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(generated from captions) This Program Is

Captioned Live. Tonight, the

Euro deal. Greek Euro deal. Greek debt

write-offs and a giant rescue

fund. Europe needed to deliver

a comprehensive response to the

sovereign debt crisis and I

believe that now we have a very

solid way forward. What we

have at the end of the day is a

comprehensive plan which

includes all the

ingredient. But Euro sceptics

are still waiting for crucial


Good evening. Welcome to

Lateline. I'm Tony Jones.

Despite positive spruiking by

European leaders, serious

questions remain about Europe's

new deal on the debt crisis.

How many banks and investors

have signed up to the voluntary

write-off of 50% of Greek debt?

How are European banks expected

to raise the money to re

capitalise and will Government

have to bail them out and they

can't and will the fun be

enough to efor vent Italy and

Spain going into melt-down?

Greek economist Yanis

Varoufakis says there is no

agreement to speak of and says

the Eurozone is still headed

for disintegration. First, why

seek the solution? The Malaysian Prime Minister takes

a swap at Tony Abbott's

Opposition to the asylum-seeker swap. Falling on their swords,

two advisers to the Victorian

Police Minister resign

following a report that found

they plotted to bring down the

Police Commissioner. And the

Bolshoi is back. The home of

some of the world's greatest

ballet and opera will reopen

its doors in a few days after a

long and controversial

financial markets have breathed restoration project. World

a sigh of relief following the

announcement of a deal on the

European debt crisis. For a

while, the emergency summit in

Brussels looked like it was

going to collapse but European

leaders bargain long into the

night and clinched an

agreement. It's not as

ambitious as some had wanted

but European leaders hope it

will be enough to stop the

crisis spreading to larger

Eurozone economies such as

Italy. The Greek Prime Minister

said his country could now

start a new chapter but on the

streets of Athens many remained

skeptical. Europe correspondent

Philip Williams reports. The

deal was done now the people

could have their say but in the

streets of Athens the agreement

to slash Greek debt was not

welcomed. I don't think it was

a good deal but it was

inevitable. At this moment,

Greece has gone bankrupt. It's

a murky deal. Everything here

gets worse by the day. God help

us. But it was the market

reaction that Eurozone leaders

cared about and to the relief

of everyone, they liked it.

First in Asia then in Europe.

Markets quickly rallied

strongly, a palpable sense of

relief, it may not be business

as usual but this was not the

day of disaster many had

feared. We have definitely hope, definitely, but the

problem is we have to focus

more on economic reforms even

in Italy because Italy is still the main patient of the

Eurozone right now. But as the

17 Eurozone leaders gathered in

Brussels, they all knew the

dangers. The world hoped,

expected, big things of them

but in the days and weeks

preceding this, the definitive

summit, cohesion and common

purpose were scarce commodities. Angela Merkelal

warned of the greatest crisis

since the Second World War,

Silvio Berlusconi's political

life was on the line and the

Greeks could tell everyone the

cost of failure. There were

tense hours ahead. Imagine his

relief when his fellow Eurozone

leaders finally agreed his

country's debt would be

slashed, the banks would accept

the so-called haircut, a 50%

write-off of Greek debt. We've

managed to escape from this

trap. The fact that we are

still here today is an

achievement. Today we can close

a chapter on the past and start

work on a new future for our

country. Also relieved, Silvio

Berlusconi. He had to offer a

new austerity and reform

package because of his country's burgeoning debt. In

return, Italy gets the benefit

of the newly leveraged 1

trillion Euro bail-out fund

which can be deployed to stop

contagion. The guarantee is

that if we don't honour our

commitments we'll lose

credibility. These are

commitments and Italy will

honour them like it always

has. And from another embattled

economy, Ireland, recognition

the much criticised Eurozone had finally got its act

together.. It's recognition

that at long last European

leaders focus sed on the

fundamental questions and made

decisions in a decisive manner

about them and I hope this

brings about a realty improved

reaction from all the markets

and allows Europe to focus on growth and job creation and

getting people back to work.

But perhaps the greatest

satisfaction lay with the

German chancellor Angela

Merkel. This was largely Merkel. This was largely her plan demanding more

accountability of her

neighbours at less cost to

increasingly impatient

taxpayers. I believe we've

lived up to expectations and

done the right thing for the

Eurozone. This brings us one

step further along the road to

a good and sensible solution.

I've always said we won't be

able to resolve this over night

but this will now bring stability. The size and

structure of the bail-out fund

was perhaps the most

anticipated element of the

deal. Talk it stretched to 3

trillion Euro, in the end it's

1 trillion, at the bottom ochB

hopes, but it appears so far

enough. The firewall is a

strong firewall with up to

thousand billion Euro, 1400

billion US dollar and we have

strong decisions in terms of

economic governance. It's the

stricter oversight that gives respective Governments more

confidence in each other. The

new rules should avoid the

Greek situation where debt

figures were simply fabricated

but in the end all of this is

about confidence. I think

again they have to be fully

implemented as you say, as

rapidly and effectively as

possible and I have only to say

that what counts is the level

of confidence. What I hur in

this European council was the

expression of had the will of

the heads and that is in my

opinion extremely

important. There are many

details to be decide. Some of

the billions may come from

China. Already there are

discussions. And other emerging

economies may also want to park

some of their national pot here

in Europe. So far so good but

this isn't the end of the

crisis. You may remember back

in July there was another

summit and similar predictions

the crisis was over. It wasn't.

What this does do is buy

valuable time. CHOGM's official

opening is just hours away but

already local politics is threatening to overwhelm the

Prime Minister's turn on the international stage. Tony

Abbott's gate-crashed the

meeting in Perth, lining up his

own bilateral meetings while

Western Australian Premier

warned about the Federal

Government's mining tax. Tom

Iggulden reports from Perth.

The stage is set... Gee, it's

big. 2000 seats.

Amazing. ..and the political

volume's been turned up on

CHOGM eve. Check one. Julia

Gillard met with the Malaysian

Prime Minister. Think we probably need to do that

again. The co-architect of her

failed people swap deal. It is

not a Malaysian solution. It is

an Australia-Malaysia

Solution. And he took a veiled

swipe at Tony Abbott's

criticism of his country's

treatment of asylum seekers.

Refugees and ek slooers are

treated well in Malaysiach that

is a fact and recognised by the

UN. Would you be happy if Mr

Abbott challenge changed his

mind, would you urge him to

change his mind and pass the legislation? I would be hyp

for (All) Australia to support

the arrangement. We in

Australia have different

standards and our standards are

the ones which we are required

to observe in our dealings with people. Tony Abbott's gate-crashed the Prime

Minister's international

leadership party by coming to

the host silty himself. It's

good to be here in Perth in the

week of CHOGM. Today I've got a

number of bilateral meetings.

One was with the Indian delegation. If the Government

was serious about reducing

global emissions, they would

lift the ban on selling uranium

to India. The phone Minister

says that's a matter for the

Labor Party and not CHOGM.

Personal view on uranium

exports? I'm looking forward

very much to the Australian

Labor Party national

conference. Mr Ferguson? I'm

looking forward to the debate

too. Mr Abbott's using the

pokies issue to steal attention from the Prime Minister's tilt

at international diplomacy.

Opposition 's growing against

the Government's plans for

mandatory precommitment. Casino

boss James Packer says the move

will hurt recreational gamblers

as well as addicts. Tony Abbott

says Kevin Rudd's got his

doubts too. He pointedly

declined to support the Prime

Minister's policy obviously

he's using this issue as a

wedge in his campaign to re

take the Labor leadership. Mr

Rudd says he's been busy

concentrating on talks

protecting the global

democracy. Here we have Tony

Abbott, the alternative Prime

Minister of Australia, engaging

in this sort of discussion this

week.? Griv us a break. I'm not

going to buy into it. We have

other priorities this weekch

As leaders, we will be

discussing and debating issues

in order to project a united

voice on some of the most

pressing global challenges like

food security, climate change,

the global economy and

sustainable development. But

Tony Abbott's not the only

Liberal trying to hijack the

Prime Minister's moment in the

global spotlight. Last night,

Western Australian Premier

Colin Barnett told a CHOGM

business forum that the mining

tax poseded increased sovereign

risk for foreign

investors.. It's a stupid,

stupid, ill conceived, inept

proposal. Everyone knows that.

I was only stating what

everyone knew. Was that inappropriate use of this

forum? I think that's

bordering perilously close to a

domestic question, as is well

known Premier Barnett and I

have a different view about the

appropriate taxation

arrangements for minerals. But

the Premier is

unapologetic. I'm not at a

namby-pamby conference, we want

a conference with a bit of

oomph to it. That what people

came for. I thought Colin

Barnett was very restrained and

statesman like. There were lot

of other policies he could have

criticised, had he chosen to.

With a chance to rain on Julia

Gillard's political parade, the

Coalition will aim to keep it

as interesting as possible.

Victoria's Police Minister,

Peter Ryan, is undered intense

pressure after two of his

closest advisers were forced to

resign because of the damning

report by the police watchdog. The Office of Police Integrity

found Ministerial adviser

assisted by Bill Tilley plot to

bring down then commissioner

Simon Overland. It's a tangled web of manipulation and

influence involved Government,

police and the media in

Victoria and the Police Minister's office was right at

the heart of it. I accept

responsibility for the fact of

having employed Tristan Weston

in my office. I had no idea he

was undertaking the course of

conduct revealed by this

report. The OPI says Peter

Ryan's Ministerial adviser,

Tristan Weston, a former police

officer and Liberal candidate,

waged an energetic campaign to

bring down the former Chief

Commissioner, Simon Overland,

through damaging media leaks

and a totally inappropriate

relationship with Mr Overland's

former deputy and rival, Sir

Ken Jones. He went out on a

folly of his own to do what he

did. This has all the hallmarks

of Walter Mitty. After Sir

Ken's resignation from the

police force in May, Mr Weston

sought to have it withdrawn.

With the assistance of his

friend, parliamentary secretary

for police Bill Tilley, and the

head of the Police Association,

Greg Davies. There are no

specific findings against Mr

Davies but the OPI says the association crossed boundaries in its involvement in the

police leadership crisis. It's

not surprising they've tried to

smear us and me personally but

of course there's nothing there

and no indications of any

wrongdoing. Mr Weston is

accused of six counts of

misconduct, criminal charges

are now being considered.

Given the OPI report, he is

resigning as an employee of the

Government. Mr Weston denies

any wrongdoing and says he'll

vigorously defend any legal

action, describing the OPI

investigation as biased, highly

suggestive and legally flawed.

Bill Tilley has also resigned as parliamentary secretary and

will move to the Government

back bench. Sir Ken has broken

his silence on the affair with

a statement arguing his contact

with Mr Weston has been

seriously misconstrued. The OPI

found no evidence that Peter

Ryan condoned Mr Weston's

actions and the Minister

maintains he knew nothing of

them. I ask how stupid does the Deputy Premier think Victorians are? Less than a

year into the job he's lost a

Chief Commissioner, a deputy commissioner and now

parliamentary secretary and a

Ministerial adviser.Last week,

six people were killed in the

Indonesian province of West

Papua after separatists declared independence from

Indonesia at a people's

Congress. Lateline has obtained

exclusive pictures of the

aftermath of the shootings

which are alleged to have been

carried out by Indonesian

security forces including

anti-terrorist troops trained

by Australia. Indonesia says

the declaration in the restive

province is an act of treason

and people have been charged

according to the law. West

Papuan independence activists

say the shootings were planned.

Australia's Department of Foreign Affairs says the

Indonesian police response was

disproportionate. Thousands

attended the third west pap wn

people's Congress on 19 October

in Jayapura. It was organised

by the West Papuan independence

movement. Last week the

Congress took the dramatic step

of declaring independence from

Jakarta and electing its own

Government. We will appoint a

main leader who will unite the movement andide yomings. This

is the time to make clear to

God, to the international community, also to Indonesia

and the people of Papua. After

the declaration was made,

security forces moved in to

break up the meeting. The

Indonesian Government says

police fired warning shots to

disperse the crowd and made many arrests. Six people have

been charged with treason. But

six people are also reported to

have been killed and many more

injured. Those who witnessed

the violence want the

international community to

intervene in West Papua. I call on the churches around the

world to care about this. I'm calling for an intervention for

us because today's events

showed we need a transitional

Government and this needs to

happen to help the people of

Papua. We're now in a dangerous

situation and we're calling for

a UN inter vention to help

us. John Baransano is a

Protestant Minister in Jayapura

who was at the people's

Congress. He says he saw people

being shot and beaten and

others herded into trucks. I

saw with my own eyes people who were bleeding. They had been

hit. We saw how they were

terribly harassed. They were

forced into a truck and ordered

to sit down so they wouldn't be

seen by others but if we were

up higher we could see what had

been done to them. Anglican

Minister Peter Woods liveded in

Indonesia for many years and is

dedicated to helping West

Papuans achieve independence.

He was in Jayapura during the

Congress and filmed interviews

with many of the independence

movement's leaders. He says the

security forces waited until

independence was declared at

the meeting. The army, the

special police, the Densus88

which had been along the road

for the last three days in various barracks and

positioning areas, they all

moved in and started firing.

The Indonesian Government says

there were deaths but not at

the site of the Congress and

the victim's wounds were not

gunshot wounds but from a sharp

weapon. This vision has been

supplied by West Papuan

independence activists and

can't be independently

verifieded. It appears to show

many bulletholes. Reverend

Woods believes the violence on

the 19 lth was premeditated.

It was very well planned and

they waited until the

declaration had been made. The

justification for that was that

- we've heard variously, a coup

d'etat was being plan ored a

State within the State of

Indonesia was being declared.

Among the troops were soldiers

from the dense s 88 unit,

Indonesia's elite

anti-terrorist squad which is

funded and trained by Australia

and the United States. The

Australian Government says it

funds training for the

Indonesian armed forces that

emphasises human rights awareness, accountability and

respect for the rule of law

including in Papua and that it

doesn't train Indonesia's

military to counter separatist

groups. The Greens want

military training halted. The

Australian Government should

immediately suspend all support

for the Indonesian military. It

should, as a matter of urgency,

send a fact-finding mission to

the region. Elite police from

Jakarta and Indonesia's

national commission for human

rights are investigating the shootings but there are claims

some of the injured in the

crackdown are too afraid to

seek treatment, fearing arrest.

One of those is Abraham Kereni

who was a representative at the

Congress. Then those the

security forces, they immediately held pistols and

opened the door of the car of

the Prime Minister. It was

there that shots were fired.

They opened the door and pulled

me out. As they were pulling me

out there were three crew that

came and hit me. A spokesman

for Australia's Department of Foreign Affairs says it appears from reports that the police

response following calls for

independence at the conclusion

of the Congress was


European leaders have finally

agreed on a deal to try to ease

Europe's financial crisis but

is it, as the French President

Nicolas Sarkozy described it, a

credible and ambitious

response? For his analysis,

I'm joined live from Athens by

Yanis Varoufakis, professor of

economics at Athens university.

Thanks for being there. As

expected, we've heard positive

spin from European leaders but

your immediate response is that

there has been no agreement to

speak of. Why did you come to

that conclusion? Well, because

I read very carefully every

word that the communique

included and I didn't see anything other than a

definition of the areas which

the European Union considers to

be important. When it comes to

their proclamations of what

they're going to do about these

areas, about these problems

that are threatening the Euro

system with imminent collapse,

I saw nothing there which

contained detail and of course

we know that it is in the

detail that the devil resides.

The numbers that I saw were

flimsy. They were not founded

on anything that resembles the

reality of the ground in the

social economy of the Eurozone,

of Greece, Germany, of any of

the countries, or the banks for

that matter. What I think has

happen is this - our leaders

now have committed - back a

week ago when they met in the

G20 to come up with a

comprehensive solution to the

crisis they were locked in

rooms and chambers for days on

end and around 4 in the morning

they hadn't reached any serious

agreement so they decided to

give George Orwell his latest

triumph by describing their

failure to agree, their impasse

as a success instead of as a

triumph of convergence and

they're hoping, I think, that

in the next few weeks, probably

months, something of a rational

plan will emerge magically out

of that mess that they have

found themselves in

overnight. Your obviously a

skeptical approach. Let's start

with the banks which are

expected to take this so-called

haircut. How many of the banks

and investors have actually

agreed or signed up to this

voluntary write-off of 50% of

Greek debt? We do not know

that yet. What we do know is

their representative, their

shop steward if you want, was

leaned upon by Mrs Merkel and

the other European leaders to

agree. He has agreed simply

because he had a gun on his

head. The gun took the form of

a very clear ultimatum that

unless he agrees then there

will be 100% haircut. Now, what

this means, when we come to the nitty-gritty negotiations on how this haircut will be

actually implemented and which

banks are going to participate

and how they are going to be

convinced by their own shop

steward to go along with this

agreement that was snatched

last night out of the jaws of

complete failure, is something

we are going to have to

watch. Greek banks are

certainly going to have to take

big losses. How is that not

going to tip them over into

insolvency and are we going to

see a round of nationalisation

of Greek banks as a result?

Greek banks have been insolvent

for some time and so have a number of Eurozone banks. The

only thing that keeps them

alive and the ATMs still churn

Euros out is the European Central Bank system which is

providing them with the

liquidity necessary to keep

functioning so, yes, this

agreement is paving the ground

for an effective Europeanisation not

nationalisation, the transfer

of a controlling chunk of their

shares to the Eurozone until

they are cleansed and resolved

into the private sector. But

the problem is much more

general than that. If you read

the agreement very carefully

you will see that the way that

our European leaders are

putting it is that the banks

will be given first an

opportunity to go to the

private sector to seek more capital. If that fails then

they will go to their national

Governments to get assistance

from them and failing that then

they will go to the European

financial stability facility to

be re capitalised. The bankers

are going to utilise that long

process in order to avert the

loss of control of their banks

which means the

recapitalisation of the European banks which is essential and should have

happened yesterday is going to

drag on and on. This creates

serious systemic risks within

the Eurozone's banking sector

and I'm afraid this is possibly

one of the worst outcomes of

this negotiation. Let's go then

to the fun which, as you say,

is the last resort, the

stability fund which is now

being talked about as being a

trillion-Euro stability fund

but of course it isn't. What it

is a fund which can potentially

be leveraged up to that amount.

How does that work exactly,

that leveraging system? We've

seen it all before, haven't we?

It's not Wall Street used to be

doing prior to 2008 so for

every dollar or Euro that the

European financial facility has

received from member states,

it's going to seek to expand it

by borrowing from the private

sector. The problem is,

however, that whereas the

private banks in the pre-2008 era, in Wall Street for

instance, were doing that

knowing that there is a

back-stop behind them if it all

goes belly up, the Central

Bank, the Federal Reserve in

the United States, the rumour

here is the FFS is going to be

charged through leverage but

there will be no-one behind it

and let not forget the major

haircut being touted for Greek

debt is now being followed by a

very aggressive campaign by the

European leaders to insist that

they should not go down as a

credit event, in other words

the city is not going to be

triggered which means no-one is

going to have any confidence

now in the checks and balances

within the financial system

that are there in order to

provide a back-stop in case

something goes wrong. So we are

turbo charging what I consider

to be a toxic financial

stability fund and we do not

provide a safety net in case it

all goes wrong. It is as if the

European Union is deciding to

go down the road of Lehman

Brothers without a Federal

Reserve system to back it

up. The irony of this of course

is that one of the instruments

they're talking about is using

this stability fund to create

insurance for investors to buy

European bonds. If the - first

of all, how much does that

insurance cost? Is the

insurance really based upon

anything or is it simply bast

on this leveraged system that

doesn't really exist? In other

words, as you say, a Wall

Street scenario? Absolutely.

This is what happens when

desperate people are concoct

ing desperate solutions. The

initial idea proposed by Tim

Geithner, the US secretary, to

the Europeans is it was leveraged by the European

Central Bank. The Germans

didn't like that so they sought

private fund in order to

leverage the FSF and instead of

having the FSF actually lend to

Italy and Spain, what they are

coming up with is this idea, in

order to avert having to say to

their electorate that the is

going to be a kind of fiscal

transfer to the countries that

are indebted like Italy and

Spain, that we're not going to

give them money, what we're

going to do is insure their

debt which creates more

problems than it solves because

it raises the question of what

happens with the old debt which

is un insured? Who is going to

buy that? You can imagine what

will happen to the yields of

the old bonds. There's 3

trillion worth of bonds sitting

around the financial markets.

Let's be clear on this - it is

a mess and a mess of our

politicians' making and the

more they're trying to

wriggleal their way out of this

mess the more mess they are

creating. Do you think the

markets are going to come to

the same conclusion as you

inevitably? Because there

doesn't seem to be a great deal

here, as you've just pointed

out, to help Italy and Spain

out of the impending crises

they're both facing. The only

good thing one can say about

our politicians is that they've

created such low expectation in

the markets over the last weeks

and months that it's very hard

to surprise negatively the

markets now so even if the news

is bad as opposed to atrocious,

the markets are going to

receive a little bit of a boost

today but I think that once investors pore over the details

of what's happening they will

realise nothing much has

happened so it would be back to happened so it would be back to

business as usual as of the

next two or three days. Final question because there is

another arm to this giant fund

and that is a special

investment vehicle as it's

called for public and private

investors and there seems to be

a wish, if not a dream, that

the Chinese will rush into the

void here and create a huge sum

of money that will help pull

Europe out of its crisis is.

That going to happen? Is there

any sign it could happen? I

have No Doubt that the Chinese

leadership would be willing to

participate in Europe if what

they are being presented is a

national plan which has a

serious chance of dealing with

this crisis because China has

many interests in the European

Union. It's a major trading

partner. It has lot of

investments in Europe

especially in public debt, and

I'm sure the Chinese would like

to help but the problem is that

the plan they are being presented with by the Europeans, by President

Sarkozy, by the head of the

EFSF and so on, is such a

shoddy plan that the best

intentions of Beijing are going

to come to naught. Yanis

Varoufakis, pretty pessimistic

view. Probably the first we've

hur actually to be quite as

pessimistic since the deal was

struck but it is a bit of a

reality check for us to hear

from you. We thank you very much. Thank you.

It's famous as the home of

some of the world's greatest

ballet and opera and tomorrow

Moscow's Bolshoi theatre will

reopen its doors after a long and controversial restoration

project. It dragged on for six

years and was embroiled in

allegations of embezzlement and

fraud. There's nothing new

about furore at the Bolshoi as

our Moscow correspondent Norman

hur mont reports. It's not

quite ready for its close-up

yet but Russia's renowned jewel

of the arts is poised to

reclaim its former glory. There

are still workers clambering

all over Moscow's legendary

Bolshoi theatre even as

rehearsalsal for the opening

performance go on. Nearly two

centuries of magnificence has

been restored by a project

years overdue and hundreds of

millions of dollars over budget.

TRANSLATION: 3,500 people were

working here, another 2000 were

in the restoration workshops.

For most of them, it was the

project of a lifetime. It

certainly seems that there's

been no expense spared. The

opulence of Czarist Russia is

back and the project manager is

keen to point out all sorts of

new technical innovations - a

stage that can be raised or

lowered in newly built levels

underground. It another world

from Soviet times when the

Bolshoi was used by the

Communist Party for speeches

and the building's foundations

slowly crumbled from neglect.

After six years, the

scaffolding is gone gut butt

the allegations of embezzlement

and fraud surrounding this

project remain. So far, the

price tag has hit more than

dollar $730 million with the

final bill still unknown.

Nobody knows at the moment and

I think that the legacy and the

scanles will linger many years

afterwards, like it was in

Milan with the La Scala

reconstruction for example. If

the painfully slow and hugely

expensive restoration of the

Bolshoi is a scandal, well, the ballet theatre that bears its

name is almost as famous for

those as it is for its

performances and this year has

been no exception. The Bolshoi

once again made headlines for

the wrong reasons. One of its

renowned soloists, Gennady

Yanin, was forced to quit after

erotic photos of him and

another man appeared on the

Internet. After Mr Yanin, who

had become the ballet'

director, steppeded down, the

pictures disappeared from the

net without a trace. Long-time

Bolshoi watchers say it's just

the latest in a long line of controversies.

TRANSLATION: This scandal did

affect the troupe but it will

soon be forgotten. I would like

to stress he was not accused of

being gay. He was not accused

of anything. The of anything. The scandal was

just that his personal photos were placed on the Internet. The Bolshoi never

seems far from scandal. Take

celebrity ballerina Anastasia

Volochkova for example. Ditched

from the troupe for reportedly

being too heavy, she rebounded

as a member of the Vladamir

Putin's backed United Russia

party but that link ended after

a beach photo shoot sparked object objections.

object objections. She re mains

one of Russia's best-known

dancers, much to the dismay of

serious art critics. Madame

volvoldecided she is the best,

the most outstanding ballerina

in Russia and probably the

whole world, and she started

behaving like that, not just in

the theatre but outside it

too. Despite the scandals the

Bolshoi carries on. In the end,

responsibility for the

restoration was transferred

directly to the office of the

President. It's not clear what

that may mean for any potential

criminal charges or attempts to

recover money that may have

been embezzled from the project

but it does mean it is now

finally finished. A quick look at the weather:

That all from us. If you'd

like to look back at tonight's

interview with Yanis Varoufakis or review any Lateline stories

or transcripts you can visit

our website and follow us on

Twitter and Facebook. Ali Moore

will be here tomorrow night.

I'll see you next week. Until then, goodnight. Closed Captions by CSI

This Program Is Captioned

Live. Good evening and welcome

to Lateline Business. I'm Ticky

Fullerton. Tonight, back from

the brink. Europe's leaders come

come up with a plan, the

devil's in the detail and guess

what, that's where it's

lacking. We're live to London

to discuss. Also on the

program, James Packer joins the

fight against poky reform,

claiming Crown's at the

vanguard of tackling problem

gambling. What they have shown

is that they are fabulously

rich, they are prepared to

thrash around and to lie and

they will do anything, say

anything to protect their profits. And businesses are

told if you want to get ahead,

get an app. I think the mobile

phone app industry is huge at

the moment and I think it's

only going to get bigger. To

the markets where that European

plan has gone down rather well

so far. The All Ordinaries went

off like a rocket after an

embarrassal 4-hour shut-down,

the ASX 200 jumping 2.5%, the Nikkei was up

Nikkei was up strongly, so too

Hong Kong's hang seng. James

Packer used Crown's annual general meeting today as an

opportunity to voice his concerns about the Government's

poker machine reforms mee. Told

shareholders it will have a

major impact on casino revenues

and won't help problem gamblers

as Emily Stewart reports. James

Packer is used to holding all

the cards and it was with a

poker face that he ignored

questions with on his way into

Crown's annual general

meeting. I found it was a

very, "You will do as I say,"

type of meeting. Although it

didn't all go James Packer's

way. 55% of shareholers voted

against the executive pay

report. Whilst some good

changes have been made to the

report, most of the incentives

are paid in cash. There is no

deferral of those either

short-term or long-term. We

would much prefer to see some

deferral with equity

involved. If the remuneration

report is voted down again, the

board could be forced to spill

but James Packer has vowed to

use his shareholding to

immediately reinstatement the

bord board. If James Packer's

got 46% of the shares, not much is going to happen that is going to happen that he

doesn't like. Cameras weren't

allowed into the meeting but

James Packer told shareholders

that mandatory precommitment

for gaming machines roar

introducing a $1 maximum bet

will hurt recreational players

and that will cost jobs and

investment across the industry

and cost the State Government

tax revenue. Crown also defend

its record for helping problem

gamblers and hit out at had

Government. But you don't have public policy without having

the vaguest idea whether it

would work. Why would you, as a

Government, be pru proposing a

policy if you haven't tested

it? I think the pokerer

machine industry has misjudged

their campaign. What they have

shown is they are fabulously

rich, they are prepared to

thrash around and lie and they

will say and do anything to

protect their profits. protect their profits. Crown

shareholders though seemed to

support Mr Packer's stance.

The Government meddling in the industry has been only

disastrous. I'd like to see

some reform done but not to the

point of what Mr Wilkie is stating. XrOun's casinos in

Melbourne and Perth are feeling

the effects of lower consumer centum

centum as well as stiff

competition from two new resort

style casinos in Singapore

however Crown has still seen an

increase in revenue of 3.5% in

the first quarter of the

financial year. To Europe and

after marathon talks, Europe's

leaders have come up with a

framework to deal with the debt

crisis. Much has yet to be

worked out but the headlines have encouraged recapitalisation of the banks

to the tune of 100 billion

Euros , a 50% haircut for Greek

bondholders and leveraging the existing rescue fund to a

trillion Euros. I'm joined now

from the London stock exchange

studios from Jamie Dannhauser from Lombard Street Research.

Welcome. All the leaders seem

very pleased with themselves,

that they have delivered. Is it

enough? I'm sure they're

pleased with themselves. The

devil will be in the detail. We

have a lot of promises on the

table, frankly they were the

same promises that were leaked

over the weekends so there

really hasn't been that much

new information in the last few

days but frankly we need to

know what is in the detail, in

fact how will the leveraging up

take place? What will the

issue be now to respond? What

will happen to monetary policy

in the Eurozone? There are a lot

lot of unanswered questions.

Is there, in your view, going

to be enough help to sort out

both the Greek banking system,

making sure that stays afloat,

and indeed the financial

position of the Greek

Government? I think what's

fairly remarkable about the

haircut that's been agreed, the

50 % cut in the face value of

Greek bonds, is the numbers

being bandied around this

morning suggest that only

brings the Government debt brings the Government debt

ratio down to 120% of GDP in

2020 so even with this very

large upfront haircut, it's

still clearly the case that the

Greek Government is bust. There

is no sense this deal is really

dealing with the fundamental

problems of insolvency in the

Greek Government. That problem

really hasn't been addressed at

all. When it comes to the Greek

banks, there are going to be recapitalisation funds recapitalisation funds put on

the table. That's got to happen

as part of the plan. As far as

I'm concerned we still are not

dealing with the funmental

problem with Greece and that is

its bust. I have seen a few

numbers out this morning from

the BBC on what banks need to

raise and how they might be

rushing to the bail-out fund

for help. Greece 30 billion

Euros, Spain 26 billion, Italy

15 billion. That's lot of

money. It is. The aggregate money. It is. The aggregate

number's in the region of 100

billion Euros. These are

estimates. At this stage they

are very large numbers. The sad

fact is this could have all

happened 18 months ago had

European leaders been willing

to accept the reality of the

situation they faced. The

simple fact is they've done

very little for 18 months and

that means we've lost 18 months

of time to put in place proper reforms. 50% reforms. 50% haircut on this

Greek debt does mean some debt

is going to be written off but

are you worried we're going to

get a sort of round robin of

debt with debt getting shuffles

from bank to Government, from

Government to Government, from

Government to European fund,

from yean fund back to

Government? Absolutely. This

is one of the worries. Because

we have no detail exactly how

it will be leveraged up to 1

trillion, it's not clear which

credit is going to stand behind

the fund and that is the

problem. Europe has a big debt

problem not just a Government

debt problem but an even larger

private debt problem. Far too

much of the debate about the

Eurozone crisis focuses on the

Government issue when really

the problem in countries like

Portugal, in Spain and in

Ireland is one of private debt and banks that have lent too

much money to the private

much money to the private sector. You're suggesting

that Portugal might be next in

terms of market focus? Very

much so. My view has always

been that this grand plan, this

grand deal has-H had to look at

Portugal as well and probably

Ireland because the simple fact

is on the IMF's current

numbers, Portugal is going to

have a Government debt ratio in

a few years of 115% of GDP and

those in my view are based on

already optimistic growth

projections so if the debt

ratio is going to be higher

than that there has to be a

large question mark about how

long it will take for market

focus to move to Portugal where

the problem of the private

sector is many times worse than

it is in Greece. It's been

suggested President Sarkozy is

already hitting the phones to China to contribute to the

bail-out fun. Do you think that

is indeed what will happen,

we'll get more brick input

here? It's a solution and on a

global level it's quite a

desirable solution in the sense

we do still have the enormous

problem of global imbalances

and large imbalance in capital

flows so the use of China and

the brick countries is a

positive step but I would like

to see Europe getting its own

house in Ords and recognition

of the real for. Mishas been

the underlying issue of the

crisis, nobody in Europe is

willing come on the table and

lay down what has actually gone

wrong. Alright, Jamie

Dannhauser, one small step.

Thank you very much for joining

us. Thank you for having

me. The debate over coal seem

gas has taken a new turn. AGL

Energy has started buying

vineyards in the NSW Hunter

Valley to shore up its stake in the resource. While Eastern

Star Gas is facing a shareholder revolt against a

takeover deal with Santos.

Michael Troy reports. While

protesters confronted Santos

workers in the NSW Liverpool

plains, the gas xymp and its

takeover target, Eastern Star

Gas, were very popular with the

market. Both share prices

jumping 7%. Normally that would

make investors very happy but

it hasn't persuaded a

shareholder action group led by

Paul Johnson to dropputs plans

to block the Santos deal. We

have a scheme offer released

with a very shockingly low

takeover price from Santos that looked opportunistic, there

were all sorts of conspiracy

theories as to why it came

about but we certainly weren't

happy with it. The group have

sent out 6,000 letters to

shareholders and believes it

can stop the takeover. The

retail holder with five shares

has the same vote as a holder

of 8 million shares so that

gives a more level playing

ground. Eastern Star Gas is a

small company with only a few

test wells in the Pilliga

Forest in western NSW, however

t has the right to develop 500

more. It makes an awful lot of

sense for a company the size of

Eastern Star Gas to now pass

the development of what is the

sort of project that only the

majors can really prosecute. Investment manager

Hugh McNallicise he believes

the Santos deal will get

passed. The vast majority of

shareholders, including the

directors who are - a number of

whom themselves are large

shareholders - are accepting it and they've negotiated what I

think is a pretty good deal.

The rebels, however, are not

convinced. Despite the Santos

shares now trading above the

price when the original offer

was made in July. We feel it's

premature. You've got the

carbon tax being passed through

the parliament now, there is

the start of a new industry, a

gas industry. That demand looks

set to increase with AGL Energy

saying NSW faces a gas shortage

within five years and they've

been working to shore up future developments, purchasing two vineyards in the Hunter

Valley. The reality is that

it's ideally lOkted in terms of

the future development that we

have planned for the Hunter

Valley. The big gas companies

are now ramping up their PR

campanlz. I'm very confident

that the coal seam gas industry

can happily co-exist with

agriculture. Just who will see

the benefits from the Eastern

Star Gas deal will become

clearer with tomorrow' vote.

Not much of the European crisis

has rub off on Australia's big

banks if NAB's profit results, the first of the big four, are

any indication. A record net

profit after tax of $5.2

billion, 23.6% annual increase.

NAB is fourth largest bank by

capitalisation in Australia at

arp-55 billion dollars but

compare that to Germany's top

bank Deutsche, a mere $37

billion. NAB shares rose 2.1%

in the afternoon's trade and

earlier I spoke to CEO, Cameron

Clyne. Welcome. Record profits

and a lot to do with your

break-up campaign. You must

feel pretty chuff with such

clear output? It was

obviously a pretty ambitious

campaign so we're pleased to

see the results. A lot of the

growth which contributed to

that result has been in new

mortgage lending. Are you comfortable the quality of