tv BBC World News PBS December 9, 2011 12:30am-1:00am PST
>> and now, "bbc world news america." welcome to newsday on the bbc. these are the headlines. attempt to get all 27 member states to change the eu treaty have failed. stock markets remain in misery as investors wait for an announcement from brussels. in asia, all the main indexes are down an american spy plane, iran says, down to the unmanned drone of near the border. violence at virginia tech. the site of the deadliest campus chuted four years ago. >> broadcasting here and around the world, this is newsday.
>> make sense of international hello once again. about 15 minutes ago we received news that the european union leaders are still debating potential changes to the eu treaty, but the news is -- the non-zero nations, news at bbc.com/news. -- the non-zero nations, there are 10, -- that least 17 nations that use the common currency to go it alone. there are fears there could be a two-track europe with france and germany are leading the way. treaty changes are being discussed by the european council.
they are trying to persuade the nation's they do not need to change the eu treaty, the protocols currently exist that would allow them to make changes to ensure the safety of the euro. we must stress that these, from an unnamed european democrats who are at the meeting in brussels. the british prime minister, david cameron, has demanded certain concessions. the u.k. is not part of the eurozone, but part of the european union. they the camera demanded the concessions that france and germany are not prepared to -- david cameron demanded concessions that france and germany are not prepared to accept sweden is not interested in those changes. the 17 countries that formed the eurozone will try to go it alone. there is also news that 200
billion euros and is going to be raised in bilateral loans and 750 euros of that will come from the 17 eurozone nations. that money will go to the imf in washington, d.c. that organization will use the money to help european governments deal with the sovereign debt crisis. it is an economic issue, but very much a political issue in terms of political changes. the electorate was to have their say. parliament was to have their say. it is whether a decision can be reached at the end of the summit in brussels on friday. the french president says there will be no second chance. >> when the leaders arrived to the summit, the task of persuading all 27 countries in the european union to agree to new rules of the eurozone and put it in writing looked like a
nonstarter. the kiss -- nicolas sarkozy and angela merkel were adamant they would not leave without some kind of agreement, even if it involved only the 17 eurozone countries. an agreement was threatened with a veto. there was a pre summit meeting between david cameron, the german chancellor, and the french president. diplomats at the summit say attempts to get all 27 member states to agree to change the eu treaty have failed after david cameron demanded concessions that germany and france were unable -- unwilling to give. 17 countries use the single currency. france and germany what new budgetary rules to safeguard the future of the eurozone. the question is, would that be
enough to convince the markets that the single currency is salvageable? >> let's go to sharon. we have more market reaction to the events taking place here in europe. >> that is right. investors pretty much on the edge, trying to figure out what is coming out of brussels. as you say, there is concern that the 27 members have not agreed to this crucial treaty to ensure budgetary constraints. we have seen the markets in negative territory all morning. yesterday we saw the european central bank dashing hopes that there would be more financial help for the region. that helped push markets lower at the start. investors essentially watching those statements to be made at a press conference held in
brussels. growing doubts that european leaders could forge a plan for the eurozone's debt crisis. all the markets are down. u.s. markets have been on edge all week in anticipation of that summit deal. that is how they closed on thursday. no surprise that the euro has fallen against its counterparts. for more on this, we speak to simon long. he joins me now in the studio. taught me to the importance of this fiscal compact and the fact that sources are saying the 27 members have not agreed to a treaty to make it so. >> they are in complete disarray. clearly that has had an -- had a negative impact on investors, as you describe. there is some sort of consolation, i suppose.
at least it will be less cumbersome to reach an agreement between the 17 eurozone members that to reach a full-scale agreement with the 27. there are still doubts. the first is that people will look at this and say it did we not have that already? there was supposed to be an agreement to raise budget deficit. secondly, it will take an awful long time. >> we will have to stop you there. we have to go back to london where there is a press conference happening. >> yes. you may be interested in listening to the french president, nicholas sarkozy. he is speaking now >. >> we will make progress to strengthen the euro and to see all the franco-german proposals
accepted. that will settle the legal arose, mainly what form will this take? it will be an intergovernmental agreement. important decisions have been made. for instance, the exclusion of all p.s.i. each european country reimbursing its debt. if there are any questions, i will try to answer. >> well, as a chance a lot merkle and i have determined, -- as chancellor merkle and i have determined [unintelligible]
the question was not audible, but the answer is. we have decided to study the possibility of strengthening the fund to the tune of 200 mi llion euros. the question was have you considered increasing your contribution to the imf? >> yes. it is rooted in our conclusion. i hesitate to say conclusions, because it is not the conclusion of the 27. it is the conclusion of the 17.
who is in the city -- in the studio from me in -- from the economist. sarkozy spoke about bilateral loans to the imf to the tune of 200 billion. >> i think problem with the imf is they are trying to avoid going to the general fund. it -- the biggest call on the imf in the short to medium term is likely to be the eurozone. the eurozone is building up to try to shore up the currency. i still think it would do little to temper the disappointments felt by the european central bank. >> we are hearing from the french president, nicholas sarkozy, again.
>> at the end of the treaty, which enabled the u.k. to opt out of a certain number of rules applying -- apply to financial- services -- we could not accept that. a very large and substantial amount of the problems we are facing around the world are a result of lack of regulation of financial services. we cannot have a waiver for the united kingdom. in our view -- and i am not saying this is mr. cameron's view -- in our view, it would undermine what we have done to regulate the financial sector. that was a very necessary thing. mr. president, a government poll agreement has to be ratified by all parliaments? does it have to be ratified by 17 or 27? >> tonight, we agreed on the substance of the proposal to shore up the year wrote.
-- the euro. we have chosen a legal format for this agreement. it will be an intergovernmental format. 17 + anyone willing to join us. the actual legal form of this will be discussed tomorrow morning because there are a number of additional questions we still have to settle. i was going to say tomorrow morning. not tomorrow morning, but later on this morning i will probably be able to give you more details after the legal framework within which all of this will take place. it will not be a protocol. it will be an intergovernmental agreement, the shape of which we will spell out later on.
>> the text must be ready by march at the latest. we really want to move fast. >> mr. president, another question. this intergovernmental treaty with the 17 plus, does this mean a two-speed europe? secondly, how does this match with the european stability -- mesh with the european stability treaty? can you put them together to make the eurozone even stronger? >> your question is a very strange one. in our view, the fact of the
concession to the eurozone, regulation, and subscribing to the rules applying to the eurozone are not an option. they are an obligation. we are doing everything we can to save the euro. those forget that the u.k. negotiated a clause so as not to have to join the euro and now you are telling us we are the ones that have created a two- speed europe. that was not our choice. they wanted to be with europe, but not the eurozone. i am not criticizing them, but it is difficult to say to those who are doing everything to save the world within the eurozone that we are building a two-tier europe. there are opt out clause is that
have allowed countries not to opt into the europ. according to the treaty, we are all destined to be in the at eurozone. our polish friends say when we are ready, we wish to subscribe to the euro. there we would have no criticism. our british friends -- and we are not criticizing them -- they are very happy to not be part of the euro. we are defending the euro. we are changing the way we operate. we are fighting the crisis. i am not going to apologize for doing what we are doing in order to save our currency. >> i do not know if you followed my logic, but it seems to me to be blindingly obvious. yes, we would rather have reform with the membership of 27, but insofar as that is not
possible for the reasons i gave you, then we drew lessons from that and the conclusions. this is the point i made when i met chancellor merkle in paris. this is the least that option and it will enable us -- bad option and it will enable us to reform were quickly. it will not require such cumbersome procedures such as a referendum, parliamentary approval, etc. a major treaty revision would have required this. >> insofar as this is not a 27- member treaty, what will be the role of the different european institutions -- the european court of justice, commissioners, etc.?
>> the council was clear on this. insofar as we are not changing the scope and the competencies' of the various institutions, there should be no problem at all. take the european court of justice. as you know, we have not wanted it to be in a position to judge whether a budget were right or wrong, proper or improper, but simply to make decisions in respect to whether the golden rule was being upheld, which is written into the agreement, so that does not require any changes. in respect to automatic sanctions, as a political agreement entered into by a certain number of states saying "we will require sanctions even
before the government dealt agreement has been adopted." it is a sign of political will and determination. what we are saying is before we adopt our intergovernmental agreement, we ask the commission to oversee and uproot these rules. according to the legal adviser to the council, this poses no difficulty. those familiar with the way the european institutions work know this. it might have been a completely different ball game had we changed agreements and the mandate of the different institutions, which we have not. >> do you think the agreement that has been fleshed out tonight is likely to calm the markets once and for all? >> well, i would not agree with you -- i would not agree or
disagree, because it is not what you said. i would like to say we will no longer have conferences at 6:00 in the morning or meetings that last all night, but, unfortunately, it is a complex world and all of us have to be humble and aware of the complexity of the problems we are tackling. therefore, i would not be so bold as to try and read a crystal ball. what i can tell you is that we have laid the foundations of what we thought were necessary in order to change this structural foundation of europe. we have been endorsed by the 17 members of the eurozone. we have determined, all of us have agreed to drop the idea of
private sector contribution to debt supplement. there will be regular meetings of heads of the state. it has been suggested this be done on a monthly basis during the crisis. we have an 85% majority required for decisions on the european stability fund. all of this is very important. it is not a single criteria that will bail us out of this crisis, but i think all of us who are building and shaping europe will agree the decisions we are taking are very important. >> could you tell us more about mario draghi's proposal with respect to the role of the european central bank?
second question -- does this intergovernmental treaty mean that no country will have to call a referendum in order to accept it? >> on the referendum, this is a national sovereign decision. it is not for me to pronounced. an intergovernmental intervention should not lead to a constitutional consultation nor necessarily should be -- should they trigger a referendum. each country will have to make its own sovereign decisions. they have decided it is very important. i am sure that in the days to come, as usual, it will take a bit more time, but people will understand the importance of
what is happening. the e.c.b. as not only lower its interest rates, but for the first time in its history to my knowledge, decided to grant three-year loans. they are at very low rates. they just lower it bite 0.25%. let me say one thing -- the central bank, the e.c.b., has definitely decided to lend unlimited sums of money, for instance, to italian banks, at a rate of point to 5%. nowadays the italian state is borrowing between 6%-7% interest rates. you do not need to be an expert to realize that thanks to the e.c.b.'s decision, as of
tomorrow, the italian authorities will be able to authorize an italian banks to fund the at rates. >> we will leave nicolas sarkozy and go to another news conference, which is being held by maxwell barroso, the president of the eu commission. rompuy, herrmann were employ president of the european council. >> we are not sure about the procedures. as you know, you have a convention, an intergovernmental conference, and ratification in the united states. an intergovernmental treaty can be approved and ratified much more rapidly than eight full- fledged treaty change. i think speed is also very important in order to enhance credibility.
of course, there are handicaps in some ways. also in an interim government the treaty, that is why we proposed in our interim report to go for full-fledged treaty change. if this was not possible, and it was not possible, we have to choose for that kind of corporation on intergovernmental basis. i think we can have, for instance on the authenticity, a practice. that we agreed upon. , the euro-area member states, commit in some ways, commit to apply the rules as if the treaty would have changed and it is not excluded that afterwards