:00:07. > :00:12.How to tell what's going wrong in the world economy right now.
:00:13. > :00:23.Now, desperately touting for business.
:00:24. > :00:30.Our average rate is $2600 per day. That compares with a peak of the
:00:31. > :00:32.teen 250,000. For those who thought China
:00:33. > :00:34.would grow at a lightning speed forever, find themselves
:00:35. > :00:37.disappointed - the world is dealing We'll ask Jeffrey Sachs how we got
:00:38. > :00:41.here, and how we might Is Poland's new government eroding
:00:42. > :00:45.democracy, and should For all that we made
:00:46. > :00:56.for the last 25 years. Donald Trump gets endorsed
:00:57. > :01:13.by Sarah Palin no less. Is he just a joke candidate
:01:14. > :01:15.with a new punchline or the unstoppable
:01:16. > :01:21.republican nominee? You might have noticed that we've
:01:22. > :01:26.been covering different items of economy news lately -
:01:27. > :01:28.low oil prices, problems in the steel industry,
:01:29. > :01:32.a slowdown in China and a resulting We could add today's
:01:33. > :01:36.inflation figures here - What's particularly interesting
:01:37. > :01:44.is that these are all in their own way, manifestations of the same
:01:45. > :01:46.global economic story. One that's summarised
:01:47. > :01:49.in the word overcapacity. The world economy is beset by it -
:01:50. > :01:52.we've got more steel, more oil, more stuff
:01:53. > :01:58.than we currently know how to buy. That's why inflation remains
:01:59. > :02:01.dormant, it explains why we're finding it hard to export more, -
:02:02. > :02:03.how can we sell more, when there's too much
:02:04. > :02:05.out there already? Overcapacity explains why it's
:02:06. > :02:08.turning out to be hard to make We'll talk more about it shortly,
:02:09. > :02:16.but if you want another example of it - a metaphor for the dashed
:02:17. > :02:19.optimism of recent years, take a look at the extraordinary
:02:20. > :02:35.events in the global These ships setting off Gibraltar
:02:36. > :02:42.are being buffeted in the wake of global forces. Owners of big car go
:02:43. > :02:48.vessels are bleeding money at the amount they can charge is
:02:49. > :02:52.collapsing. It tells you a lot about how global trade has been weakening.
:02:53. > :03:00.There are three categories of merchant ship. Tankers which carry
:03:01. > :03:07.liquids, container ships which carry stuff in shipping containers.
:03:08. > :03:14.Finally, dry bulk carriers, ships that carry coal or Ireland. It is
:03:15. > :03:23.the cost of that which is measured by the dry bulk index. It tells you
:03:24. > :03:27.what is happening to the cost of shipping loose stuff. It is used as
:03:28. > :03:36.an economic indicator to show demand for those sorts of goods. At the
:03:37. > :03:44.moment it is at an all-time low. It is under shooting the prices
:03:45. > :03:49.registered. It has never been a worse time. At the moment the
:03:50. > :03:56.average rate for a ship which carries 180,000 tonnes is $2600 per
:03:57. > :04:09.day. That is incredibly low. That compares with a peak rate of between
:04:10. > :04:18.200,000-250,000. That was an incredibly high market just as this
:04:19. > :04:24.is an incredibly low market. Our ship owners losing money?
:04:25. > :04:28.Absolutely. That is well below expenses, takes no account of
:04:29. > :04:41.depreciation or funding. You can hire exactly this kind of ship for
:04:42. > :04:53.less than $3000 per day. The cause of this is massive overcapacity.
:04:54. > :05:06.World dry bulk capacity was 177 million gross tonnes. By 2014 it was
:05:07. > :05:12.more than double. You've got rather desperate ship yards out there in
:05:13. > :05:21.places like Korea and China. They've been offering huge discounts. They
:05:22. > :05:30.want to place big orders. They've had these big deliveries on the
:05:31. > :05:34.premise that China would keep going. There is a huge mismatch between the
:05:35. > :05:40.supply of ships and the demand to move stuff. You can see how much
:05:41. > :05:47.China matters when you look at what is allocated to keep size ships. The
:05:48. > :05:58.key routes are from South America through to China and from Australia
:05:59. > :06:03.through to China. All the largest mines are in South America and
:06:04. > :06:12.Australia. You can see why if China is having a bad time, it will hit
:06:13. > :06:15.these carriers. Yes, if China is struggling then these are the groups
:06:16. > :06:15.these carriers. Yes, if China is where you will be seeing
:06:16. > :06:23.increasingly less activity. where you will be seeing
:06:24. > :06:32.similar process to dry bulk. Tankers are different. The tanker market is
:06:33. > :06:38.2012, 2013, it was rotten, nobody 2012, 2013, it was rotten, nobody
:06:39. > :06:41.ordered new ships. You did not have the problem of having a big glut of
:06:42. > :06:51.new ships trashing rates. The the problem of having a big glut of
:06:52. > :06:53.waiting is further cutting tanker supply. By contrast, there is not
:06:54. > :07:08.enough like this busy. You might think
:07:09. > :07:13.overcapacity as like this busy. You might think
:07:14. > :07:21.the world economy is a nice problem to have.
:07:22. > :07:27.And to make it worse, the people who paid for that
:07:28. > :07:28.overcapacity - who've built unnecessary ships,
:07:29. > :07:31.or who've invested in oil, thinking the price would be 100
:07:32. > :07:34.a barrel, or who have shares in steel factories -
:07:35. > :07:37.they will all find the money they thought they'd
:07:38. > :07:45.So - how did we we get into this, and how do we get out of this?
:07:46. > :07:55.Economics professor at Columbia and the. Bestselling author. Thank you
:07:56. > :07:58.for joining us. Do you see some connection between what has
:07:59. > :08:01.happening in the global steel market, what we've heard about
:08:02. > :08:07.happening in the global steel shipping, the price of oil, is it
:08:08. > :08:12.just overcapacity that is the general theme here? Your story told
:08:13. > :08:18.it just right. China has slowed down more than expected. It was going to
:08:19. > :08:23.be the machine which would pool in commodities from all over the world,
:08:24. > :08:34.commodity prices were very high just a few years ago, China has slowed
:08:35. > :08:41.down significantly. Those prices have plummeted, not only oil but
:08:42. > :08:54.metals as well. The shipping prices themselves. This is the China first
:08:55. > :09:01.story, China is now slightly ahead or behind depending on whose numbers
:09:02. > :09:11.you believe. You've got to be amazed, the capacity, we have more
:09:12. > :09:18.than doubled it, the price has come down by 95% from the peak. Those are
:09:19. > :09:29.extraordinary ructions in the global economy. It was expected that China
:09:30. > :09:35.would continue to grow, it is growing depending on who you
:09:36. > :09:40.believe, still growing but significantly less than believed. It
:09:41. > :09:47.was not only the great machine pooling the commodities but also a
:09:48. > :09:50.great exports engine as well. With all the optimism, money flowed into
:09:51. > :09:58.China, pushed up the value of the currency, and the currency is now
:09:59. > :10:02.overvalued, but instead of the market is pulling it down, China has
:10:03. > :10:05.been resisting depreciation of the currency because they fear that
:10:06. > :10:14.would create even more ruckus, though I believe it is part of what
:10:15. > :10:18.is needed to keep China's exports growing. When you've got too much
:10:19. > :10:25.stuff, the world should try and stoke up demand and find people to
:10:26. > :10:30.buy it, then everybody lives happily ever after. It feels like for the
:10:31. > :10:34.last 20 years we've been trying to get global demand up and have not
:10:35. > :10:40.been able to do it sustainably. I think you said it quite properly, we
:10:41. > :10:45.have a lot of capacity, good capacity to build a lot of things
:10:46. > :10:53.that we would like, and infrastructure and consumer goods,
:10:54. > :10:58.people have needs, it is a shame for these factories to lie empty. The
:10:59. > :11:08.question is how that demand is to be manifested. The usual way that has
:11:09. > :11:12.been attempted is through trying to boost consumption spending, but
:11:13. > :11:19.consumers do not want to spend so much, they want to save, and what I
:11:20. > :11:25.believe we need to do more is boost investment spending. Investment
:11:26. > :11:35.spending in countries which desperately need infrastructure.
:11:36. > :11:44.Here we have the great capacity to build exactly those urgent needs,
:11:45. > :11:55.but those needs require government cooperation, financing systems, and
:11:56. > :11:59.the government have not taken the time to build the public investment
:12:00. > :12:06.which would be vitally used by the world and keep demand high. That is
:12:07. > :12:10.an alternative way of spending money in those infrastructure investments.
:12:11. > :12:15.Reflect on the problem for savers. It feels to a lot of elderly people
:12:16. > :12:20.who don't have mortgages and have money in the bank that for the best
:12:21. > :12:24.part of the last 15 years they've been earning very little on their
:12:25. > :12:28.investments. It feels like there is virtually no way you can invest.
:12:29. > :12:33.You're certainly not going to be investing in building ships or
:12:34. > :12:41.manufacturing. What is going on for savers? Why has it been so hard? An
:12:42. > :12:44.excellent question. The big long-term saving goes through
:12:45. > :12:50.pension funds and insurance funds. Ironically that has then been put
:12:51. > :12:57.into the casino marketplace in short-term investments, trying to
:12:58. > :13:01.time the market and in the market, whereas if our pension funds and
:13:02. > :13:04.insurance funds which are long-term savings, we are investing in
:13:05. > :13:11.long-term infrastructure worldwide, whether it is in the ports or the
:13:12. > :13:17.power generation, the clean energy that we vitally need, then there
:13:18. > :13:20.would be a good match of the long-term saving needs and
:13:21. > :13:28.investments that would be the counterpart. But many investors have
:13:29. > :13:31.noticed in the last few years that investment has become a short-term
:13:32. > :13:40.game and we don't yet have what in the jargon is called the acid class
:13:41. > :13:44.of infrastructure, which is the proper use of this long-term saving.
:13:45. > :13:49.How worried are you at the moment? It feels like it's been a very
:13:50. > :13:57.gloomy year. A lot of people talking about financial problems and global
:13:58. > :14:02.implosions. How worried are you? You've got to be a bit nervous.
:14:03. > :14:08.We've lost about $5 trillion of market capitalisation in recent
:14:09. > :14:12.weeks with the stock market decline. But this is still relatively small
:14:13. > :14:19.compared to the size of the world economy. The problem is if a panic
:14:20. > :14:29.broke out as happened in Thailand in 1997 or after the Lehman Brothers
:14:30. > :14:32.failure in 2008. If we fail to keep liquidity and see the market seizing
:14:33. > :14:39.up then we have serious trouble. If there are big mistakes in this shaky
:14:40. > :14:46.period it could turn worse, but so far we have the means to avoid any
:14:47. > :14:48.serious downturn as long as we are vigilant and keeping liquidity in
:14:49. > :14:50.the market place. Poland - once seen as one of the big
:14:51. > :14:53.achievements of the EU, with its transition to democracy
:14:54. > :14:57.and strongly renovated economy - finds itself in the naughty corner
:14:58. > :15:01.of the EU at the moment. It elected a populist socially
:15:02. > :15:03.conservative government back in October, one that is giving
:15:04. > :15:06.a prolonged kick up the backside But that is not to the taste
:15:07. > :15:10.of the EU establishment which is questioning
:15:11. > :15:12.whether the new Polish government The issue was debated
:15:13. > :15:21.in the European Parliament today. One MEP said the Polish government
:15:22. > :15:23.represented the "Putinisation The atmosphere in Poland
:15:24. > :15:43.is shifting fast. For the first time since the end
:15:44. > :15:46.of communism, a democratically elected government has
:15:47. > :15:49.a majority and is busy implementing its own brand
:15:50. > :15:52.of Christian conservative You don't really know where this
:15:53. > :16:02.politics is going to. Everything happened so fast
:16:03. > :16:04.and it is suddenly a different For several decades Poland has
:16:05. > :16:14.been the poster nation But its new government has set it
:16:15. > :16:23.on a course that now sees it accused of eroding the progress made
:16:24. > :16:26.here over the last 25 years. It has only been in power for two
:16:27. > :16:30.months, but already the ruling Law and Justice party here has
:16:31. > :16:32.made some pretty big It has pushed through reforms
:16:33. > :16:41.to increase its influence over It has sacked managers
:16:42. > :16:44.and reporters at And it has boosted
:16:45. > :16:49.surveillance rights For the Law and Justice party this
:16:50. > :16:54.is about leaving behind what they depict as
:16:55. > :16:55.the liberal, corrupt elites they say ruled
:16:56. > :17:40.Poland for too long. But tens of thousands don't buy that
:17:41. > :17:44.and have taken to the streets to protest, many for the first time
:17:45. > :17:50.since the collapse of communism. As a flat in central
:17:51. > :17:53.Warsaw members of the committee for the defence
:17:54. > :17:55.of democracy, created just a week after the new government
:17:56. > :17:57.was sworn in, The Standard and Poor
:17:58. > :18:04.rating agency downgraded Poland's credit rating on Friday
:18:05. > :18:07.saying Law and Justice has weakened the independence
:18:08. > :18:08.of key institutions. I'm afraid that the
:18:09. > :18:15.good changes in our economy for the past 25
:18:16. > :18:19.years could be reversed because the ratings go down
:18:20. > :18:22.and the economy could also Germany is being framed by the right
:18:23. > :18:33.wing media as the enemy to this Angela Merkel recast,
:18:34. > :18:37.not for the first In the offices of an internet
:18:38. > :18:45.magazine I wanted to know whether the independent Polish
:18:46. > :18:49.media is worried the government might try and exert
:18:50. > :18:51.influence over them next. I hope it is not going to happen
:18:52. > :18:54.because that is the worst-case I mean if politicians
:18:55. > :18:57.would like to influence the content of our magazines,
:18:58. > :19:00.that is the end of the free-speech, I hope that it is not
:19:01. > :19:06.going to happen. We fear it as the whole
:19:07. > :19:14.of civic society, that something could happen
:19:15. > :19:16.in the future. Because you don't really know
:19:17. > :19:26.where this politics is going to. Of springing bills on Parliament
:19:27. > :19:28.and holding late-night In just two days
:19:29. > :19:33.between Christmas and the New Year the country's
:19:34. > :19:36.media laws were amended. And now the government has
:19:37. > :19:39.the power to dismiss and appoint the management
:19:40. > :19:45.of all the state broadcasters. One of Poland's
:19:46. > :19:48.best-known TV presenters lost his job after his channel
:19:49. > :19:55.TVP got a new boss. In Poland criticising the government
:19:56. > :19:58.to foreigners has been It is amazing to us that
:19:59. > :20:07.for so many people abroad, for so many people in
:20:08. > :20:09.Western European countries, it is interesting
:20:10. > :20:11.what is going on in But I really do believe
:20:12. > :20:17.that it is on us to do our job. It is on us to build a successful
:20:18. > :20:21.country for every citizen of Poland. You have been sacked,
:20:22. > :20:23.how can you do your today defending her country's
:20:24. > :20:35.actions against accusations that they contravene
:20:36. > :20:36.the liberal values The European Commission
:20:37. > :20:39.is investigating. But plenty say that Poland
:20:40. > :20:42.is modelling itself To toe the line on
:20:43. > :20:58.migrants, for example. That it is flexing its muscles
:20:59. > :21:28.as part of an increasingly illiberal Some of those who oppose the new
:21:29. > :22:05.government came themselves in part for what has happened. -- blame.
:22:06. > :22:13.Poland is the sixth largest economy in the queue. It could have its
:22:14. > :22:18.voting rights suspended if its government is found wanting. But in
:22:19. > :22:20.reality it is unlikely there is a will to pick a serious fight with
:22:21. > :22:24.the country that is so important to the union.
:22:25. > :22:28.On Thursday, at 10 am in Court 73 at the Royal Courts of Justice,
:22:29. > :22:30.the former high court judge Sir Robert Owen
:22:31. > :22:34.He will outline the conclusion of the 18 month inquiry he's been
:22:35. > :22:36.heading into the death of Alexander Litvinenko
:22:37. > :22:41.He seems likely to conclude that some Russians were involved.
:22:42. > :22:46.I hope you were sitting down when I broke that to you.
:22:47. > :22:49.Now President Putin may be about as popular as Sepp Blatter
:22:50. > :22:51.in this country, but here's the thing: at the moment,
:22:52. > :22:55.we kind of want to be nice to him - as he could be helpful when it
:22:56. > :23:02.Here's David Grossman on the awkward diplomacy of the Litvinenko inquiry.
:23:03. > :23:13.The Russian Embassy in London's website puts the British-Russian
:23:14. > :23:16.In recent years, our political relationship has been
:23:17. > :23:20.characterised by instability and volatility, it says.
:23:21. > :23:27.By abrupt changes, from relatively good, to overt hostility.
:23:28. > :23:29.It is certainly not a normal relationship at the moment
:23:30. > :23:33.and that is partly as a reaction to this kind of misbehaviour by Russia.
:23:34. > :23:37.The murder of Alexander Litvinenko, a British citizen in London,
:23:38. > :23:41.in November 2006, was viewed in Whitehall as nothing short
:23:42. > :23:47.On Thursday the enquiry into his death will report.
:23:48. > :23:50.The only real question about its findings is how far up
:23:51. > :23:55.the Russian state it will say the order to kill was taken.
:23:56. > :23:58.But so much has happened in the interim.
:23:59. > :24:02.The Ukraine crisis of 2014, the shooting down of MH17 with 290
:24:03. > :24:11.It was Britain that led the way demanding sanctions.
:24:12. > :24:13.We have to address the completely unacceptable
:24:14. > :24:17.situation of having Russian troops on Ukrainian soil.
:24:18. > :24:20.But then in September of last year, Russia began bombing
:24:21. > :24:26.Shortly after, in December, Britain too engaged in military
:24:27. > :24:34.Putting us and the Russians at least notionally on the same side.
:24:35. > :24:36.Which is why the report into the death of Alexander
:24:37. > :24:40.Litvinenko could not come at a more delicate time.
:24:41. > :24:42.The enquiry has heard extensive evidence of Russian
:24:43. > :24:48.Lawyers for Mr Litvinenko's widow called his murder
:24:49. > :24:54.The evidence has demonstrated step by
:24:55. > :24:59.painstaking step that Putin and his personal cabal are directly
:25:00. > :25:06.That they're willing to murder those who
:25:07. > :25:10.And that Mr Litvinenko was murdered for that
:25:11. > :25:18.I think if the finding of this inquest is that this murder
:25:19. > :25:21.was conducted at the behest of the Russian state,
:25:22. > :25:24.or that that is where the evidence most strongly points,
:25:25. > :25:30.the ramifications for the Russian state will be exceptionally serious.
:25:31. > :25:40.This is a hearing which has been conducted in London,
:25:41. > :25:42.under the well recognised standards of British justice,
:25:43. > :25:44.which are still widely admired around the world.
:25:45. > :25:46.I think a finding of that sort would have real
:25:47. > :25:50.credibility and I think it would do real damage to the Russian state.
:25:51. > :25:52.But is a full-scale diplomatic row right now likely,
:25:53. > :25:54.given that it suits neither ourselves nor the Russians?
:25:55. > :25:58.We have serious common interests with the Russians in fighting
:25:59. > :26:03.They have a real problem, particularly in southern Russia,
:26:04. > :26:11.and one only has to think there are perhaps 400 Britons
:26:12. > :26:14.or maybe more still fighting for ISIS in Syria and there are many
:26:15. > :26:18.more times that of Chechens, for example,
:26:19. > :26:19.who are also fighting alongside them.
:26:20. > :26:21.That is British and Russian citizens fighting against the interests
:26:22. > :26:25.So there is clearly a common interest.
:26:26. > :26:28.And that gives us a common interest in bringing the Syrian conflict
:26:29. > :26:30.to an end so that we can turn our attention to defeating
:26:31. > :26:34.But for Russia the incentive for better
:26:35. > :26:42.Since the start of the Ukraine crisis in 2014 the price of oil has
:26:43. > :26:46.It is now well below the point at which experts say Russia can pay
:26:47. > :26:54.Mr Putin urgently needs Western sanctions lifted.
:26:55. > :26:56.One only has to look at Putin's speeches to see
:26:57. > :27:00.that it is beginning to sink in that Russia is facing a really serious
:27:01. > :27:14.While Putin did gain in the short run from the nationalist outburst
:27:15. > :27:15.that accompanied the annexation of Crimea,
:27:16. > :27:17.Russian people can't live off, can't eat, nationalism.
:27:18. > :27:23.They need something more substantial.
:27:24. > :27:25.But for all the real politique, there is also British
:27:26. > :27:26.domestic politics to consider as well.
:27:27. > :27:31.Pressure on Mr Cameron to take a publicly tough line.
:27:32. > :27:34.For us it would seem to be very simple.
:27:35. > :27:36.If people are implicated and named in this report,
:27:37. > :27:41.which they absolutely should be, and I expect them to be,
:27:42. > :27:45.then there should be an immediate EU wide travel ban,
:27:46. > :27:48.there should be an asset freeze, and we should demonstrate not just
:27:49. > :27:50.to Putin but to anybody else around the world
:27:51. > :27:54.we will not accept that kind of breach of our sovereignty.
:27:55. > :27:56.That kind of outrageous act here on our soil.
:27:57. > :27:58.And so the challenge for the British Government
:27:59. > :28:01.is to balance outrage at what might prove to be Russian state
:28:02. > :28:04.murder in London with the need to maintain
:28:05. > :28:14.A fragile but important relationship with Vladimir Putin. And how should
:28:15. > :28:18.we respond to the enquiry? Here to discuss the impact this may
:28:19. > :28:21.have on Anglo-Russian relations are Bill Browder, a former investor
:28:22. > :28:23.in Russia who fell out with President Putin and has been
:28:24. > :28:25.campaigning against corruption since his lawyer died in police
:28:26. > :28:38.custody, and the academic and author Good evening. Bill, do you think
:28:39. > :28:45.that we can it important diplomatic issues like Syria affect our
:28:46. > :28:53.response to an enquiry that the Banco enquiry? -- like the
:28:54. > :28:58.Litvinenko enquiry? First we have a situation where there is an active
:28:59. > :29:06.nuclear terrorism on British soil. Not only was Litvinenko killed at
:29:07. > :29:10.this radioactivity was at Arsenal Stadium, in Grosvenor Square, at a
:29:11. > :29:13.restaurant. You cannot allow Russians to be going around settling
:29:14. > :29:18.their scores and doing assassinations and putting British
:29:19. > :29:23.personal lives at risk. And so first and foremost, is public safety and
:29:24. > :29:28.that demands that there is a sharp response to this otherwise the
:29:29. > :29:32.Russians will carry on doing it and they do carry on doing it. This is
:29:33. > :29:34.not the only murder on British soil or attempted murder of Russians
:29:35. > :29:45.settling scores. Tell us what you would do because we
:29:46. > :29:48.already have sanctions. What extra would you do give and we cannot
:29:49. > :30:00.conflict the individuals who might have done it? Good question.
:30:01. > :30:12.Everybody in the UK thinks they can keep their dirty money safe and put
:30:13. > :30:18.themselves in London. We can take away their ability to travel and
:30:19. > :30:23.freeze their assets. The United States government did just that and
:30:24. > :30:29.I can tell you that truly pierced the imperviousness of Russia. It
:30:30. > :30:34.touched their Achilles heel. This is what they care about. It would not
:30:35. > :30:43.affect the average Russian but the people at the top? It is like one of
:30:44. > :30:51.these targeted cancer drugs, it does not kill the patient. You make a
:30:52. > :30:54.list of the people involved in this crime and you freeze their assets
:30:55. > :31:00.and ban their visas. It does not touch the Russian people. It touches
:31:01. > :31:10.the regime and it shows they are serious. We heard Tim Farrand say it
:31:11. > :31:18.is quite simple. If the crime is committed, action must be taken. Is
:31:19. > :31:28.it that simple? Let's think back to when their were IRA people on the
:31:29. > :31:36.run in America. We have precedents. We have the problem that in reality
:31:37. > :31:48.at the moment, many Russians, the great majority, think they are
:31:49. > :31:56.facing economic warfare. Ordinary Russians say the sanctions do hit
:31:57. > :32:01.and that is creating a mood in Russia that is anti-Western. One of
:32:02. > :32:06.the reasons for the collapse of communism is nobody believed the
:32:07. > :32:11.antique Western -- the anti-Western rhetoric. Now, ironically,
:32:12. > :32:21.antique Western -- the anti-Western seen as being the fault of the West.
:32:22. > :32:25.The public opinion creates a problem. You saw in Poland, a party
:32:26. > :32:32.can win an election on an anti-Western ticket. What about
:32:33. > :32:36.Syria? We might want to cooperate with Vladimir Putin on Monday and
:32:37. > :32:40.punish him on Thursday. Does that complicated? The real threat comes
:32:41. > :32:49.not from people who are effectively banned from Britain but from
:32:50. > :32:57.potential terrorists operating. They have links with people who the
:32:58. > :33:01.Russians fear. Ironically, whatever problems we have with Russia we also
:33:02. > :33:08.have possible advantages of cooperation. We did cooperate with
:33:09. > :33:13.Stalin in the Second World War. Sometimes the moral simplicity of
:33:14. > :33:22.deciding we are good and the other side is bad, there are grey areas.
:33:23. > :33:26.Would you still advocate if I told you on Monday we will be asking
:33:27. > :33:28.Vladimir Putin for favours and what you are proposing will make that
:33:29. > :33:40.more difficult and we don't want to prolong the Syrian war, a bigger
:33:41. > :33:48.thing than worrying about that? Let's look at what we are asking
:33:49. > :33:54.Russia for. At the moment Russia have interfered in Syria and started
:33:55. > :34:05.bombing 90% targets that are not Isis. They are basically going after
:34:06. > :34:11.allies, bombing civilians and creating a larger refugee crisis. I
:34:12. > :34:18.don't believe we are in a situation where we are working with Russia,
:34:19. > :34:22.they are operating blackmail in order to negotiate down Ukrainian
:34:23. > :34:24.sanctions and to staff in these types of issues for when they commit
:34:25. > :34:31.murders and do another terrible things. Our approach needs to be
:34:32. > :34:35.firm because Russia laughs at us when we tiptoe around them begging
:34:36. > :34:45.them for favours. This is a tyrant. Vladimir Putin is not a man who can
:34:46. > :34:51.be reasoned with or begged. Quick last one from you. Whether we like
:34:52. > :34:58.it or not, Russia has a role to play. Have we any way of stopping
:34:59. > :35:03.it? What can we do to make the Russians compromise? We might get
:35:04. > :35:06.something we would otherwise not get and unfortunately that is what
:35:07. > :35:13.diplomacy is about. Sometimes, swallowing your pride, I'm afraid
:35:14. > :35:16.megaphone diplomacy has not worked, maybe we could try something
:35:17. > :35:18.different and we could get something more in tune with the moral stance.
:35:19. > :35:21.Thank you. The US is abuzz tonight
:35:22. > :35:24.with the news that Sarah Palin is about to endorse Donald Trump's
:35:25. > :35:27.bid for the republican presidential We are joined from by New York Times
:35:28. > :35:53.journalist Josh Barro. Good evening to you. Let's think
:35:54. > :35:58.about the similarities between them. He is a metropolitan New York, they
:35:59. > :36:08.are not entirely on the same wing of Conservative thinking. I think they
:36:09. > :36:15.are closer together than they look initially. Sarah Palin ran on a
:36:16. > :36:23.platform of taxing oil companies more. What they represent is
:36:24. > :36:27.conservatism not really being about small government and low tax. They
:36:28. > :36:39.had a sense that the country is moving in the wrong direction. They
:36:40. > :36:41.both reflect that. This is exasperating for a lot of
:36:42. > :36:45.professional conservatives who say these are not actually about small
:36:46. > :36:53.government philosophies but it aligns with what voters want. They
:36:54. > :37:04.are both reality show stars to some extent. They seem to have very good
:37:05. > :37:12.communication skills. They do. They tap into the frustration. The phrase
:37:13. > :37:15.it in different ways. You talk about the difference between real America
:37:16. > :37:23.and not real America. Donald Trump is from Manhattan. He does talk
:37:24. > :37:31.about how political correctness is terrible. They both signal the
:37:32. > :37:43.attitudes of the mostly white middle America. We are way ahead of Donald
:37:44. > :37:50.Trump King is a running mate. Is the expectation that something is going
:37:51. > :37:58.on here? I doubt that, for a few reasons. We've seen in Sarah Palin's
:37:59. > :38:04.career, G has a reputation for not being very dependable. She wants to
:38:05. > :38:08.be a public figure, give speeches, write books and get paid for that. I
:38:09. > :38:12.don't think she wants to go back into government and I don't think
:38:13. > :38:22.Donald Trump would find her to be an asset. I think she will be useful in
:38:23. > :38:26.Iowa. It would hardly be a balanced ticket. Donald Trump would want a
:38:27. > :38:31.detail person. She hardly qualifies as that. The Republican
:38:32. > :38:36.establishment, they must have their head in their hands. All the
:38:37. > :38:45.momentum is around this chap. Every two weeks another story. It is
:38:46. > :38:49.complicated. They are very frustrated by it. People thought he
:38:50. > :38:56.was a joke when he announced. On the other hand, the problem for the
:38:57. > :39:03.establishment is the alternative, Ted Cruz. People are puzzling over
:39:04. > :39:08.why they don't unload everything at Donald Trump and it is partly
:39:09. > :39:11.because if they bring him down, Ted Cruz will be the beneficiary and for
:39:12. > :39:18.a lot of the establishment he is seen as even worse because Donald
:39:19. > :39:26.Trump is totally unique. There would be nobody like him waiting in the
:39:27. > :39:29.wings. It would be an intermission and they could come back and do what
:39:30. > :39:37.they did before whereas if Ted Cruz wins he can take over the party.
:39:38. > :39:44.They are more scared of that. A lot of people would rather have him as
:39:45. > :39:49.the nominee. That's why you seen part of this conversation about
:39:50. > :39:53.whether he is eligible, Ted Cruz, because he was born in Canada. This
:39:54. > :39:58.is normally a fringe idea but because people hate Ted Cruz so
:39:59. > :40:03.much, people like John McCain are saying this is a serious issue, it
:40:04. > :40:08.reflects the fact that the establishment is more petrified of
:40:09. > :40:13.Ted Cruz than Donald Trump. You've got literally five words, is he
:40:14. > :40:16.going to be the candidate? I think he's the most likely person. I would
:40:17. > :40:19.not bet my life on it but I would pick him over the field. Thank you.
:40:20. > :40:35.There is a very story -- important story in the Financial Times
:40:36. > :40:42.suggesting Brussels is proposing a change to remove the arrangement by
:40:43. > :40:48.which the first country into which an asylum seeker lands is the
:40:49. > :40:56.country which needs to take responsibility. David Grossman is
:40:57. > :41:01.with me. Fill us in on the details. It is not big news that this
:41:02. > :41:06.agreement is not working. We've seen massive flows of asylum seekers
:41:07. > :41:10.across Europe and Angela Merkel said they would no longer be sent back to
:41:11. > :41:14.places like Greece or Italy but they've not said what it will be
:41:15. > :41:21.replaced with and that will be crucial in the context in the run-up
:41:22. > :41:26.to the referendum on whether we will stay in the EU or not. Britain has
:41:27. > :41:28.an opt out on migration but we opted in to Dublin because it worked for
:41:29. > :41:31.us. What the new rules would be in to Dublin because it worked for
:41:32. > :41:37.not clear in to Dublin because it worked for
:41:38. > :41:45.EU is already trying to share the quarter and it is not working at
:41:46. > :41:52.all. Migrants sitting in Calais, if there is no Dublin it is not obvious
:41:53. > :41:58.who's problem it is. Indeed, the system which replaces it will be
:41:59. > :42:01.crucial but how it can coexist with Schengen is very difficult to
:42:02. > :42:05.crucial but how it can coexist with Thank you. That is all we have time
:42:06. > :42:09.for. I will be back here tomorrow. Have a good