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Archives for April 2011

Tahrir: "Enjoy the revolution" (they are, up to now)...

Paul Mason | 23:31 UK time, Saturday, 30 April 2011

Mayday in Tahrir Square

In white letters, across a wall next to Tahrir, is grafitti which says: "Enjoy the Revolution". In English. At midnight local time, on the eve of 1 May, a lot of people are out doing precisely that. The zippy motorbike youths, the youths arm-in-arm on the bridge over the Nile, the families on their plastic chairs taking in the air on the Nile bridges.

Tomorrow (today) will be interesting because it is May Day.

Under Mubarak, the official trade unions (ETUF) would hold a soviet-style celebration, but their ex leader is now under investigation for his alleged role in mobilising the camel attack on 28 January.

Today however something different is expected. Overnight a coalition of labour unions and leftists has formed the Democratic Labour Party; the flaming fist on their logo suggests they will not be applying to become a sister party with Ed Miliband's Labour Party. 

Independent unions will be trying to demonstrate in the square in the afternoon of 1 May - which will be a first for a country that rigorously policed the holiday in previous years.

I've met a group of doctors - the Doctors' Coalition - who are trying to bring the entire country's publicly employed medical profession out on strike in mid-May. The issue: well they have two demands - the sacking of the health minister and the imposition of a maximum wage and a minimum wage in the health service.

Here's why.

Egyptian doctors in the state sector earn the equivalent of £30 a month. 

This is not a misprint or a decimal point misplacement or a fat finger: thirty quid a month. I am talking about "residents" and other junior doctors. Some hospital managers however earn £1,700 to £2,000 a month. This is how one doctor explained it to me:

"The corruption was official. The hospital managers would cut deals with drug suppliers, with other contracts etc and pass what they wished down to the workforce on the basis of favouritism: to this nurse, to that doctor, who would then be required to repress their part of the workforce."

"What we want is for the health budget to rise: it is 3.5% of GDP and it should be 15%. But if we place a maximum salary of 15x the minimum in the health service we can stop the corruption."

One hospital, in Heliopolis, on the outskirts of Cairo, already overthrew its managers and elected new ones; they faxed the name of the newly elected manager to the health ministry and two hours later a fax came back confirming recognition. Others are considering the same thing. 

The doctor I spoke to alleged that the Muslim Brotherhood, which controls the Doctors' Syndicate, would try to stop the strike. I only managed to speak to secularist, progressive doctors - so I can't get the other side of the story from the MB. But the secularists are in a debate about how soon and how long to strike for, and whether to link up with other health professions. They have absolutely no idea whether they can get people to support them.

This organised labour aspect of the Egyptian revolution is in its infancy. I sense an uneasiness about it among the educated youth who sparked the revolution. It is for some simultaneously unglamorous and potentially divisive; it takes the revolution into the realm of pounds and piasters, out of the realms of high ideals. It is certainly not the key dynamic in any sense, yet.

It's been confirmed today that the army is to reopen the Rafa crossing with Gaza next week. There is general mystification about the actions and intentions of the army, even among very savvy youth. They don't get much of a clue about the factional struggle inside the army: in fact I would say the average Chinese intellectual has better information about the intra-factional fighting in the CCP than the average Egyptian Facebook youth has about what's really going on in the army.

Nevertheless, in civil society, parties are forming. And they do represent, respectively, the liberal middle classes, the Muslim Brotherhood and its more critical youth section - which in turn represents a large part of the rural and urban poor and youth; and then various leftist projects, and now the Democratic Labour Party. 

The former regime gets on with its life - those that are not incarcerated - and it is generally expected they will form some kind of jeunesses d'oree kind of party when they are allowed to (many of their offspring are immensely rich).

Images of Tahrir Square

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Paul Mason | 09:57 UK time, Saturday, 30 April 2011

Tahrir Square has become a mini speakers' corner, with knots of people constantly forming; sometimes impromptu demonstrations. I met a woman whose son has been snatched by the police; a man who believes his three year old daughter has been kidnapped by members of the former ruling party "to create chaos" and a small delegation of steelworkers from a town in northern Egypt who have come to Cairo expecting a "million man march".

Around the square now, dominated by the dead hulk of the burned out NDP HQ and the very much living concrete building where Egyptions have to go to get various permits, there are stalls selling revolution paraphernalia: t-shirts extolling 25 Jan, Facebook, "proud to be an Egyptian".

And small posters which are variations on a single theme: the desired execution of Hosni Mubarak. There is Mubarak in Guantanamo jumpsuit; Mubarak and the entire former regime on a mass gallows surrounded by a crowd; Mubarak and the regime photoshopped onto a team photo of a football team, with their wealth in billions displayed where the sponsors name would be on the shirt.

One man tells me: sixty per cent of Egyptians would consider their grievances satisfied with the execution of Mubarak. Another thrusts a handful of spent 7.62mm ammunition under my nose, and explains his bandaged arm, which he claims happened when the security forces opened fire on protesters here in the square on 8 April. The steelworker says, and many agree, the revolution is not over and they want the return of the money they believe has been stolen from Egypt by the former regime, and "social justice".

Talking to some of the youth who organised things on 25 January, one theme emerges: they worry about, and are struggling to deal with, the power of political Islam. The ones who feel this the most are those who are still trying to interface with the urban poor: teaching literacy classes, agitating for the formation of new parties etc.

"We can't preach in the mosques" says one, ruefully . During the referendum vote on the new constitution, he tells me, thou the official message from Islamist leaders was conciliatory towards the secularist and liberal youth, in the mosques he alleges local imams spread misinformation.

Paradoxically, though the liberal media in the west has gone out of its way not to overyhype the possibility of an Islamist outcome to the Arab spring, this is now what some of the main protagonists of the secular youth actually fear.

The other paradox is the army: it is slowly racheting a crackdown to the right and left: extending the repression and rhetoric against the Mubarak clique at the same time as banning protests, prosecuting certain activists and, as the people I met on Tahrir testified, maintaining a tight grip on poor neighbourhoods.

On the streets though there is an irrepressible optimism; a lot of cheery banter between people. I know this is normal in Egypt but there are still a lot of common casual references to revolutionary events in people's conversations.

Te key will be the elections in September: various parties are struggling to be formed, old opposition politicians vying for influence. Some of the secular youth seem to be fragmenting into their own concerns, almost psychologically resigned to the probability that they cannot "play the game" of mainstream politics. Some are forming new bands, others learning new languages, forming NGOs etc.

These are my impressions: feel free to add to them, disagree, discuss. So far nobody has asked my about the Royal Wedding.

iPad: The Great Nature Theatre of (non-rolling) News

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Paul Mason | 08:58 UK time, Wednesday, 27 April 2011


In the last chapter of Kafka's Amerika, there is a scene where Karl, the hero, gets lured into watching, then joining, a grand enterprise called the Grand Nature Theatre of Oklahoma.

As he arrives at the racecourse where the circus is to be staged he hears the sound of trumpets "not playing in tune, just wild playing. But that didn't bother Karl, rather it confirmed to him what a great enterprise the Theatre of Oklahoma was." A disorderly queue forms; nobody is sure what for. Eventually he's offered a job playing the trumpet.

I've come to see this chapter as a giant preview for the digital communications revolution in general, but after queuing for - and eventually being allowed to buy - an iPad 2 it now has a very specific resonance.

You queue; everybody in the queue wants the same thing; everybody is happy, filled with anticipation that they are going to enter the new world if they just wait long enough, answer the right questions, embrace the new experience. You get to the head of a queue and are led upstairs to join the back of a new queue; a bright young person eventually comes to greet you, take your order, sell you an extra foldy thing to cover the screen and then it comes.

You switch it on and... well, yes, you really are in a new continent. You are in the Grand Nature Theatre of Oklahoma. Above all, if you are in the business of news, you are finally back in business.

Five years ago I wrote an article which the Guardian unhelpfully headlined. In it I predicted that, as video and audio content populated the web, the realtime rolling news channel would be replaced by "instant access" content. TV execs had been right, I said, to wage a battle for the rolling news space (ITV had just surrendered), but:

"Rolling news is no longer the future. In 2004 the average broadband household spent 16 hours a week online. As anyone who uses any half-decent news platform on the web understands, the internet is faster, delivers instant depth and unrivalled interactivity. Rolling news - and here I mean the concept of a separate channel and its traditional front-end studio format - is the genre of television least suited to survive the transition to the digital age."

At the time (January 2006) ´óÏó´«Ã½ News 24 and Sky News were each being watched for 9 minutes a week by the average viewer, while the ITV offering had garnered two minutes of eyeball time. Fast forward to today and Sky gets ten minutes, while the ´óÏó´«Ã½ is achieving 19 minutes. The average weekly reach has moved: Sky got 11.6% then and gets 9.5% today; ´óÏó´«Ã½ News 24/Newschannel got 13.2% in 2006 and now gets 18.2%. See latest Barb figures .

So at one level I was too pessimistic. But on another level I was right - and once you've got an iPad, or one of the rival Android based devices, in your hands you know why.

Apart from the apps I need for writing (Pages and Celtx) and messing around (SmartGo Kifu since you ask) the apps I am using most are those produced by news organizations and for social media.

Twitter is my first port of call because - and this is still stunning to write, even though I've admitted this to myself weeks ago: Twitter is now my primary destination for breaking news.

I follow mainly news people and authoritative tweeters in the USA, China and the Middle East so if I want to know what's going on in Syria today, or Libya, I quickly scroll through the tweets of the people I trust to tell me: often these are retweets of first hand accounts such as:

Nabeel Rajab
Arrest of student at the University of Bahrain Narjis Abdullah after troops stormed a house after breaking the door 3 clock morning #bahrain

(incidentally I don't know if this is true but I can check it out).

After that, what I used to do when I only had an iPhone was scan the newspaper apps: the Guardian's estimable one; the FT's rather grudgingly updated one that costs me an arm and a leg as part of my online sub; the WSJ and NYT and Washington Post and, if I am feeling like a giant headline, Huffington Post.

But not anymore.

Now I go to the broadcasters, above all - for the richness of experience - Sky News. Sky, for the uninitiated, has launched the mother of all news apps for the iPad/tablet audience.

At its centre is a closed and finished piece of video. What we used to call a package. Hovering around this will be all kinds of related content - served in the seamlessly automatic way me and my fellow dotcom execs used to dream of with text only in our failed attempt to create a computing business website for Reed Business Information in the late 1990s.

For example there is a superb five minute (yes five minute, which for the uninitiated is Newsnight-length) VT from Alex Crawford in Misrata. Surrounding it are an image gallery of photos shot by a producer on the scene (yes a producer); a text article with more depth; a table outlining the main Libyan tribes; a quote from President Obama and an annotated map. All are inter-active and if you click on a tab saying back story there is a date-tagged timeline of similar content.

It is comprehensive. And on the iPad, as on other tablets, the whole thing sparkles. Sky shoots in HD. The screen is small but big enough to make HD look really brilliant when held about 2 feet away from you. Though Sky's app has set the industry ablaze, doubtless other news organisations will soon have something just as whizzy. But the TV people are in the lead.

In fact all TV begins to look very good on an iPad: within hours of getting it me and my wife switched off the Ten O'Clock News on the TV and watched it live on the ´óÏó´«Ã½ iPlayer instead: it was a better experience in all ways as long as you can avoid getting your Chicken Biryani on the screen.

My big complaint about Sky's app content is that it's not easy to link to it: I can't link you direct to the Alex Crawford report via this blog or via Twitter. In fact the general non-shareability of app content is, well, a bit Kafkaesque.

And that's a shame because my predictions about the TV package are being proved right, though in ways I could not have imagined five years ago. I wrote that rolling news had begun to kill the art of the package:

"Rolling news was always going to be a world of talking heads. In the process, we lost the concept of "story" - an editorial process whose outcome is a narrative with a beginning, middle and end, and hopefully a meaning. During the rise of rolling news that was something we just had to live with. Now we don't.

"The internet as a medium has no fear of the finished narrative: "on-demand" news, downloaded as individual stories or bulletins, fits naturally with the interactive instincts of web users, which they are bringing to broadband TV as it emerges. The finished story also fits in with the economics of broadband. Everything else in this medium is designed to be stored, shared or sold."

Now both the Sky News and ´óÏó´«Ã½ News iPad apps are, essentially finished news packages plus supporting text. There is an option to switch to the live output, but I have not found myself using it. What I do is follow the news as it breaks on Twitter or - if I am in the vicinity - the TV: and then click on the finished content on the iPad.

However what's happening to the finished content is also interesting. Right now, running against Sky's Misrata report is a ´óÏó´«Ã½ story about the UN probing human rights abuses in Misrata (again - the iPad app is not allowing me any form of link out to this). The video content is an unedited (except for an inpoint and an outpoint) of a head and shoulders announcement by Liam Fox MP, the Defence Secretary, about the use of Predator drones. The story as presented therefore is far more of a montage: here's the written story and here by the way is a bit of original footage of a politician talking.

The Sky package, while it uses all the techniques of shooting and editing we use on Newsnight, is interesting in that it allows people to speak at length; it is informal; the camera joggles about in the burnt-out shelter where a tank has been destroyed. The narrative is much less imposed than it would have been five or ten years ago: we are simply allowed to be there, to follow the Libyan fighters through their rat-runs, shell holes. We are "there". (A horrible thought occurs that it looks very like the Battlefield 3 trailer; I throw in this thought for further discussion.)

On top of news apps there are a growing number of apps that let you construct your own magazine from the content linked-to by people you know or follow on Twitter and Facebook. I've been trying these out - Zite, Flipboard etc. For me they are not so interesting because I am essentially into making my own choices about what to do in a stressed and busy work environment and do not want to read/view other people's trivia served up by an algorhythm that thinks it knows me. However, these personal aggregation apps are another form of digital news that I could not have imagined before.

Finally there are two apps worth mentioning that I think will complete the circle of this news revolution: iMovie and Garage Band. The audio input on the iPad is good enough to broadcast, even without a USB microphone, once edited on Garage Band; the video is not so great and cannot be zoomed; but iMovie again allows you to create and edit "good-enough" video packages.

I don't think it will be long before we start to get broadcast content made on the very devices through which it will be consumed, though you will never achieve great HD for several more iterations of the technology.

Five years ago I thought we would begin to see the replacement of rolling news by non-rolling, and at the same time more instant and less "presented" news content. I had no concept that digital devices like the tablet would come along. Nor that e-Books would take off (I downloaded and found the relevant passage from Kafka's Amerika on the iPad's Kindle app in the first five minutes after I decided to write this post).

What's happening now is the emergence of rich, instant digital content alongside rolling news; plus the emergence of reliable social media as a news source, circumventing the mainstream media and at the same time forcing its agenda (I learned most of what I wanted to know about the Bristol riot from the social media and even now for richness and diversity of coverage of that event and its aftermath, social media beats mainstream).

Now, in the news business, everybody is in the same business. What matters is richness, shareability, and the ability to in some way monetise (for everybody except the ´óÏó´«Ã½) this new, attractive content.

The crucial attribute for tablet news is what I call "sparkleosity": does it move, swoosh, twinkle? Does it invite me do do things with it, share it, come back for more?

I've always said to newspaper execs bewailing the unwillingness of the public to pay for news: build something worthwhile and they will come. Alfred Harmsworth produced 40 dummy issues of a new kind of newspaper before launching it on the world and changing the whole business: it was the Daily Mail and people liked it so much they began to form the same kind of queues to buy it that you now see in the Apple Store (the initial print run of 100,000 had to be in six months).

Actually the Daily Mail's website is now booming because it's followed the same instinct: launch something different online to what you get from those blue-black headlines of middle class doom on paper. (Interestingly its iPad app sucks, to offer a personal opinion: it lacks the sparkle of its website - but as I say everbody is just in year Zero).

As it turned out it was not the newspaper men who produced something new and sparkly: it was Steve Jobs, and the guys at Sky who came up with what for me is one of the first apps that totally lives and breathes on the tablet platform.

So, as the billboard shouted to Karl in that fictional mid-western racecourse, so the tablet shouts to news executives everywhere, breathlessly:

"The great Theatre of Oklahoma calls you! If you miss your chance now you miss it for ever! If you think of your future you are one us! Everyone is welcome!"

** Just so I meet all the requirements: as well as the iPad there are numerous tablet devices and they all do roughly the same thing, from Samsung, LG, HP and upcoming Sony. Here's a to a bunch of them.

Greek deficit 10.5% of GDP. That funny Orwell feeling...

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Paul Mason | 17:25 UK time, Tuesday, 26 April 2011

Emails from the Greek finance ministry always drop with a title that says "?????????" since the ´óÏó´«Ã½'s email system cannot cope with the Cyrillic alphabet. However today's missive from the Greek finmin is worthy of those question marks plus a famous 3-letter acronym that does not stand for World Taekwando Federation.

Here's the graph issued by Mr Papaconstantinou's office:

greekversusEU deficit reduction

It shows that even though the Greek deficit is higher than expected, it has still done better than anybody else in Europe in deficit reduction in a single year. Unfortunately there is no Bafta for this achievement, nor any form of credit in the international sovereign debt market.

Ireland, bailed out for its role as a large, English-speaking quasi-Grand Cayman in the Euro banking system, may have done worst, but it is still the most likely country to achieve leniency. Greece, which on its own figures has made good progress, is now being openly discussed as a candidate for a swift boot up the rear-end out of the zone altogether.

German economic adviser Lars Feld that Greece should restructure (ie a controlled default): adding of course that Germany could not support such a default.

As we watch the inevitable happen, in slow motion, always preceded by disavowals and denials from those in power, it always calls to mind a paragraph from Orwell's diary on the morrow of the German invasion of the USSR:

"Remarked to X that, for the past few years, have had the feeling of waking up knowing more about what is about to happen in the world than any member of the Cabinet. Less to do with powers of prediction, but with the power to grasp what kind of world we are living in."

Revolutions and the price of bread: 1848 and now

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Paul Mason | 12:09 UK time, Thursday, 21 April 2011

breadprices 1848 and now

Sometimes one graph says it all. Here's one that says quite a lot. In the graph above the little blue crosses indicate the price of wheat in certain countries that have experienced social unrest this year. The further to the top right the cross is, the higher the medium and short term price hike the country has suffered: for wheat and therefore for bread.

Saudi and Algeria are stable, Occupied Palestine, Jordan and Egypt are on the high end of the price spike; Tunisia, Yemen, Morocco and Lebanon significantly high. There is, therefore, a rough - but only - rough correlation between bread prices and revolutions. So far.

However the big splodge of colour in the middle concerns a completely different period in history: the revolutionary wave of 1848. In 2000 economists Helge Berger and Mark Spoerer calculated the scale of bread price inflation in key locations of the revolutionary wave in the era of Marx and Metternich.* Economists at Barings have used that data to produce the chart above, and it makes pretty stunning viewing.

The red triangles show violent revolutions: France, Switzerland, Austria, Prussia, Hungary and a host of German principalities saw violent overthrows correllated with a food price spike.

England, famous for the massive damp-squib Chartist demonstration on Kennington Common, and not much else in 1848 apart from some high-spirited Marseillaise singing in Soho, sits where Saudi sits now: almost no food price inflation. The green squares show places which achieved something similar to what's been happening in the Middle East - immediate constitutional reform on the edge of an insurgent's pitchfork.

There's a lot to be written about this, and nobody would be crazy enough to say food prices were in any way a sole causal factor of 1848 or the revolutions today: but they are clearly contributory factors.

The interesting thing, of course, is that neither the food price spike nor the revolutionary wave has yet subsided in the developing world, so the blue cross part of the graph has to be seen as highly interim. As the Barings guys write:

"There were, undoubtedly, deeper seated causes to the Jasmine Wave than the price of a loaf of bread. But to paraphrase Berger and Spoerer's investigation into the economic causes of the revolutions that rocked Europe in 1848, while food inflation does not provide the brains, it does supply the brawn."**

Makes you think.

* Helge Berger & Mark Spoerer, Economic Crises and the European Revolutions of 1848, The Journal of Economic History, Vol. 61, No.2, June 2001, pp293-326.

** Barings Asset Management note: The Sugar Rush and the Jasmine Wave. 20 April 2011.

Wim Wenders: With 3D "the door is open". Interview.

ADMIN USE ONLY | 17:43 UK time, Tuesday, 19 April 2011

"Pina is trying to say the most simple things," says Wim Wenders, his voice close to a whisper: "Pina invented an art that is so obvious it's unbelievable that nobody came up with it. Pina is interested in who we are and what moves us."

In 2009 Wenders, the acclaimed film director, was about to begin a documentary collaboration with German choreographer Pina Bausch, chronicling her work at the l. But Bausch died suddenly, days before the shoot was to begin:

"I cancelled the film. I pulled the plug - it seemed impossible. And weeks later I realised it was the wrong decision; there was still a film to make about that look and her work. And there was still all these pieces that she'd programmed at the theatre, so we could film it together."

The result is - a visual memorial for Bausch: her work, as always, challenging, troubled and now shot as dance has never been shot - up close and in 3D.

There are Wenders' trademark shots, drifting in and out of the dancers' POV. There is closeness, immediacy; even the rain in Bauch's watery masterpiece seems to have mass. Every drop. For Wenders the new medium is a revelation:

"I thought it would be good to be close. And with 3D you not just have a close body you feel the aura of a person. All of a sudden the body has a volume. All of a sudden there is a different physicality that you ever see on a screen. I wanted to take the audience as close as possible to these people and to their horror."

For Wenders the Pina documentary is the latest stage of a long journey. In Wings of Desire he commemorated the last days of Cold War Berlin; with Paris, Texas and Until the End of The World he took the road movie to new extremes - then switched to documentaries, celebrating the music of another iconic city, Havana, in Buena Vista Social Club.

He sees the move to 3D as something historic and irreversible in the development of cinema. But it's a medium that's hardly been explored: there are a dearth of scripts, written to exploit the possibilities, says Wenders:

"I'm working on it. I'm trying to find a story that has that affinity. It's not obvious I must tell you. Cinema has done marvelous things for more that a hundred years with the language we had. We used dollies and put the camera into helicopters and cars and on our shoulders and stuff in order to create the fiction of cinema. Now we have the access - and nobody walks through the door for heaven's sake!"

It was Georges Méliès, in the 1890s, who switched cinema's path of innovation from "how do you make a better camera?" to "how do you mix closeups with wides"? Not stopping there, he moved quickly to multiple exposures; nudity and science fiction. Within ten years of its invention, arguably, all the genres and most of the techniques of 2D moving imagery had been discovered. Now we're at the very beginning of that process with 3D.

Does Wenders think cinema might become closer to the subject with 3D, less reliant on the editing techniques and semi-theatrical shot lists?

"I think it's a very inviting medium to have. [It allows you] to be in the presense of someone. If you are in the presence of somebody you don't have to cut all that much. That presence is more overwhelming. And also [it allows you] to go places. 3D allows you to discover a place in a whole different way. "

"It can transport you there. The horizon is over there - plus you have something close. And you are, as an audience, taken into somebody's world and you can visit it. That's what you could never do in a movie. There was always that distance of the artificial two dimensions. "

"With 3D there is a whole new technology and that is obviously pushed by the industry. And there is also a language. The language has to be used by people who are interested in it; who can extend the realm of expression. And I don't see the studios doing that. They have no interest in that. But that's the history of cinema. It's always been both industry and expression."

Wenders is visibly transported when he speaks about the new medium: his eyes shine. He speaks of 2D cinema as "the flat screen" - ignoring the fact that 3D is merely a flat screen and a pair of crazy spectacles. He speaks of 2D as "movies" and, implicitly, 3D as something else.

He had been in negotiations to direct Wagner's Ring cycle at Bayreuth, and film it in 3D, but talks broke down. So is there anything else he'd like to direct in the new format?

"'Pina' was not a classic documentary because [it involves] chorographers, dance and expression. I would love to use 3D in the classic documentary: go somewhere, into somebody's world."

"The other thing I would like to do is find a story that could use 3D, that could not be done any other way. Over all I feel we have only scratched the surface: there is so much left to discover.

Could he go back to two dimensions?

"Going back is already the expression. I feel that it would be going back. The door is open. I have all these wide spaces now. I want to go there."

Wenders is in London open an of his stills photography, at the Haunch of Venison. Shooting handheld, on film, as he's done since childhood, he produces giant often empty scenes:

"A lot of my movies start with a desire to explore a place. Most of my movies start with first - a sense of place. Then you have a story and characters and before you know it they take centre stage. And characters take over. And the places necessarily step in the background. In photography I can do the opposite I can give the place the central part and the people who show up are the extras."

Some of Wenders' photographs explicitly reference the look and feel of American painter Edward Hopper. As with Hopper, the loneliest scenes occur when he dispenses with the human subject altogether and conveys the loneliness of a scene by the simple absence of life and movement. How big an influence was Hopper?

"Hopper was a great experience in my life: I was blown away with not only the formats but also the subjects. Cities - lonely people, alienation. In a strange way it coincided with making moves about similar subjects. I was facinated by the cities - I was facinated by the lonesomeness and Hopper became my hero painter. Also, in my photography, I'm more interested in the history of painting than in the history of photography."

Both Wenders and Pina Bausch were products of post-war Germany: both, effectively, ripped up and started afresh their respective genres - Wenders famously improvising an entire film on set in Wings of Desire, the set being the bombed out bohemia of West Berlin in the 1980s; Bausch forced dancers to stumble, eyes closed, through the angst-ridden chair-scape in Café Muller, to beat their chests and hyperventilate a the soil-strewn stage for Stravinsky's Rite of Spring. Says Wenders:

"Pina realised she was looking for someone else. Something deeper, something more human something existential. She didn't want to change dance - she said let me start again."

Watch my interview with Wim Wenders on Newsnight, 2230, ´óÏó´«Ã½ TWO, 19 April 2011. And on iPlayer for seven days.

USA: That ratings agency downgrade meeting (Scoop)

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Paul Mason | 10:47 UK time, Tuesday, 19 April 2011

INT. DAYTIME: High above the capital city of a major country two credit rating executives, their sleeves rolled up, their Blackberries switched to silent, stare at each other over a desk:

"Hey boss we got another one o' those countries getting close to our proprietory benchmark for too much debt!"

"Bring it on! What's the deficit?"

"9.5% of GDP"

"Debt?"

"97%"

"What's the political complextion of the government?"

"Mmm. Tough to tell: got a pinko head of state but a tough minded legislature full o' fiscal hawks."

"So a notch or two downgrade should bring 'em into line? Can we do that before lunchtime?"

"Yeah, but there's a problem. They're about as close to being a 'true sovereign' as you could get. Their currency's pretty crucial to the global economy and they can print it."

"So they're not pegged to the dollar?"

"They are the dollar. The country's called America."

"Yikes. I see the problem. Technically speaking this America place prints the global currency of last resort so it can inflate away its own debts, devalue the currency, impose the cost o' crisis onto everybody else."

"Yeah well that's what they did last time."

"There was a last time?"

"Sheesh I was forgetting, you came thru on the fast track from business school. You don't remember the Plaza Accord? 1985?"

"Heck I was 10 years old!"

"OK well, the 101 version is: the US negotiated with Japan and Germany to depreciate the dollar by 50% relative to their currencies enabling them to recover from recession and slash their trade deficit."

"Cool and the Germans and Japanese just agreed?"

"Yup. America had moral authority and Germans and Japanese were seen as rising power, a bit like China now."

"Great Google-bee! Ay-and what happened to them."

"Well the Japanese suffered a property boom and bust and then..."

"Ah, that bit we did do at B-school. Boom, bust, stagnation. Wow. So this America place: they can just boss the world around and tell 'em what to do. They can use their global-status currency to offset the costs of fiscal adjustment and basically make other folks pay the cost while they go on spending?"

"Well this is the problem. That's a moot issue now. These guys spend, what, something like $700bn a year on defense? But for some reason now they've taken to not invading places. They've got supposed allies all over the earth who don't seem to do their bidding. There is, well, a slight sense of the unravelling of global power."

"Okay this is serious. Has the president guy got a deficit reduction plan?"

"Plans to eliminate it over a 12 year period. It's a long timescale but pretty tough."

"And the legislature?

"Some of em believe the world was created 3,000 years ago! They'd run a budget surplus tomorrow if we asked them."

"And this place is triple-A, right?"

"Right."

"And the technical chance of them defaulting on their debt is?"

"Well unless some kind of alien invasion happens, leading to civil war and mass starvation, dengue fever, millenarian sects take over the seats of power etc. Zero."

"So whadda we do?"

"OK, well there's an election coming. And they keep having these ridiculous political stand-offs over ideological differences in the budget, leading to all kinds of weird threats to shut down the state."

"No kidding?"

"So while the technical possibility of default is zero - there is a greater than technical possibility that we, ourselves, will take em down a notch because of all these political shenanighans. Political paralysis is real, no?"

"Ah! I am getting a lightbulb above my head."

"Yup. We could put em on negative watch."

"We could."

"We could put pressure on them to eliminate the deficit faster than planned by issuing an 'outlook negative' warning. Which is, as you know, a warning that we ourselves could issue a warning."

"But that could be seen as political pressure: intervening into the political debate in the most powerful country in the world. Do we really want to court controversy after all that stuff with the banks?"

"That's very wise boss. That's why you are the boss."

"So whadda we do?"

"I propose we wait and see what S&P do, first."

Swazi King heads for Abbey - as tear gas drifts at home

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Paul Mason | 21:16 UK time, Friday, 15 April 2011

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Newsnight has learned that the King of Swaziland, Mswati III, is planning to visit London for the Royal Wedding, bringing an entourage of "around fifty" according to sources inside Swaziland.

Members of the Swazi royal family have told relatives they expect to stay at London's Dorchester Hotel, where a double room costs £450 a night.

Swaziland's economy has nosedived under the impact of the global financial crisis, an aid freeze by NGOs worried about corruption, and declining exports. 63% of its population earn less than $1.25 a day, and 80% earn less than $2.

The news comes as Swaziland's political situation remains tense. On Tuesday police in Swaziland using water cannon and teargas, having previously arrested the entire leadership of the country's trade union movement.

Meanwhile two student leaders arrested during the protest on 12 April have been charged with terror-related offences after police claimed to have found explosives at the opposition's headquarters.

Buckingham Palace said they were "not in a position to confirm or deny" that King Mswati is on the guest list for the Royal Wedding. The Dorchester refused to confirm or deny that King Mswati will be their guest next week.

Buckingham Palace have so far declined to issue a VIP guest list for the wedding but I understand that, while no non-Royal heads of state have been invited, "over 40" members of foreign royal families have been invited "as is the protocol" on occasions like this.

Click for my 2006 exposee of the royal-sponsored "goat cure" for HIV in Swaziland.

After 26 March it's June 30... for some

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Paul Mason | 19:41 UK time, Wednesday, 13 April 2011

The unions have been struggling for weeks to work out what to do following the demo on 26 March. Today's RCN no-confidence vote is one response. I understand an informal alliance of public sector unions is about to go a step further.

The PCS union has voted to ballot its entire membership for strike action - over what it perceives as attacks on pension provision and departmental cuts. Meanwhile the education unions NUT and ATL are also set to ballot, with the lecturers' union UCU already having a mandate for strike action.

I understand there is informal agreement that the strikes will be called on the same day: 30 June.

Should they achieve a yes vote and a full turn out, this could put up to 750,000 people out on strike on a single day, say union leaders.

Signally not taking part are two key, Labour-affiliated public sector unions: Unison and the GMB, whose leaders believe they cannot deliver strike action until October, if at all.

Vickers: The long grass kicks back

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Paul Mason | 11:45 UK time, Monday, 11 April 2011

The Independent Commission on Banking , out today, says the retail arms of banks must be protected against risks taken by their investment arms. But it stops short of recommending forced separation. It recommends:

  • ringfencing the UK retail banking operation as a subsidiary with its own requirement to hold capital
  • a 10% capital requirement (so a bank has to hold £10 for every £100 of risk it is exposed to) - as compared to a 7% requirement under the Basel III proposals
  • this is in addition to imposing potential losses on bondholders to the tune of about 3% of capital
  • And it wants Lloyds to sell many more than the planned 600 branches

The report more or less rules out all forms of radical structural reform to banking: ie narrow banking only, total reserve banking (Kotlikoff) etc.

But it does leave open the possibility of a Glass-Steagall type solution that splits retail from investment banking. It says this may be necessary if the "ringfencing" either cannot be made effective through regulation or the "costs" of ringfencing are not significantly lower than separation:

"4.87: Some form of retail ring-fencing appears therefore preferable to full separation to the extent that: a) the rules around the subsidiary are firm enough to secure most or all of the benefits of the reform; and b) the costs of ring-fencing are substantially lower than those of a full split. Unless both of these conditions hold, however, the balance of arguments might favour strict separation."

It also says the case could "quite easily be made" for a higher Tier I ratio than 10% - Sir John himself mentioned 20% as proposed by certain commentators.

What's interesting here is the way the Commission is creating the intellectual framework for the future debate: it recognises that a degree of higher capital and a degree of separation can do the essential job of charging the banks for the implicit guarantee that arises out of the problem of "too big to fail".

It recognises - implicitly - that if you raise the Tier I ratio to punitive levels the costs outeweigh the benefits: you effectively go back to narrow banking because banks simply cannot use their complexity to provide value to the customer. So it seeks a structural as well as a capital solution.

But it thinks you can achieve the structural through a distinctly "non-radical" (Vickers' words) and complex set of rules, designed to operate in those panicky few days when major global universal banks are trying to unravel their businesses (read Andrew Ross Sorkin's for a sense of what such days are like)

The issue I tried to question them on is this: since you raise the "cost" of separation being too high to justify full Glass-Steagall - the issue is "the cost to whom"? The implication is that the costs to banks here figure in the calculation - but why should they?

Why are the costs to the banks being privileged above the potential costs to the taxpayer - currently, on the last crisis, calculated at 60% of GDP by the Commission itself?

If you separate investment banking from retail deposit taking, and then remove any protection - implicit or explicit - creating in effect a synthesis of old-style investment banks crossed with the new-style hedge funds - then the theoretical cost of such a bank/fund's collapse to the taxpayer is zero. There will be a cost to the taxpayer in the form of lower competitiveness, lower tax take, maybe even capital flight - but the same arguments Sir John just advanced against this on the current proposals hold: beware the reputational risk of moving your HQ; and there is no proof the interests of the City as a financial market and the health of british universal banks are coterminus.

Meanwhile of course, in the case of full separation, the cost of banking to the consumer rises - because the remaining retail bank has to hold more capital AND - probably more important: its bondholders know they can lose their shirts, even if depositors get saved. However, it is a matter of degree.

The point I take away from the press conference is: Glass-Steagall, as originally desired by Vince Cable, is still on the table. Kotlikoff, narrow banking etc are off.

Put another way: the Coalition kicked radical banking reform into the long grass by giving it to Vickers - now in his choice of words and the extreme circumspection and caveat-laden wording - he has kicked it back to them.

We hope the Chancellor and Ed Balls will come on Newsnight tonight to thrash it all out to a conclusion. Yes, and there is a flight of Gloucestershire Old Spots on the approach path to London City Airport right above my head!

Vickers splits the difference between risk and City interests

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Paul Mason | 08:51 UK time, Monday, 11 April 2011

What was the problem the Independent Commission on Banking was trying to solve? Once you had defined the question you had already defined the scope of the anwers. So here's the key paragraph of the report, in full Orwellian glory:

"[The proposed measures] should therefore reduce the probability and/or impact on the UK (including on the fiscal position) of financial crises in the future. At the same time they appear likely to maintain the efficient flow of credit to the economy, protect basic banking services and support the ongoing competitiveness of the UK economy including the City."

For those mystified about the multiclausal nature of this self-defined success criteria, and their highly "maybe" nature - read my last blog. With a few hours to go before Vickers' remit was set, the banks insisted that any proposals must meet these last criteria: ensure the banks keep lending and not harm the competitiveness of the City.

They could have done more, this passage implies, but it risked harming the competitiveness of the City.

Let's be frank about where these proposals sit on a scale of 1-to-10 from no change to radical: they score about 3 structural issues.

Britain's banking system did not collapse and its deficit did not soar to near unsustainable levels because there were not anough different coloured ATMs on the high street. On the core issue of too-big-to-fail nobody is pretending they offer a solution.

I will give you my detailed view when I have read the detail.

Will Regulation W create a UK "Dodd-Frank-Lite"?

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Paul Mason | 12:02 UK time, Friday, 8 April 2011

regulation 2

As I prepare for the Vickers Commission's report into the future of UK banking I am swotting up on "Regulation W". This is a rule in the USA that prevents US banks from doing a substantial amount of business with, and counting on the capital of, "affiliates".

A senior banking source told me they believe the commission will not signal support for any Glass-Steagall type separation of savings and speculative banking.

Instead there will be in indication that Britain could adopt a "Regulation W" type solution.

In the USA this means banks can only do 10% of their total business with any single affiliate; that only 20% of their capital can come from affiliates; and that all loans to affiliates have to be secured. It is, in a way, a remnant of Glass-Steagall that US banks have been whingeing about for some time (because in Europe you can just have universal banks that do everything).

If you combine this with the "living will" approach to bank structures - where they have to state how their complex global structures would be bailed out and broken up in the case of another banking crisis you get a) a clear structure of affiliates and b) a legal limit on the amount of jiggery pokery that can go on between them.

It is not Glass-Stegall but comes close to being the basis for "Dodd-Frank-Lite", ie a forced internal separation of deposits from high risk banking (and to boot it strengthens the claims of depositors over the whole institution should it go belly up).

One of my contacts in the world of financial law has provided the above handy diagram on how Reg W interacts with the mainstream banking regulation on capital adequacy (Reg Y). If I am right, you may be looking at a picture of the future structure of HSBC or Barclays in the UK.

Now, however - a question. Does it meet the test laid down by Bank of England Financial Stability boss Andrew Haldane, two years ago? :

"Reversing direction will not be easy. It is likely to require a financial sector reform effort every bit as radical as followed the Great Depression. It is an open question whether reform efforts to date, while slowing the swing, can bring about that change of direction."

To me, introducing a regulation that was extant right the way thru the US banking crisis, but failed to stop it, does seem to fall short of the 1930s response.

Short of the absolute legal, cultural and practical separation of deposit taking and investment banks, any set of rules that seeks to govern the internal relationship between the two is open to the kind of gaming we saw in the run up to Lehman. Then, the banks managed to create a whole system of institutions known as shadow banks whose ultimate liabilities and ownership became very misty.

However we'll see what the details are, and the responses, on Monday. One man's Regulation W could, at a stretch, become another man's Dodd-Frank-Lite, especially if the new rules require a "hard restructuring" of banks, with internal demergers, relocations etc.

If they do go for Reg W, it is likely the Treasury will put someone on the Eurostar immediately and suggest to Brussels that this be adopted as a pan-European solution. Eurozone banks don't like the idea, but they are probably going to have to lump it, which is why some of them have been lobbying hard against its inclusion in Monday's report.

Another devil in the detail issue with Reg W is that in the USA it only applies to onshore activities: an American bank in London doesn't have to obey the regulation. So one of the big questions will be whether this does, as warned, drive some UK banks to restructure in a way that puts their main banking business or holding company offshore.

Meanwhile my attention has been drawn to the following paragraph in the Committee's .

"The Commission will also have regard to the Government's wider goals of financial stability and creating an efficient, open, robust and diverse banking sector, with specific attention paid to the potential impact of its recommendations on:
Financial stability; Lending to UK consumers and businesses and the pace of economic recovery; Consumer choice; The competitiveness of the UK financial and professional services sectors and the wider UK economy; and risks to the fiscal position of the Government."

Who can be against "having regard to"?

I understand this paragraph was inserted very late, just prior to the announcement of the remit, on the insistence of the UK's banking industry. If you believe Britain's whole economic model, culture and institutions could not survive without the City, then it makes sense to insert these caveats.

However, rightly or wrongly, it is believed in senior banking circles that the above set of caveats effectively allow the Cabinet Committee on Banking to make an economic (ie pace of recovery) and a competitiveness (strength of UK banking sector) judgement to weigh alongside the judgements on financial stability.

In short it could - am not saying it will - provide an economic rationale for avoiding serious bank reform beyond Basel III and what's already proposed.

If so we will be left with the proposed breakup of the high street banks to encourage more competition. That is you will have more choice over what colour of ATM you use and what manner of sales propositions are thrown at you, should you succeed in making your way to the front of the queue in a branch.

My pencil is sharpened for Monday. Even though it's an interim report, it will rule a lot of stuff out, even if it doesn't plump for the final shape of the solution. We'll know by 10.30 am what the parameters of the political debate will be.

Trichet: welcome to my great big fat Euro fiasco

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Paul Mason | 19:02 UK time, Thursday, 7 April 2011

unit labour costs in europe = germany down, the pigs up

.

It's Vorsprung Durch Technik versus "manyana", cold efficiency versus laid-back Mediterranean sloth, it's the Europe of no motorcyle helmets versus the Europe of precise train timetables. It is every cultural stereotype you've ever heard about the two kinds of people who inhabit this continent.

And for now, economically, it's valid: there are two Europes and they are diverging.

It's no longer a two speed Europe: it's a two tier Europe with the bottom half spiralling into low growth, penury and social crisis - and the top tier is booming. German industrial output, up 15% year on year today, stands in contrast to a slump in Ireland, Greece and now - once the austerity kicks in for real - Portugal.

Portugal last night joined the club of countries needing a bailout. It'll probably take E80bn to sort out - but that's not the problem. The problem is the conditions attached will be further austerity: the very austerity the Portugese parliament rejected; and - from an objective standpoint more important - which will make it difficult for Portugal ever to grow its way out of crisis.

Onto this two tier Europe - Greece's economy has shrunk by 6% over two years, Ireland's by 11% - the ECB today heaped more pain. To combat aggregate inflation at 2.6% it has raised interest rates. To the cries of pain that this will weaken the recovery in the stricken countries it has plugged its iPod in and listened to its same old mix of theme tunes: independence; price stability; the belief that the current crisis can be solved by cheap, rolling loans, their terms loosened ever onwards as the real economies doing the borrowing shrivel up and starve.

What's the source of this great divergence? It starts with the design of the Eurozone itself: many economists believe Germany was allowed to join at a devalued rate, obtaining a permanent trade advantage with the south. Then, just as the periphery glutted itself on unsustainable private debt - the credit cards, the four-wheel drives, the extra villas by the shining Med - Germany enacted labour laws and welfare reforms entitled Agenda 2010, which, as its critics write, allowed German bosses to squeeze their workers just as bosses in Ireland and southern Europe were doling out extra pay and benefits to their.

The graph at the top of this post shows the results (thanks to Costas Lapavitsas at ).

There is a huge competitiveness mismatch and a resulting huge trade mismatch. The south became an export market for north-European manufactured goods, and a credit market for the north-European banks - which may have been technically constrained to be dour and presbyterian by domestic law but nevertheless piled into the Irish and Spanish property bonanza with gusto.

Everybody benefited from the credit bubble; but Germany has above all benefited from the Eurozone's structural imbalance.

We are now in the process of picking up the pieces but it's not easy.

In the first place, the level of austerity being demanded in southern Europe and Ireland is starting to challenge these populations' very concept of the social deal they thought they had. I am not talking about the Euro, the social chapter: it's what they thought they'd achieved by throwing off fascism, military dictatorship or in the case of Ireland decades of isolation and backwardness.

What the new fiscal reality says to them - and the new reality of having the ECB tell them their interest rates have to go up even as their economies go down the pan - is that the social deal was an illusion.

There is now growing traction for the idea of a controlled, voluntary default by the three stricken countries. That is, they restructure their debts and banks and pension funds in France, Germany and Britain take the hit. The longer this can be postponed, the better the shape the banking systems of these countries could be in to take the hit. But there are growing calls for example among unions and left wing parties in Ireland, Greece and Portugal to declare the debts "odious" and repudiate them.

But a default would break the rules of the Eurozone (they're being flouted anyway). And what is not often understood, meanwhile, is the amount of support being effectively given to the periphery by Germany's central bank, via the ECB's liquidity operations (put simply, the ECB issues short term loans to countries on terms that put at greater risk the money that's supposed to be risk free supplied by the Bundesbank).

The two, logical, technically elegant solutions are these:
a) the periphery leaves the Eurozone
b) the north takes control of the whole system but pays the price through a fiscal union in which taxpayer Euros in Hamburg and Helsinki pay for benefits in Athens and Athlone.

It will be noted that b) is unpalatable to the electorates of north Europe, and anything approaching it is proving so unpopular that it is altering the electoral landscape - in Germany and Finland and probably soon in France (Belgium doesn't have an electoral landscape and the Netherlands, with the rise of the right, was already well and truly altered).

However (a) is becoming very palatable: not just to the leftish plebeian masses in the stricken countries but also to the electorate of north Europe.

A way between these two extremes could be negotiated if there were skilled, authoritative, charismatic leaders but... I don't even need to finish the sentence. The EU is not very good at leadership and vision right now: it's good at fiascos.

And in his justifications for the rate rise - technically correct and defensible - ECB boss Jean-Claude Trichet just welcomed us all to a great big fat fiasco, no less mesmerising than a tacky reality show, but of considerably greater import.

Finance minister: Portugal needs a bailout

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Paul Mason | 19:36 UK time, Wednesday, 6 April 2011

Portugal managed to borrow E1bn, short term, at interest rates so prohibitive that the finance minister has now announced they will seek a bailout. The prime minister is about to go on TV and admit defeat for the country's two year strategy of deficit reduction aimed at retaining financial sovereignty, which it will now effectively lose.

Though it's a humbling moment for Portugal, there is a chance this is endgame for the Euro crisis - IF - and that is a humongous if - the Eurozone and IMF can stop the cycle of austerity and low growth at the periphery here, so it does not spread to Spain.

I visited the country and spoke with ministers a month ago. Then they were determined to resist bailout - and they've gone into the snap election on a programme of avoiding it. That programme is now null, and it will place pressure on the opposition Social Democrats (confusingly named - they are centre right) to explain what their programme is (they had avoided it until now, and are likely to win the election).

For a link to my video report on the specifics of Portugal's crisis, go here. More tonight on Newsnight

NHS: Cultural unease about doctors, power and cash

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Paul Mason | 10:11 UK time, Tuesday, 5 April 2011

On the windswept celtic edge of Britain there is a small GP practice that I know well. I bump into the guys when I'm on holiday, often in the pub, or on the beach. We talk about rugby, they pass judgements on the latest minor politician to get the job of health secretary.

Occasionally, being inveterate medics, they slip sneaky questions into the conversation designed to find out about my health. And occasionally I tell them about my own GP in London, which makes them go pale and order another pint.

I'm registered with a busy London GP surgery that has decided to be a kind of primary health factory. You can walk in and get seen quickly; there are numerous clinic-style services; the receptionists are friendly and efficient. But in two years I have never seen the same doctor twice.

Most of my encounters have followed a pattern: I describe, as clearly as possible and using medical terminology, what my long term conditions are; they scan the notes on the computer to check this is true; they make a brief binary choice: is the problem simple enough to be resolved by tablets or complex enough to send off into the hospital system?

It works. In fact it works better than trying to be a village GP in a city.

However, and this is no judgement on the various individual doctors, I feel my mates on the beach will know their patients better; be more accountable if things go wrong etc.

So why is this relevant to the NHS Bill fiasco we've just seen played out in parliament?

Well my mates on the beach want, primarily, to be doctors; but increasing numbers of big-clinic health factory style GPs have expressed the desire to be "commissioners". And this has touched a nagging nerve among the English middle classes (I say English because the main thrust of the Bill does not apply to the rest of the UK).

What the NHS Bill has run into is various forms of lingering unease among the public about private involvement, unequal treatment and the pecuniary motives of doctors. It is as much cultural as about economics or health.

Most people now realise that individual GPs are earning a heck of a lot of money. For that, many people would prefer some modicum of continuity and holism in their primary healthcare - but some, like me, will swap it for quick, no-nonsense treatment, above all, swift triage into the specialist/hospital system when necessary

As people began to realise the new system would reward those very GPs who had begun to form mini health factories, and give them ultimate power - and heard stories of health bureaucrats eagerly quitting their jobs on PCTs to form "commissioning support" companies - there arose a cultural worry that I think lies behind all the technical and economic objections to the Bill.

Because everybody who's been to hospital knows that hospitals are full of specialists who know a lot about a specific subject, and full of hi-tech equipment. Meanwhile GP surgeries are full of harassed docs who know a little bit about everything, and inhabit the world of coughing grannies and sick children. The concern arose as to whether these GP clinics could effectively spend £60bn on the health needs and "choices" of people they only really know from a computer file.

As long as the NHS looked like a big, complex, half-market/half-state monolith all these fears about "doctors on the make", health fatcats leaving the NHS to become management consultants the next day on twice the money - which were always there - remained submerged.

But once the NHS internal market is perfected, and transparent, even if it only exists as yet on paper, these worries about money, accountability and power bubble to the surface.

It was these worries that the Health Select Committee tried to address in its , published today. They grilled Andrew Lansley and various health officials about the potential conflict of interest between a GP holding money and making a decision whether to spend it with either a hospital or their own clinic.

This is what they found:

"79. The Committee finds that the evidence provided by the Secretary of State and officials runs counter to the direction of policy. If integration of primary and secondary care commissioning is important, then separating them in order to support the proposed system architecture may cause significant harm to the commissioning system as a whole, and should be reconsidered."

The detail can be found in the report, . But the political problem lies in the fact that sections of the electorate had already begun to doubt the new system could protect them from two sets of rival health elites - GPs verus hospital consultants, backed by their respective managements - simply gaming the system to extract a surplus derived from the supposed achievement of performance standards set by themselves.

This, after all, was what made civil servants in the Treasury originally try to delay Mr Lansley's White Paper. An unnamed civil servant :

"The white paper got bounced back because there was no way the Treasury could sign up to a proposal which handed £80bn of public money to 35,000 GPs who are basically unaccountable private businesses."

All the other stuff - mutualisation, the switch from recording inputs (number of ops) to outputs (better health), the bonfire of targets etc - even the effective de-nationalisation of the NHS and arms' length accountability of the Secretary of State - seems to have been eclipsed at the level of grassroots of politics by this nagging concern.

Because the policy pause is not only driven Liberal Democrat opposition to the Bill or the popularity of the Andrew Lansley (parental advisory!).

The most perfect machine on earth for transmitting the anxieties of the English middle class is the Conservative Party - and, through voices as diverse as , Stephen Dorrell, Sarah Wollaston and Nadine Dorries (not to mention ) that's what it has done.

If you read the subtext of , there is a big signal contained within of the opposition's willingness to go on experimenting with a pubic/private mix of provision; an implicit self-criticism over targets etc. It was not a defence of the NHS as it existed on 5 May 2010.

So, weirdly and by accident, we may now have arrived at a moment many politicians have shied away from: a real, strategic level debate about what we want from the healthcare system.

Such a debate would have to honestly address the productivity failures of the NHS; the problems of inequity that have dogged attempts to emulate the best of the American health management and promotion systems; the reality of drug and treatment rationing. Plus the problem of where private money fits in a public system - whether it's the 60 quid I pay for private physio, the growing demand to be able to co-pay for drugs nixed by NICE, or the issue that dare not speak its name: social insurance.

It would have to frontally address our cultural unease about doctors - what do we want them to do, how powerful do we want them to be, and how enmeshed in the financial management of a system that pays them?

So with this flurry of interventions - from Mr Lansley, Ed Miliband and the Select Committee - it looks like the public debate has finally begun.

It's only a pity it has begun halfway into the parliamentary process.

Portugal: 8.6% real interest rate

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Paul Mason | 21:54 UK time, Monday, 4 April 2011

portugal 10 year bond yield

This graph shows what it costs the Portugese government to borrow money over 10 years: 8.6%.

I've just checked with my own bank and they're offering me 9.9% unsecured over 10 years so my "spread" over Portugal is 1.3 percentage points - much less than Portugal's spread over Germany.

I can't be bothered flagging it up on the actual graphic because I am glued to the ´óÏó´«Ã½'s Lambing Live, but the spike in May last year is the Greek bailout, the spike in December the Irish bailout and the current spike - it is a spike - means a bailout is as sure to follow as a little Swaledale lamb is sure to pop into Kate Humble's hands during live TX.

Right now it's nearly as risky to lend to a private individual as it is to the government of Portugal.

Meanwhile the IMF is said to be pushing for the d-word. Default., it's privately advising Greece to restructure its debts, paying only a percentage of what its lenders owe. Greece's debts are now pushing 150% of GDP. Portugal's are projected to be 97% this year.

Will the moment of truth for EU strategy on sovereign debt happen before lambing season is over? Not sure.

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