathy, cynicism, and it | :41:41. | :41:48. | |
has taken the shine off this process. | :41:48. | :41:52. | |
After dark, the military issued its new decrees, despite months of | :41:52. | :41:57. | |
insisting it wouldn't wait to hand the ship of state to an elected | :41:57. | :42:01. | |
helmsman, it seized essential Government powers, those of | :42:01. | :42:10. | |
legislation and budget. Captain Hassan has been skippering | :42:10. | :42:14. | |
Nile pleasure boats for 18 years. He had wanted Mr Shafiq to win, and | :42:14. | :42:21. | |
he didn't fancy trading places with the new President. | :42:21. | :42:24. | |
TRANSLATION: I'm the boss of the boat, he's the boss of the country. | :42:24. | :42:27. | |
I'm only responsible for what happens on this boat. He's | :42:27. | :42:37. | |
:42:37. | :42:37. | ||
responsible for the country. This boat offers fine dining, | :42:37. | :42:47. | |
traditional music and belly dancing. The tourist trade has already dived, | :42:47. | :42:51. | |
so most of these customers were Egyptians. | :42:51. | :42:58. | |
But now even they, fearing rising crime, are going out less. So this | :42:58. | :43:03. | |
show struggles on, and Egypt itself continues its national duet, | :43:03. | :43:13. | |
:43:13. | :43:15. | ||
between generals and Islamists. One that is entering a new and more | :43:15. | :43:18. | |
dangerous phase. Just coming to you now, what is the | :43:18. | :43:23. | |
latest what will happen dou, think, tonight? Dr Morsi is pretty clearly | :43:23. | :43:27. | |
the winner. The army said today they will hand over the power of | :43:27. | :43:33. | |
the presidency to him at the end of June. But all of these amendments | :43:33. | :43:39. | |
and restrictions they have put on the constitution and the drafting | :43:39. | :43:44. | |
of the new constitution means he will be a pretty powerless figure. | :43:44. | :43:49. | |
So the Muslim Brotherhood has called a million man march tomorrow, | :43:49. | :43:55. | |
it has said MPs will have a sit-in Tahrir Square until they change the | :43:55. | :43:59. | |
parliament. The stage is set for confrontation between the two for | :43:59. | :44:03. | |
example but the army hoping recent signs of apathy, including low | :44:03. | :44:09. | |
turnouts when the Brotherhood has called protests before, shows that | :44:09. | :44:14. | |
the country hasn't the stomach to back them in the quest for real | :44:14. | :44:19. | |
power. The last thing in Tahrir Square is the army didn't move on | :44:19. | :44:21. | |
the protestors. If the Muslim Brotherhood is calling for a | :44:21. | :44:26. | |
million men on the street, will the army stand back? I think what is | :44:26. | :44:30. | |
most likely to happen is the Brotherhood will have difficulty | :44:30. | :44:33. | |
producing the huge numbers it says it is calling on to the streets. | :44:33. | :44:36. | |
That is the evidence of all the recent demonstrations when they | :44:36. | :44:43. | |
have tried to do that. There will be some sort of arbitrage. Lots of | :44:43. | :44:46. | |
questions are unclear, particularly about the drafting of the new | :44:46. | :44:50. | |
institution, whether MPs might be able to go back to the parliament. | :44:50. | :44:54. | |
I think what will happen is some form of negotiation empowered with | :44:54. | :44:59. | |
mass protests, with counter moves by the army, in which these two | :44:59. | :45:09. | |
forces continue struggling to try to divide power. It could be Dave | :45:09. | :45:15. | |
and hot summer here. We go straight to Cairo to speak to a | :45:16. | :45:23. | |
representative of the Muslim Brotherhood, and to Washington to | :45:23. | :45:27. | |
speak to Philip J Crowley. It looks like you have won, you are asking | :45:27. | :45:32. | |
for a million people out on the street tomorrow, are you expecting | :45:32. | :45:38. | |
a peaceful protest? Unfortunately, not all the facts have been | :45:38. | :45:43. | |
properly portrayed. The call for the million man march tomorrow was | :45:43. | :45:51. | |
done by a different group and the Muslim Brotherhood backed it. This | :45:51. | :45:56. | |
march is in protest for the various declaration, including the | :45:57. | :45:59. | |
constitutional declaration that the army has issued yesterday, as well | :45:59. | :46:04. | |
as the verdicts and different laws issued today by the SKAF council, | :46:04. | :46:08. | |
all of which are unlawful and illegal and have no basis. It looks | :46:08. | :46:12. | |
like your man has won, but the danger is he will have won very | :46:12. | :46:15. | |
little, because if you cannot change the constitution, if you | :46:15. | :46:20. | |
can't change the military budget, if you can't change the security | :46:20. | :46:26. | |
issues, he will have no power? self-appointed, or the Mubarak- | :46:26. | :46:30. | |
appointed SKAF council is issuing all of these, it cannot overturn | :46:30. | :46:34. | |
the voting power of the parliament or the President. This is a | :46:34. | :46:38. | |
people's-elected choice. Both the parliament and the President and an | :46:38. | :46:43. | |
opinion or decree from an appointed council, cannot overturn or be | :46:43. | :46:46. | |
above the will of the people. We standby this and believe parliament | :46:46. | :46:50. | |
is still in session, as well as all of the powers. The point is | :46:50. | :46:54. | |
parliament has been dissolved on a technicality, parliament is not in | :46:54. | :46:58. | |
session? That is not quite true, there was a verdict by the | :46:58. | :47:01. | |
constitutional court for the dissolvement of parliament. This | :47:01. | :47:08. | |
has been acted on by SKAF as if it is a Israelty. The head of the | :47:08. | :47:13. | |
parliament has -- reality. The head of the parliament has announced it | :47:13. | :47:17. | |
on television and all parties have denounced the same accusations and | :47:18. | :47:22. | |
declarations from SKAF, we will take this according to the next | :47:22. | :47:26. | |
chapter of negotiations and discussions with SKAF and what will | :47:26. | :47:30. | |
happen next with it. From where you are sitting, this looks incredibly | :47:30. | :47:34. | |
volatile, what do you think the west should do about this? Well, it | :47:34. | :47:39. | |
is the worst possible outcome, in terms of say the United States | :47:39. | :47:43. | |
having promoted and encouraged Egypt to go through a democratic | :47:43. | :47:47. | |
transition, it appears there will be a transition, but it will not | :47:47. | :47:52. | |
necessarily be democratic. The problem right now is you do | :47:52. | :47:57. | |
have a crisis of governance. Unfortunately you don't necessarily | :47:57. | :48:00. | |
have an institution that can resolve this confrantation. We in | :48:01. | :48:05. | |
the United States, 2 -- confrontation. We in the United | :48:05. | :48:11. | |
States had a case two years ago called Marbury versus Madison, when | :48:11. | :48:17. | |
you have a conflict between the legislature and the party, the | :48:17. | :48:24. | |
court steps in. When you have a nominally dissolved parliament, you | :48:24. | :48:28. | |
don't necessarily have an institution to resolve it. It is a | :48:28. | :48:34. | |
lot of complexties about how Dr Morsi will respond to it and SKAF | :48:34. | :48:38. | |
and what the nature of it will be. The Muslim Brotherhood looks like | :48:38. | :48:44. | |
it has won the election, should President Obama endorse Dr Morsi? | :48:44. | :48:53. | |
Well, we will see to what extent it is judged to be free and fair. From | :48:53. | :49:00. | |
every indication this is a reasonable result. The question is, | :49:00. | :49:03. | |
you have an elected President, what kind of powers will he have? The | :49:03. | :49:06. | |
dilemma for the United States, having a strong relationship with | :49:06. | :49:13. | |
the Egyptian military. Yet up the military basically saying -- yet | :49:13. | :49:17. | |
you have the military basically saying we are above the law and we | :49:18. | :49:22. | |
don't believe in the civilian laws will present a policy problem for | :49:23. | :49:26. | |
the United States. Will you be calling on the support of President | :49:26. | :49:34. | |
Obama and America? Of course we will be calling for support all the | :49:34. | :49:37. | |
Allies of Egypt who have declared their support publicly for the | :49:37. | :49:40. | |
democratic transition of Egypt. What happened in the last couple of | :49:40. | :49:46. | |
days is nothing short of a military coup. We believe that any power | :49:46. | :49:52. | |
standing by the value of demok say wants to uphold it around the -- | :49:52. | :50:01. | |
democracy wants to uphold it around the world, should standby us. I | :50:01. | :50:06. | |
would like to also correct your point that this is not a | :50:06. | :50:11. | |
confrontation between the military and religion. It is a conflict | :50:11. | :50:14. | |
between military dictatorship and civilian democracy. We believe the | :50:14. | :50:20. | |
entire international world, that upholds the genuine true value of | :50:20. | :50:25. | |
democracy, should support Egypt and provide a peaceful end to this | :50:25. | :50:30. | |
conflict. That's all from Newsnight tonight. | :50:30. | :50:40. | |
The death of Welsh actor of Brian Hibbard. Here he is in 1963, with | :50:40. | :50:50. | |
:50:50. | :50:51. | ||
ace axe pel la group named after the miners striking. | :50:51. | :50:54. | |
# Looking from a window above # It is like the story of love | :50:54. | :50:58. | |
# Can you hear me # Came back only yesterday | :50:58. | :51:04. | |
# Moving further away # Want you near me | :51:04. | :51:10. | |
# All I needed was the love you gave | :51:10. | :51:17. | |
# All I needed for another day # And all I ever knew | :51:17. | :51:27. | |
:51:27. | :51:30. | ||
A fine spell of weather, although brief, sunshine to look forward | :51:30. | :51:33. | |
through the day. We will start the day with some showers across | :51:33. | :51:36. | |
Scotland. Transferring their way west to east. Most other places | :51:36. | :51:41. | |
will settle into a reasonable afternoon. A bit of fair weather | :51:41. | :51:46. | |
loud inland, the odd isolated shower. Nearly all of us will avoid | :51:46. | :51:50. | |
these. Racing at Ascot will dodge the showers. Light winds, sunny | :51:50. | :51:54. | |
spells, temperatures nudging 20 degrees. That sunshine is strong at | :51:54. | :51:59. | |
this time. If you are heading to the beach it is good across the | :51:59. | :52:06. | |
south west of England and Wales. Some of the best sun on the coast. | :52:06. | :52:09. | |
The odd isolated showers over the high ground. For Northern Ireland a | :52:09. | :52:12. | |
few showers, but not of the intensity which we saw during the | :52:12. | :52:16. | |
course of the day. A good few of us will stay drive. For Scotland most | :52:16. | :52:20. | |
of the showers on the eastern side, the odd sharp one, not ruling out | :52:20. | :52:24. | |
thunder here. Some sunshine inbetween. Further ahead to | :52:24. | :52:27. | |
Wednesday, another fine day for most of us, temperatures just on | :52:28. | :52:32. | |
the rise, up into the high teens, and the low 20s in some places too. | :52:32. | :52:38. | |
One or two spots could reach 22 or 24 degrees. Wednesday the best day | :52:38. | :52:43. |