Mehdi Hasan: Is Blair the best man to give advice to Labour in 2011?

Tony's back in town - but should he be speaking to Labour?

Tony Blair is back in Britain to promote the paperback edition of his 2010 memoir, A Journey. The permatanned ex-premier has been doing the rounds of the television and radio studios, offering his views on the Arab Spring as well as the Archbishop of Canterbury's guest-edit of the New Statesman.

He also offered this piece of advice to Ed Miliband, the current Labour leader. From the Times (£):

What he will say is that a progressive party will never win unless it shows that is "in favour of the business community, in favour of entrepreneurs, of enterprise".

Wise words, I guess, from a man who is making millions from his various corporate gigs. But why should Miliband or any other Labour politician heed his advice? The media, and the Cameroons, are still in awe of the former premier. But here are three points worth briefly considering before taking any political advice from Tony Blair in 2011:

1) On Blair's watch, Labour lost four million votes between 1997 and 2005. Lest we forget, in the 2005 general election, Blair was re-elected with a vote share of 35 per cent -- that's less than the majority-less Cameron achieved in 2010. Blair won in 2005 because his opponent was Michael Howard.

2) When Blair left office in the summer of 2007, his personal poll ratings were falling -- and so, too, were the Labour Party's. As the authors of the new book, Explaining Cameron's Coalition, argue, "Blair's ratings were falling from 1997 and that, even if Labour had not changed leader, it is likely that Blair's would have been as low as Brown's were by 2010."

3) Blair invaded Iraq. Regardless of whether you think it was right or wrong to topple Saddam Hussein, politically, the war was a massive misjudgement on Blair's part. It split his party and the country, cost him his political capital, wrecked his reputation and undermined any legacy he might have hoped to leave behind as a three-time election winner. As the former Lib Dem leader Menzies Campbell once put it, "Mary Tudor had Calais engraved on her heart. Blair will have Iraq engraved on his heart and there is no escaping it."

Mehdi Hasan is a contributing writer for the New Statesman and the co-author of Ed: The Milibands and the Making of a Labour Leader. He was the New Statesman's senior editor (politics) from 2009-12.

Getty
Show Hide image

Leader: The unresolved Eurozone crisis

The continent that once aspired to be a rival superpower to the US is now a byword for decline, and ethnic nationalism and right-wing populism are thriving.

The eurozone crisis was never resolved. It was merely conveniently forgotten. The vote for Brexit, the terrible war in Syria and Donald Trump’s election as US president all distracted from the single currency’s woes. Yet its contradictions endure, a permanent threat to continental European stability and the future cohesion of the European Union.

The resignation of the Italian prime minister Matteo Renzi, following defeat in a constitutional referendum on 4 December, was the moment at which some believed that Europe would be overwhelmed. Among the champions of the No campaign were the anti-euro Five Star Movement (which has led in some recent opinion polls) and the separatist Lega Nord. Opponents of the EU, such as Nigel Farage, hailed the result as a rejection of the single currency.

An Italian exit, if not unthinkable, is far from inevitable, however. The No campaign comprised not only Eurosceptics but pro-Europeans such as the former prime minister Mario Monti and members of Mr Renzi’s liberal-centrist Democratic Party. Few voters treated the referendum as a judgement on the monetary union.

To achieve withdrawal from the euro, the populist Five Star Movement would need first to form a government (no easy task under Italy’s complex multiparty system), then amend the constitution to allow a public vote on Italy’s membership of the currency. Opinion polls continue to show a majority opposed to the return of the lira.

But Europe faces far more immediate dangers. Italy’s fragile banking system has been imperilled by the referendum result and the accompanying fall in investor confidence. In the absence of state aid, the Banca Monte dei Paschi di Siena, the world’s oldest bank, could soon face ruin. Italy’s national debt stands at 132 per cent of GDP, severely limiting its firepower, and its financial sector has amassed $360bn of bad loans. The risk is of a new financial crisis that spreads across the eurozone.

EU leaders’ record to date does not encourage optimism. Seven years after the Greek crisis began, the German government is continuing to advocate the failed path of austerity. On 4 December, Germany’s finance minister, Wolfgang Schäuble, declared that Greece must choose between unpopular “structural reforms” (a euphemism for austerity) or withdrawal from the euro. He insisted that debt relief “would not help” the immiserated country.

Yet the argument that austerity is unsustainable is now heard far beyond the Syriza government. The International Monetary Fund is among those that have demanded “unconditional” debt relief. Under the current bailout terms, Greece’s interest payments on its debt (roughly €330bn) will continually rise, consuming 60 per cent of its budget by 2060. The IMF has rightly proposed an extended repayment period and a fixed interest rate of 1.5 per cent. Faced with German intransigence, it is refusing to provide further funding.

Ever since the European Central Bank president, Mario Draghi, declared in 2012 that he was prepared to do “whatever it takes” to preserve the single currency, EU member states have relied on monetary policy to contain the crisis. This complacent approach could unravel. From the euro’s inception, economists have warned of the dangers of a monetary union that is unmatched by fiscal and political union. The UK, partly for these reasons, wisely rejected membership, but other states have been condemned to stagnation. As Felix Martin writes on page 15, “Italy today is worse off than it was not just in 2007, but in 1997. National output per head has stagnated for 20 years – an astonishing . . . statistic.”

Germany’s refusal to support demand (having benefited from a fixed exchange rate) undermined the principles of European solidarity and shared prosperity. German unemployment has fallen to 4.1 per cent, the lowest level since 1981, but joblessness is at 23.4 per cent in Greece, 19 per cent in Spain and 11.6 per cent in Italy. The youngest have suffered most. Youth unemployment is 46.5 per cent in Greece, 42.6 per cent in Spain and 36.4 per cent in Italy. No social model should tolerate such waste.

“If the euro fails, then Europe fails,” the German chancellor, Angela Merkel, has often asserted. Yet it does not follow that Europe will succeed if the euro survives. The continent that once aspired to be a rival superpower to the US is now a byword for decline, and ethnic nationalism and right-wing populism are thriving. In these circumstances, the surprise has been not voters’ intemperance, but their patience.

This article first appeared in the 08 December 2016 issue of the New Statesman, Brexit to Trump