Balls has got the Tories on the run

The energetic shadow chancellor is challenging the coalition's missteps at every turn.

The battle over the appropriateness of the coalition's economic policy has truly commenced and the amateurs are no longer dominating. A professional economist has arrived on the scene in the form of the shadow chancellor, Ed Balls, whose energetic interventions, as I suspected they would, are beginning to put coalition ministers on the back foot. Ed is highly effective and is challenging the coalition's missteps at every turn. His alternative strategy is to cut the deficit more slowly and not to compromise growth.

The shadow chancellor's Budget broadcast seemed particularly on point and contained a big apology. Balls agreed that regulation should have been tougher but: "Every government in the world got that wrong -- and I'd like to say sorry for the part that I and the last Labour government played in that." And he rightly pointed out that the Tories are not innocent, as they continually argued for even lighter regulation.

Ed had several sound bites that will surely have some resonance with the general public. "Our economy, which was working, has now ground to a halt." "By cutting too far and too fast, George Osborne isn't solving the problem -- he is in danger of making it worse." "But George Osborne is going too far and too fast and we're paying the price in lost jobs and slower growth." "So I fear that George Osborne's plan won't just hurt, it won't work." This counterattack seems to be working: at PMQs last week, an obviously rattled David Cameron snapped angrily that Balls is "the most annoying person in modern politics". Ed is obviously getting to the Prime Minister. Good. That means our shadow chancellor is doing his job.

Of particular interest are the claims made by Chancellor Osborne that the OECD is a big fan of his policies. He even referred to a letter he received from the right-wing boss of the OECD, Angel Gurria, in which he said that "while this budget contains hard measures, we are convinced that they are unavoidable in the short term to pave the way for a stronger recovery. By sticking to the fiscal consolidation plan set out last year, the United Kingdom will continue along the road towards stability."

Interestingly, today, in its interim assessment of the G7 economies, the OECD made clear that it thinks that the UK economy will grow more slowly than any other G7 economy except Japan, which has just been hit by tempest and flood. The OECD also revised their forecast for Q2 2011 from 1.3 per cemt to 1 per cent on an annualised basis. At the same time, it upgraded its forecasts for many G7 economies, predicting second-quarter growth in the US, France and Germany of 3.4 per cent, 2.8 per cent and 2.3 per cent, respectively. If the policies are so great, how come the OECD lowered their forecast for growth in the UK but raised it in all the other OECD countries that are not implementing austerity? I suspect Ed may well be picking up on this rather glaring contradiction.

David Blanchflower is economics editor of the New Statesman and professor of economics at Dartmouth College, New Hampshire

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Who is the EU's chief Brexit negotiator Michel Barnier?

The former French foreign minister has shown signs that he will play hardball in negotiations.

The European Commission’s chief Brexit negotiator today set an October 2018 deadline for the terms of Britain’s divorce from the European Union to be agreed. Michel Barnier gave his first press conference since being appointed to head up what will be tough talks between the EU and UK.

Speaking in Brussels, he warned that UK-EU relations had entered “uncharted waters”. He used the conference to effectively shorten the time period for negotiations under Article 50 of the Lisbon Treaty, the legal process to take Britain out of the EU. The article sets out a two year period for a country to leave the bloc.

But Barnier, 65, warned that the period of actual negotiations would be shorter than two years and there would be less than 18 months to agree Brexit.  If the terms were set in October 2018, there would be five months for the European Parliament, European Council and UK Parliament to approve the deal before a March 2019 Brexit.

But who is the urbane Frenchman who was handpicked by Commission President Jean-Claude Juncker to steer the talks?

A centre-right career politician, Barnier is a member of the pan-EU European People’s Party, like Juncker and German Chancellor Angela Merkel.

A committed European and architect of closer eurozone banking integration, Barnier rose to prominence after being elected aged just 27 to the French National Assembly.  He is notorious in Brussels for his repeated references to the 1992 Winter Olympics he organised in Albertville with triple Olympic ski champion Jean-Claude Killy.

He first joined the French cabinet in 1993 as minister of the environment. In 1995, Jacques Chirac made him Secretary of State for European Affairs, teeing up a long and close relationship with Brussels.

Barnier has twice served as France’s European Commissioner, under the administrations of Romano Prodi and José Manuel BarrosoMost recently he was serving as an unpaid special advisor on European Defence Policy to Juncker until the former prime minister of Luxembourg made him Brexit boss.“I wanted an experienced politician for this difficult job,” Juncker said at the time of Barnier, who has supported moves towards an EU army.

 

Barnier and the Brits

Barnier’s appointment was controversial. Under Barroso, he was Internal Market commissioner. Responsible for financial services legislation at the height of the crisis, he clashed with the City of London.

During this period he was memorably described as a man who, in a hall of mirrors, would stop and check his reflection in every one.

Although his battles with London’s bankers were often exaggerated, the choice of Barnier was described as an “act of war” by some British journalists and was greeted with undisguised glee by Brussels europhiles.

Barnier moved to calm those fears today. At the press conference, he said, “I was 20 years old, a very long time ago, when I voted for the first time and it was in the French referendum on the accession of the UK to the EU.

“That time I campaigned for a yes vote. And I still think today that I made right choice.”

But Barnier, seen by some as aloof and arrogant, also showed a mischievous side.  It was reported during Theresa May’s first visit to Brussels as prime minister that he was demanding that all the Brexit talks be conducted in French.

While Barnier does speak English, he is far more comfortable talking in his native French. But the story, since denied, was seen as a snub to the notoriously monolingual Brits.

The long lens photo of a British Brexit strategy note that warned the EU team was “very French” may also have been on his mind as he took the podium in Brussels today.

Barnier asked, “In French or in English?” to laughter from the press.

He switched between English and French in his opening remarks but only answered questions in French, using translation to ensure he understood the questions.

Since his appointment Barnier has posted a series of tweets which could be seen as poking fun at Brexit. On a tour of Croatia to discuss the negotiations, he posed outside Zagreb’s Museum of Broken Relationships asking, “Guess where we are today?”

 

 

He also tweeted a picture of himself drinking prosecco after Boris Johnson sparked ridicule by telling an Italian economics minister his country would have to offer the UK tariff-free trade to sell the drink in Britain.

But Barnier can also be tough. He forced through laws to regulate every financial sector, 40 pieces of legislation in four years, when he was internal market commissioner, in the face of sustained opposition from industry and some governments.

He warned today, "Being a member of the EU comes with rights and benefits. Third countries [the UK] can never have the same rights and benefits since they are not subject to same obligations.”

On the possibility of Britain curbing free movement of EU citizens and keeping access to the single market, he was unequivocal.

“The single market and four freedoms are indivisible. Cherry-picking is not an option,” he said.

He stressed that his priority in the Brexit negotiations would be the interests of the remaining 27 member states of the European Union, not Britain.

“Unity is the strength of the EU and President Juncker and I are determined to preserve the unity and interest of the EU-27 in the Brexit negotiations.”

In a thinly veiled swipe at the British, again greeted with laughter in the press room, he told reporters, “It is much better to show solidarity than stand alone. I repeat, it is much better to show solidarity than stand alone”.

Referring to the iconic British poster that urged Brits to "Keep Calm and Carry On” during World War Two, he today told reporters, “We are ready. Keep calm and negotiate.”

But Barnier’s calm in the face of the unprecedented challenge to the EU posed by Brexit masks a cold determination to defend the European project at any cost.

James Crisp is the news editor at EurActiv, an online EU news service.