Monetary stimulus is much more fun when it buys you a holiday

Why not use QE to give holiday vouchers to northern Europe? No, really, why not?

It's always nice to read a proposal that could simultaneously ease the euro crisis and get you a free holiday to Barcelona. It's even more fun seeing the idea gestate from a slightly boozy tweet to a full-blown plan, set in motion by the disability blogger and campaigner Sue Marsh:

After a while, I had a thought. All of the countries in trouble were holiday destinations - Greece, Spain, Italy, Portugal even Ireland. The ones weathering the storm were the colder, northern countries. Would it not make sense to encourage and incentivise holidays? [...] Hell, was fun automatically not an option just because it was fun?

A few weeks ago, there were rumours of another 700 billion bailout for Eurozone banks. I had just watched Spanish banks get a bailout of more billions and the markets ate the extra money mercilessly in about 48 hours. With the press of a few buttons, the banks or markets appeared to have eaten the very money they had just created! [...]

I asked more seriously on twitter if any economists could explain to me why my holiday idea wouldn't be a better stimulus to the Eurozone than another bank bailout.

Marsh's idea was picked up by NIESR's Jonathan Portes, who wrote it up with Declan Gaffney, another prolific blogger on disability and welfare issues. Their plan sounds a lot like it would work, cost no more than a bank bailout, and as Sue says, be fun:

Our proposal is that they should issue vouchers to their citizens, redeemable only on spending in goods and services in those countries suffering financing difficulties (Spain, Ireland, Portugal, Greece, Cyprus and Italy). Holiday vouchers, in other words. So German holidaymakers could pay for their drinks in Cretan bars (and their flights, hotel bills, souvenirs, ferry tickets and the like) with "money" created by the ECB and distributed to them by their own government. The Greek businesses would in turn be able to trade in the vouchers for euros from the German government (via the banking system and the ECB).

This solves a number of problems. It would loosen monetary policy across the eurozone and ease the financing problems of the periphery countries. But most importantly, as Martin Wolf has long argued, the fundamental problem of the eurozone is not fiscal profligacy in periphery countries, but internal current account imbalances. Consumers in the periphery countries have been spending on goods and services from Germany and the Northern countries, but not vice versa, financed directly or indirectly by capital flows from those same countries. Now those flows have dried up; so one way or another, the current account balances must be corrected.

Both posts are well worth a read, and serve to drive home an important point: there are far more options to deal with crises than those that most policy makers think they actually have. When all you have is a hammer, everything looks like a nail; but European governments have far more than just hammers in their toolbox.

Greeks sunbathe on a beach in Athens. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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If the SNP truly want another referendum, the clock is ticking

At party conference in Glasgow, I heard Scotland’s governing party demand a future distinctly different from the one being sketched out in Westminster. 

Nicola Sturgeon described Glasgow as the “dear green city” in her opening address to the SNP party conference, which may surprise anyone raised on a diet of Ken Loach films. In fact, if you’re a fan of faded grandeur and nostalgic parks, there are few places to beat it. My morning walk to conference took me past chipped sandstone tenements, over a bridge across the mysterious, twisting River Kelvin, and through a long avenue of autumnal trees in Kelvingrove Park. In the evenings, the skyline bristled with Victorian Gothic university buildings and church spires, and the hipster bars turned on their lights.

In between these two walks, I heard Scotland’s governing party demand a future distinctly different from the one being sketched out in Westminster. Glasgow’s claim to being the UK’s second city expired long ago but I wonder if, post-Brexit, there might be a case for reviving it.



Scottish politics may never have looked more interesting, but at least one Glasgow taxi driver is already over it. All he hears in the back of his cab is “politics, fitba and religion”, he complained when he picked me up from the station. The message didn’t seem to have reached SNP delegates at the conference centre on the Clyde, who cheered any mention of another referendum.

The First Minister, though, seems to have sensed the nation’s weariness. Support for independence has fallen from 47 per cent in June (Survation) to 39 per cent in October (BMG Research). Sturgeon made headlines with the announcement of a draft referendum bill, but read her speeches carefully and nothing is off the table. SNP politicians made the same demands again and again – devolved control of immigration and access to the single market. None ruled out these happening while remaining in the UK.

If Sturgeon does want a soft Brexit deal, though, she must secure it fast. Most experts agree that it would be far easier for an independent Scotland to inherit Britain’s EU membership than for it to reapply. Once Article 50 is triggered, the SNP will be in a race against the clock.


The hare and the tortoise

If anyone is still in doubt about the SNP’s position, look who won the deputy leadership race. Angus Robertson, the gradualist leader of the party in the Commons, saw off a referendum-minded challenger, Tommy Sheppard, with 52.5 per cent of the vote.

Conference would be nothing without an independence rally, and on the final day supporters gathered for one outside. A stall sold “Indyref 2” T-shirts but the grass-roots members I spoke to were patient, at least for now. William Prowse, resplendent in a kilt and a waistcoat covered in pro-indy
badges, remains supportive of Sturgeon. “The reason she has not called an Indy 2 vote
is we need to have the right numbers,” he told me. “She’s playing the right game.”

Jordi McArthur, a member for 30 years, stood nearby waving a flagpole with the Scottish, Welsh and Catalan flags side by side. “We’re happy to wait until we know what is happening with Brexit,” he said. “But at the same time, we want a referendum. It won’t be Nicola’s choice. It will be the grass roots’ choice.”


No Gerrymandering

Party leaders may come and go, but SNP members can rely on one thing at conference – the stage invasions of the pensioner Gerry Fisher. A legendary dissenter, Fisher refused this year to play along with the party’s embrace of the EU. Clutching the
lectern stubbornly, he told members: “Don’t tell me that you can be independent and a member of the EU. It’s factually rubbish.” In the press room, where conference proceedings were shown unrelentingly on a big screen, hacks stopped what they were doing to cheer him on.


Back to black

No SNP conference would be complete without a glimpse of Mhairi Black, the straight-talking slayer of Douglas Alexander and Westminster’s Baby of the House. She is a celebrity among my millennial friends – a video of her maiden Commons speech has been watched more than 700,000 times – and her relative silence in recent months is making them anxious.

I was determined to track her down, so I set my alarm for an unearthly hour and joined a queue of middle-aged women at an early-morning fringe event. The SNP has taken up the cause of the Waspi (Women Against State Pension Inequality) campaign, run by a group of women born in the 1950s whose retirement age has been delayed and are demanding compensation. Black, who is 22, has become their most ­articulate spokeswoman.

The event started but her chair remained unfilled. When she did arrive, halfway through the session, it was straight from the airport. She gave a rip-roaring speech that momentarily convinced even Waspi sceptics like me, and then dashed off to her next appointment.


Family stories

Woven through the SNP conference was an argument about the benefits of immigration (currently controlled by Westminster). This culminated in an appearance by the Brain family, whose attempt to resist deportation back to Australia has made them a national cause célèbre. (Their young son has learned to speak Gaelic.) Yet for me, the most emotional moment of the conference was when another family, the Chhokars, stepped on stage. Surjit Singh Chhokar was murdered in 1998, but it took 17 years of campaigning and a change in double jeopardy laws before his killer could be brought to justice.

As Aamer Anwar, the family’s solicitor, told the story of “Scotland’s Stephen Lawrence”, Chhokar’s mother and sister stood listening silently, still stricken with grief. After he finished, the delegates gave the family a standing ovation.

Julia Rampen is the editor of The Staggers, the New Statesman’s politics blog

Julia Rampen is the editor of The Staggers, The New Statesman's online rolling politics blog. She was previously deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines. 

This article first appeared in the 20 October 2016 issue of the New Statesman, Brothers in blood