The Dissolution Honours

Four former defence ministers and Floella Benjamin are elevated to the House of Lords.

And through the round window, it's Lady Floella Benjamin. The actress and TV presenter, best known for her 14-year stint on the children's programme Playschool, has been honoured in the Dissolution Honours List for her work campaigning on education issues.

Benjamin is the founder of Touching Success, a charity that aims to link children with role models, and was a member of the Liberal Democrats' commission on primary education. She will sit in the House of Lords as a Lib Dem peer.

A few names had leaked out this morning, but the full list is now up on the Downing Street website. There are to be 55 new peers in all.

The list includes some predictable entries -- for instance, John Prescott and Michael Howard. (Incidentally, it is worth asking how his elevation to the Lords might affect Prescott's availability to make an effective party treasurer.)

Other former frontbenchers moving to the Lords include the former defence secretaries John Reid, Des Browne and John Hutton, the former chief secretary to the Treasury Paul Boateng and the former Northern Ireland first minister Ian Paisley.

Quentin Davies, another former minister of defence who crossed the floor from the Tories, will become a Labour peer. The former Metropolitan Police commisioner Sir Ian Blair, who was ousted shortly after Boris Johnson became Mayor of London, becomes a crossbench peer.

There are a few slightly more controversial political appointments, such as Michael Spicer, who until stepping down at the election chaired the 1922 Committee, and Sue Nye, the gatekeeper Gordon Brown blamed for his "Bigotgate" run-in with Gillian Duffy during the campaign in Rochdale. Anna Healy, a former adviser to Harriet Harman and wife of Jon Cruddas, also becomes a Labour peer.

The unions have their customary representation, with Margaret Wheeler of Unison and John Monks of the European TUC making an appearance. Single-issue campaigners, too, are present, with Helen Newlove, a campaigner against drink-related violence, and Deborah Stedman-Scott, chief executive of the employment charity Tomorrow's People, both becoming Tory peers.

But the prizes for the wackiest appointments most defintely go to Benjamin and Shireen Ritchie, grass-roots Tory campaigner and stepmother of Guy Ritchie, who was once interviewed in the Daily Mail about her love life as part of an article on "passionate pensioners".

Caroline Crampton is assistant editor of the New Statesman.

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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