Eurozone Bailouts with Polish Foreign Minister Calling for Bigger Role by Germany; European Weather Outlook
QUEST: Tonight, Europe's finance ministers are working on plans to bolster the bailout fund. Echo (ph) Finn (ph) from the Eurozone's 17 member nations are in Brussels, looking at ways to leverage up the bailout EFSF stability facility. The idea - to prevent more countries from being sucked into a debt crisis spiral. In the last few moments, they have agreed to have Greece have its next installment of bailout cash. The Dutch Finance Minister, Jan Keest De Jager, says the IMF may have to chip in to stop the fund falling short. Also on the agenda is the introduction of common Euro stability bonds. There was a very sharp and brisk warning from Poland's foreign minister, who said it's time to call on Germany to do more. Radek Sikorski says no one else can save the Eurozone - Berlin must step forward. His exact words were, "I will probably be the first Polish foreign minister in history to say so, but here it is - I fear German power less than I'm beginning to fear German inactivity". The minister joins me now from Warsaw. Minister, when you said that statement - you fear inactivity more than German power - you obviously knew that was going to catch attention. And basically, you wanted them to realize the seriousness of this situation.</s>RADEK SIKORSKI, FOREIGN MINISTER, POLAND: Absolutely. And I said it in Berlin in the presence of two former presidents of Germany and the foreign minister of Germany. I believe that we are still the largest economy, but the Eurozone needs attention and Germany, the largest economy of the Eurozone - which has benefitted the most from the current arrangements and is not actually an innocent victim, because Germany also broke the stability pact. So, there is an onus on Germany to take action and that's what my speech in Berlin yesterday was about. Poland has the presidency of the European Union, but we are not actually in the Eurozone.</s>QUEST: So when you hear Minister Schobel and Chancellor Merkel saying that they're not in favor of stability bonds, they do not believe the ECB should be the lender of last resort, and they do believe that treaties should be reopened - what is your reaction?</s>SIKORSKI: We have a short-term problem and an important medium-term problem to fix. Short-term, we need to save the Eurozone by whatever technical means. Medium-term, we also have to change the treaties to make Europe more governable and thereby restore credibility. Because this crisis is not only about debt. It's really about credibility - whether Europe can work in the long run.</s>QUEST: Right. Since, well, you put that firmly on the table, the fact is, Europe doesn't have any credibility. That's the long and short of it when it comes to handling this crisis. 18 months on, Mr. Minister, and it's getting worse, not better.</s>SIKORSKI: Well, steady on. We are still the largest economy. As Europe, we have some first-class companies. We are still one of the richest areas on earth and, in many respects, the envy of the world. But we do need to put the finances of some member states in order. And we are now discussing ways of doing it. So that next time, sanctions, for example, for breaking the debt ceiling or the deficit ceiling are automatic and cannot be broken by political will.</s>QUEST: You say that, though, but if you take, for example, yesterday's meeting with President Barroso, Van Rompuy, and President Obama. The U.S. President was quite blunt - you'd say it helped, but he did warn that Europe is playing with fire. So, I'm wondering, how close do you think we are to a crisis situation from which it will be very difficult to recover?</s>SIKORSKI: Well, I think we could say the same to the United States. I think you just had a little mishap with the commission that didn't come to an agreement on your budget cuts. So I think we have, both in Europe and the United States, a crisis to do with deleveraging our economies from the crazy heights caused by government overspending and by irresponsible financial engineering. And we need to make our political systems work to fix it.</s>QUEST: I know you don't believe in the apocalyptic rhetoric that some have put out, but do you believe that time is so short, now, that if they don't do something - or you don't do something - then, really, we are looking at a calamity?</s>SIKORSKI: We'd better not risk it. And it's better to act because what we propose are sensible rules. For example, here in Poland, we've had a constitutional limit on indebtedness. It has to be below 60 percent since 14 years ago. And so, these are the kinds of things we want to introduce because they make sense in their own right.</s>QUEST: Finally, do you believe that Europeans - ordinary Europeans in the union, citizens of the E.U. - have a right to better governance and decision making than we've seen so far during this crisis?</s>SIKORSKI: Yes, I think we need to give European institutions more capacity to act. While, at the same time, making sure that our democracy survives - that the rights of the member states are protected and also that there is democratic parliamentary supervision over a streamlined and more capable European commission.</s>QUEST: And isn't that trying to square the circle? Every time you try and do that, sir, some country comes out and says, "No".</s>SIKORSKI: Well, you had those discussions at the beginning of your republic. Alexander Hamilton fixed the issue of debts incurred by your states during the war of independence by a deal whereby solvent Virginia agreed to take part in the mutual guarantee of debt. Massachusetts was less solvent. And that's why your capital is on the Potomac.</s>QUEST: Mr. Minister, thank you very much for joining us from Warsaw tonight. We'll continue our look at the situation in Europe. This time for a non-Eurozone member. The U.K. Finance Minister, George Osborne, has warned the crisis in the zone is damaging Britain's economy. In his autumn statement to Parliament, he halved the growth the U.K. forecast for this year and next and said austerity targets set out in March won't be met. Critics are calling it an admission of failure. CNN's Jim Boulden has more.</s>JIM BOULDEN, CORRESPONDENT, CNN (voiceover): Despite a summer of discontent with students protesting over a rise in tuition fees, plus London riots, which included a large amount of looting, and looming public sector strikes, the British government said Tuesday, "Steady as she goes".</s>UNIDENTIFIED MALE: The autumn statement, Mr. Chancellor of the Exchequer.</s>BOULDEN (voiceover): Finance Minister, George Osborne, like finance ministers around Europe is trying to find ways to stimulate the economy without abandoning the vow to slow spending and hack away at the huge budget deficits. But how to do all of that without plunging the economy back into recession? On Tuesday, the mood darkened. Britain's growth will be less than one percent this year, nearly half what was predicted earlier in the year. And it could get worse.</s>GEORGE OSBORNE, UNITED KINGDOM FINANCE MINISTER: But if the rest of Europe heads into recession, it may prove hard to avoid one here in the</s>U.K. BOULDEN (voiceover): Still, Osborne confirmed leaked plans to boost infrastructure projects like 35 new road and rail investments. Plus money for small businesses and home building. Critics have said all along that the government should worry less about what markets think, and more about creating jobs, not cutting them. The opposition demands a plan</s>B.  ED BALLS, SHADOW FINANCE MINISTER: With prices rising, with unemployment soaring, families, pensioners, and businesses already know it's hurting. And with billions pounds more borrowing to pay for rising unemployment - today we find out the truth - it's just not working.</s>BOULDEN (voiceover): With other governments watching carefully, Britain vows to eventually cut borrowing costs, in part through unpopular public sector pension reform and job cuts. Plus raising the national sales tax. Though even that has not been enough to meet its original targets.</s>VICKY PRYCE, SENIOR MANAGING DIRECTOR, FTI CONSULTING: There's no way in which the deficit reduction targets are going to be met during the period that the government has set itself. So, we have to face inevitability, but actually, they're going to be borrowing more.</s>BOULDEN (voiceover): The government says borrowing will fall, just a little later than hoped.</s>OSBORNE: We are the only major Western country which has had its credit rating improve. Italy's interest rates are now 7.2 percent, and what are ours? They are less than two and a half percent. Yesterday, we were even borrowing money more cheaply than Germany.</s>BOULDEN (voiceover): So a longer period of austerity is now on the cards, which could mean even more discontent. Britain already faces the biggest public sector strike in decades on Wednesday. Jim Boulden, CNN, London.</s>QUEST: When we come back, James Murdoch has survived a big shareholder vote. The BSkyB chairman has lost key support. A report after the break.