With Evan Davis. How worrying is the state of the world economy? The siege of Madaya, transcripts between Blair and Clinton reveal closeness, and Andrew Davies on adaptation.
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First week of the year, and it's not looking good
This year opens with a dangerous cocktail of new threats
For Britain, the only antidote to that is confronting complacency.
We'll ask if the next leg of the protracted sequence of global
Shocking footage from Syria draws attention to the latest horror
to afflict certain towns in the country -
After January, I'm available for
I wouldn't say that, or you'll be doing it.
Newly-published transcripts reveal a new contender for the greatest
Veteran script writer, Andrew Davies, talks us
Sex is terribly interesting to everybody.
Stock markets falling - especially in Shanghai.
Oil prices falling to shockingly low levels.
of a devaluation war in Asia which has all sorts
No wonder that Chancellor George Osborne thought it might be prudent
Anyone who thinks it is mission accomplished with the British
Or it will be the year we look back at
Yes, listen, and you'll hear the distinct sound
Remember, after the crash, its economy, and those
of other emerging nations, were the great hope.
And there are worries about the debt that accumulated in the years
In some ways, you can see the latest concerns as part of a pattern that
Go back to Japan in the 1980s, it was the world's beacon of growth
It was underpinned by credit growth and a property and stock market
They don't think the market is transparent enough. They don't
understand what is going on. The Japanese stock market
peaked at 39,000 in 1989. Today, two and half decades later,
it's at less than half that level. But while Japan had a hangover,
the world carried on turning, But they soon imploded
into a regional crisis Some of us are old enough to have
reported on it. The problems with Asia and the banks go far wider and
deeper than Japan. Just as El Nino is creating chaos in the weather
system, a global storm is staring in the world economy, coming from the
Pacific region. The number of countries that got into trouble in
Asia, borrowed money from the rest of the world. There were some common
themes and the most important was that they had all been on a private
growing binge. Over to the west, another bubble -
the dot com boom. A surge in optimism, growth
and subsequent disappointment. The west weathered the dot com crash
comfortably thanks to low interest rates and growing debt
that fuelled growth. Which kind of almost
brings us up to date. China was the post-crash
poster child. They were going to be
a market for the west, languishing in stagnation
and having to sort out debts. And yes, China did keep
going but now even it is running The fear is always that
you have not just a boom-bust cycle which is as old as the hills -
it's the boom underpinned by borrowing, with debts making
the subsequent bust all the more And the issue is, is there a bit
of that in China now? Look back at the last decade, debt
in China has been growing, fuelling growth. It is not clear the debt
will be paid back. You can't go on fuelling the economy by letting debt
rise like that for ever. China is resonating the kind of financial
crisis we have seen in the past in other parts of the world, which is
that it is starting to look quite shaky on the basis of an unstoppable
build-up in credit creation and debt. The government should step in
to break it and stop it. The story is that while China's
factories keep producing - overproducing perhaps,
the world has been struggling to buy all the stuff that it's
capable of churning out. We know how to spend,
but not how to then pay There is a cocktail of pernicious
things going on in the global economy, which has to do with the
legacy of past access. So, in the Western world, we are still dealing
with the consequences of our own financial crisis which was caused
why excessive credit. In the emerging countries today in general,
particularly in China, they are having to deal with the consequences
of excessive credit creation. So many economic crises -
is another one due? In a moment we'll be discussing how
worried we should be with two big beasts of the economic jungle,
but first, let's focus for a moment on the situation
in China with the BBC's Asia Business Correspondent
Karishma Vaswani. The stock market is what they are
feeling at the moment and it has been pretty remarkable, having to
shut down as soon as they opened? It has been a remarkable start to the
New Year. On Monday when trading first started, the circuit breaker
mechanism the Chinese authorities put into place, that kicked in
shutting trading down for the day on Monday. Things looked better on
Tuesday, but on Thursday, we saw this happen again. 29 minutes of
trade, the shortest trading day in China's history of the stock market.
Pessimism and anxiety investors. Give us a little bit on the exchange
rate. It is complicated in China, two exchange rates. There is a fear
of an exchange rate war going on in that region? Basically what has
happened is the feeling is the central Bank of China allowed the
currency to depreciate to rate we haven't seen since 2011. Other
countries in the region become less competitive. Many of these countries
in Asia have benefited from the economic boom we have seen in China
over the last decade. Think of Australia, Indonesia, Malaysia,
selling the commodities to the hungry giant China is. As a result
of this effect give devaluation there are concerns we could see a
currency war across the region forcing other countries to try and
lower their currencies at a time when the US is raising interest
rates 's. Looking at it briefly, to what extent have the authorities in
China run out of tools to get growth. You cannot just keep using
monetary creation? They made the decision today to suspend the
circuit breaker mechanism on the stock market. It shows they are
running out of ideas. There is a lot of speculation in China that they
don't know what to do next. In the weeks to come, we will start to see
more moves from the regulators there. Thank you very much.
I'm joined now by Adair Turner, a former chair of the Financial
Services Authority, who has written a book about our pact with debt.
And Rupert Harrison, who until 2015, was the chief of staff
This thesis there is a link between this crises and China, do you buy
it? Yes, I assert in my book it is there. You look at the fundamental
cause of the financial crisis in 2008, it is driven by the fact that
private debt in the advanced economies had gone from 50% of GDP
in 1950 to 170% of GDP in 2007 and grew pretty much every year for
those 57 years. What has happened since 2008 is the debt hasn't gone
away, it is just shifted around. In the advanced economies we have
achieved a very small amount of reduction of debt to GDP in the
private sector, offset by a big increase in public debt. Then we
have had a big shift of debt to the emerging markets and in particular
to China. Essentially that growth of the Chinese debt was deliberately
planned by the Chinese authorities in 2009 as the mechanism to offset
the dangerous impact for the economy of the crisis in the West. But it
has got to a stage now, where it is out of control and that
extraordinary investment boom, in particular a construction boom has
come to an end and we are facing the deflationary consequences of that.
This pattern isn't over yet and the total level of debt has just gone up
and up. Rupert, do you buy the Chinese problem, because most of us
are focusing on the stock market and interest rate, do you think deep
down there is a problem like there is in other places? Absolutely, in a
sense it was caused or at least exacerbated by the Chinese response
to our financial crisis. But I think China would have had to go through
something like this anyway. It is making a transition like many other
countries to growth not based on consumption. They exacerbated the
scale of the problem they had to face. They would have had to face it
anyway. The question is in all market economies, do we have debt
crises and financial crises, the answer is yes. As the world the only
way to make growth? Going back to Japan, you have had a beacon of
global growth getting into crisis and then another one runs with it
and builds up credit. Who will pick up the growth if China stops growing
and becoming the kind of spender of last resorts to the world? In a
sense, China's slowdown is nothing new. It probably started two years
ago. The story of 2015 is a economies like the UK, the US and
increasingly be eurozone, eked out decent growth, unemployment coming
down at a time when China was slowing dramatically. I don't think
we should be too pessimistic of our ability to grow without China. I
think the UK economy is doing OK, but only OK. The latest figures show
we grew by 2.1% last year. You have to allow for the fact we have a
population growing up .6% per annum. If you turn into the growth of
income per capita, it is only 1.5%. That has just got back to income
standards very slightly above the 2007 peak. This is getting on for an
entire decade, in which capitalism has failed to do what we thought it
would do before, which is to deliver at least over a decade period of
time, growth in income standards. Even in the US, which has been the
most successful recovery from 2008, this has been a mediocre recovery
compared with what the US economy used to do. At the core of that is
what is called the debt overhang. Is there anything new about that?
People have put together data that goes back a long way. The financial
crises have been part of capitalist economies for centuries. We know
recoveries from deep financial crises like the one we had, take a
long time. Over centuries, the human progress and wealth creation has
been unprecedented. It means the machine is running out of steam?
This has occurred at a higher level of debt than any since 1929. Very
briefly, do you have an idea for how you can have growth without
encouraging consumers to spend more? I have a radical proposal, there are
some circumstances in which your deflationary problems are so deep
you should run increased public deficit and funds them with central
bank money. You print the money and explain it you want to print money
rather than borrow it and get the growth without the borrowing? Yes
that's right. Whether you think that is a good idea or not, I will give
you a prediction one country of the world will do that, that country is
Japan, because it has a level of debt which it can not possibly pay
back. You said you didn't believe that bit. That that is the only way.
The UK and United States economies demonstrate what needs to be done.
The recovery has been slow, but it has been par for the course. The
only way way to grow is what has been happening, inVoe vat and in--
innovate and invest. Should we be worried in conditions in the world
are poor to get growth we are going to resort to consumer spending,
shopping, borrowing. There is a myth that the recovery has been debt
fuelled. We can do it. And you know of course there are risks, China is
a risk, or other risks. The other lesson is you can have long
upswings. The big question is as we remove the fiscal stimulus and one
reason that has kept the UK economy going over the last five years is a
very big fiscal stimulus, even within the austerity which George
Osborne and Rupert were responsible for, that was a reduction in the
level of deficit, but it was still a big deaf #1i9. Ficit. Then we will
only be only grow by returning to private credit growth and that what
is the Office of Budget Responsibility forecast for the next
five years will be the case. Degrees of pessimism and optimism. Thank you
both very much. We've become used to seeing some
dreadful images coming out of Syria, but today distressing footage has
emerged that still has The situation in Madaya,
a town of 40,000 people that is just 15 miles
north-west of Damascus, is known to be dire -
it has been besieged for months, and people left there
have nothing to eat. Residents say they've received no
food aid since October and some have Well, images released by opposition
activists give some indication as to the suffering
that is resulting. This footage released by
the Syrian American Medical Society shows a young boy called
Mohamed Eysa, who tells us he hasn't I'm afraid we don't know any
more about this child, Finally, here you see
a banner in English - the adults desperate at least
to save the lives of the young ones and draw attention
to their situation. Activists say up to 40
civilians have now died, either from starvation and lack
of medicines or from trying The better news today,
is that the United Nations says the Syrian government has agreed
to allow humanitarian aid We need to be clear though,
that while we have these pictures from Madaya,
this is not the only town Dr Ammar Ghanem is
originally from Madaya. He now works for a charity called
the Syrian American Medical Society and is in regular touch
with relatives from the town. Thank you for joining us. You're in
contact with the town. Your town. What can you tell us about what is
happening there? Well the situation is really above description. The
siege started in and has continued for 200 days. In the last two months
it's Ca lated. Now nothing is allowed come in or go out. The
regime has tried to put the check points in every entrance to that
area and the rest of border is planted with land mines. Who anybody
who will think about escaping will face his death and anybody who wants
to choose to stay will die from starvation. We are seeing pictures
today, but let's be clear we are only talking about it because we are
seeing the pictures, but this situation is not one that has just
occurred, and it is not the only place, Madaya? Yes there is multiple
areas like Madaya, but the only situation is more difficult than
other places. Gota is a larger place and they can plant and eat. Madaya
is a small area and people are forced to be in that prison without
any resources. So what about if you take a large number of the
population and put nit jail and say you're not going to have any food or
water and you let them die. That is what is happening in Madaya. We have
heard food will go in, but they're talking about that taking a few
days. Doctors as I understand it say every day now means fatalities.
Definitely. We started fatalities, we have a report from December, with
a documented 30 cases of death from hunger and starvation by names and
ages and each day we have more documented cases that die from
hunger. If we delay, we will talk about more people dying. Who will be
responsible for this. It is remarkable that in 2016 that
starvation is being used as a weapon of war. It is not just if Syrian
Government using that weapon, the UN says others been using starvation
and south-east and siege as weapons. Yes and it has nothing to do with
the conflict. No matter what the conflict is about. Why don't we
leave the civilians alone? They're humans and they want to live and to
take care of their children. So we need to leave them alone. The
situation here is another holocaust, like what happened to the Jews
before it can happen to Madaya people. This is happening in the
21st Century in front of our eyes. We ch see this through the social
media and the internet and we allow it to happen. Thank you and we know
that situation is getting more attention now. Thank you.
Well, that potentially makes more poignant the issue of Europe's
response to the humanitarian crisis in Syria, and the migrant crisis
At the time, Hungary was much criticised for its allegedly
not-very communitarian response to the crisis,
implacably opposed to the open border stance of the Germans,
keener than anyone on deploying copious quantities of fencing.
But in Germany right now, there are tensions
following the disorder in Cologne and other cities on New Years Eve
and other countries in the EU are now themselves rediscovering
their national borders, Sweden, Denmark for example.
Is the criticism of Hungary being revisited?
Mark Urban has been weighing up the arguments.
Europe's migration crisis keeps prompting nations
to do their own thing, while paying lip service
to the decisions reached collectively.
For Germany, that is a danger to the Schengen system of borderless
travel and European unity more widely.
TRANSLATION: I don't issue any concrete warnings here or say
what happens if, but I do say a Schengen
system can only work if there is joint responsibility
for taking in refugees and joint responsibility
Recriminations continue about the violent disorder
in Cologne, Stuttgart and Hamburg on New Year's Eve.
Was it mass sexual assault, were most of
the perpetrators asylum seekers or not?
As questions multiply, so too the political cost
for a Chancellor who accepted more than one million migrants.
There are divisions within the Christian Democrat Party.
I am not quite sure the Socialists are quite as united as they appear.
The one group which clearly is united are the German left,
but I think there are divisions in Germany, we have elections soon,
we will see how they work out.
At the moment I would still put money on
Merkel, but maybe less money than I would have done
Earlier this month Sweden put controls
The Danes have in turn now said they will be putting them
France meanwhile retains its border checks put in place after the Paris
attacks and other two Schengen signatories,
Austria and Slovenia, have now erected a border fence
As well as those internal checks, countries on
Europe's periphery have been putting fences too,
trying to keep migrants out and increasingly that approach
called Fortress Europe by some is seen as key.
Yes, I think that the Germans care about that.
Our citizens enjoy the abscence of internal border control
between Schengen states in Europe, but they
and only if external border control works and then internal border
Today, other European leaders are more
David Cameron voicing support for a comprehensive policy
to limit the flow of Syrians into Europe.
I quite agree with Victor that Europe needs strong external
borders and those that help provide those strong external borders
I believe are doing very much the right thing.
Much now depends on EU plans for a new border force and a deal
with Turkey to cut the flow of people to the Greek islands.
But neither promises to be a perfect solution.
Thousands of refugees are still making the journey weekly
and Europe's nations are still struggling to agree how
I'm joined from Spain by Peter Sutherland,
the United Nations Special Representative
of the Secretary-General for International Migration.
Can you give us a comment on what happened in Cologne and other German
cities, that seems to have thrown a new perspective on the the issue for
some people in Germany. The simple answer is I can't comment on it. The
German police have not commented fully on it. It is being
investigated. The numbers involved in the appalling hooliganism that
took place, where they came from and so on is an issue which can only be
resolved through proper judicial and police mechanisms of decision-making
and to make a comment on it and to apply a responsibility to any one
particular group will I think be quite wrong for somebody who doesn't
know the answer to it. I find hour and I must say this if I may at this
stage, I find this debate about borders, border controls, Razor wire
borders in the context of what you have shown in terms of what is
happening in Madaya and the fact that we are getting a hundred
thousand Syrian refugees, let's stop talking about migrants, the vast
bulk of these people are escaping persecution, our only concern should
be the humanitarian concern of doing about it, rather than having wires,
fences and borders to stop people moving across borders. Of course you
have to have at the borders of the European Union a proper assessment
of whether people are genuine refugees, but if they are, we are
all morally and legally obliged to let them in. And there can be no
comparison between the generosity of Germany, which has been obvious, and
the very opposite position which has been taken by Hungary in terms of
razor wire fences. Is there a dilemma, you can have a country like
Germany that lets in a million refugees and you have a incident
like Cologne and the beneficiaries to that are parties that benefit are
parties to the right that will stir up racial and ethnic tension and
they may be telling you there is a capacity for a country to absorb
refugees without tension, but if you bring a in too many you will create
dischord where there was Harman -- harmony. That is the challenge to
advance the more balanced view that can be advanced about the problems
that we are trying to resolve, the suffering of refugees, does this
generation of Europeans wish to be marked as earlier generations were,
with their refusal to take in genuine refugees. I'm not talking
about people who are not genuine refugees. But they have to take on
the debate. With the far right parties. Which are emerging all over
Europe and are growing and will no doubt be stimulated by events such
as those that took place in Cologne if they can be blamed on migrants.
But they have to be taken on. And not simply kowtowing to the argument
that we should put up borders all over Europe when our great source of
pride was that we had removed them. Does this not strengthen the David
Cameron argument that it is not about helping 200 thousand migrants
who got on boats and came to Europe, but it is about helping the millions
who are there in the region, in Lebanon or in parts of Syria. Is
that not the approach that doesn't allow the far right to benefit from
this and also helps more people? Of course we should be helping those
particularly in Turkey and in Lebanon who are taking, in the case
of Turkey, 2 million refugees and over 1 million in the Lebanon on.
But let me ask this question, 100,000 arrived in Greece in the
last short period. What is to happen then, are they to lie on beaches?
Are they to war, as 77% of them have done, up through the Balkans to be
blocked by razor wire fences. Are they to be lodged in camps and
locked into them? Or, are we to welcome them? Those are the only
alternatives, apart from sending them back to what you have just
shown on your television. That is not answerable other than by the
answer that we have defined away. Germany has given far more, as had
Sweden and many others in Europe in terms of giving places to refugees.
It is causing political difficulty in Germany to continue this when
others aren't doing this. Peter Sutherland, thanks.
He knows how to tell a story and he knows to make sure there's
sex appeal up there on the screen when he does.
Andrew Davies is Britain's best paid screenwriter.
He's the man who made Colin Firth's career by putting him
in a clinging wet chemise in 'Pride and Prejudice'.
And he's receiving acclaim this week, for his adaptation of 'War
and Peace', the BBC's big drama offering of the winter,
although some have suggested he's sexed up Tolstoy's masterpiece,
less subtly physical than the original.
Andrew Davies has been answering his critics,
and giving a master class on filleting the classics,
to our own very poorly adapted Stephen Smith.
Ask Andrew Davies to cut down a classic and he doesn't mess about.
Eventually I just took a pair of kitchen scissors and opened up
the spine and cut it through the middle.
I could carry it round in a jacket pocket then, that kind of thing.
Did you utter a silent apology to Tolstoy as one
I did feel a bit guilty about it, so I felt a kind
Poor old Tolstoy really had a hammering
We crossed the steps of Warwickshire to his
# If they asked me, I could write a book #.
So, this is my journey to work in the morning.
From the bedroom, into the cupboard in the corner.
Through the corresponding one in the next-door house and this
I think it's a very good thing to do, to chop out the boring bits.
Henry James called War and Peace a great baggy monster.
By which he meant it had lots of things
in it that Henry James, and in fact most modern critics,
would say shouldn't be in novels at all.
Great long essays about history and philosophy
So long as some of his ideas emerge through
Oh, this incestuous romp between brother and sister
Anatole and Helene, didn't happen in the book.
Say critics like Simon Scharma, who bashfully admits he only
made his way to the end of the novel eight times.
He probably read it eight times and never noticed it.
After my first reading, I hadn't noticed it either.
Actually, he did put one little scene in it where Anatole is kissing
Pierre comes upon them and is a bit alarmed.
You know, you think, well, that's not your average
I would write 70,000 men engaged in a
Bodies flying through the air and I'd just
cheerfully stop work and go and have lunch.
It's not my job to make it look like all this is happening
I'd like to think Colin Firth still sends you a cheque every
year for making him a star, Does that happen?
Sex is terribly interesting to everybody.
And it does help to sell shows.
So even if the coverage of it in the papers is exaggerated,
it usually does help the audience figures.
Is it possible to adapt a book and be faithful to it?
An adaptation is always different according to when it's
Even the reading of a book, when anybody
reads a book, it's different from another person's reading.
I used to teach English and I would give
lectures saying my God, this is a wonderful book and trying
This adapting job is a bit like that, only with millions
If you enjoyed Brokeback Mountain, you'll probably enjoy reading
the transcripts of conversations between Bill Clinton and Tony Blair,
They date to the late '90s, and came out of a BBC freedom
of information request to the Clinton Presidential Library.
The transcripts show the then British PM and the US President
Two youthful looking lawyers turned leaders,
back in 2000 one of them was about to become a father.
After January, I'm available for babysitting.
Oh, I wouldn't say that or you will be
You said you wanted to continue my work with the third way
Helping Blair balance work and family.
I tell you, Cherie's in great form but keeps
put you down on the babysitting list now, mate.
Now that would be a special relationship.
But in the transcripts of conversations running
to more than 500 page, sometimes a little more explanation
My staff won't let me talk to you un-Lescer's
Now, Bill, I thought we should have a word about Kosovo.
Intervention in Kosovo and the Northern Ireland peace
process were the backdrop to this bromance
between a second term Clinton and a first term Blair.
Thank you for giving Great Britain to Tony Blair and Tony Blair to the
world. As they chat we get a sense
of how these men view There is a limit to how many
times you can do it. Yeah, we end up being being part
negotiator and part therapist Some day we should write a book
together about these Northern Ireland figures large,
but the conversations don't I'm watching the end
of an old Peter Sellars movie. I can't tell, I've only
seen about five minutes, but Herbert just disappeared
along with a castle. with Northern Ireland.
humour since you're dealing I just wanted to bring you up today.
Tony Blair's answers from here were redacted. I know what you mean. It
is all redacted. Tony, when this comes out, who do you think they
will get to do the voices? I don't know, some impression it. Not that
Rory Bremner? That is more likely than Jeremy Corbyn leading the
That's all we have time for. Good night.
In-depth investigation and analysis of the stories behind the day's headlines with Evan Davis.
How worrying is the state of the world economy? The siege of Madaya, transcripts between Blair and Clinton reveal closeness, and Andrew Davies on adaptation.