Greek bailout sets Europe on collision course with Tories

There's an aspect of the eurozone crisis that has yet to register with the British public.

The leaders of eurozone member countries did a deal to bail out Greece for the simple and compelling reason that failure to do so would have indicated that the entire single currency project was unsustainable. It doesn't take much effort of imagination to picture how financial markets would have responded to that revelation. Few things concentrate the mind like the threat of total economic meltdown.

So, for their European leaders' ability to recognise imminent catastrophe and avoid it at the last minute two cheers at most. Greece will be allowed to default in a relatively orderly fashion; its creditors will be cajoled, bribed and strong-armed into sharing some of the pain. (A good summary, of the deal, not too laden with technical jargon, is here).

Bear in mind that a lot of Greek sovereign debt is held by European banks, so while everyone is calling this a bailout of Athens, really Germany and France are staving off a financial crisis in their domestic markets too -- indirectly they are bailing out themselves.

That fact underlies an aspect of the eurozone crisis that has yet to register with the British public. The essential flaw that has been revealed in the architecture of the single currency is the lack of institutional mechanisms to correct economic imbalances between member states. Or, in English, you can't have a currency union without much closer coordination of economic policy. In that respect, the eurosceptics were right about one big thing: this was a political project from the start, demanding something like a European federal system to work.

That is now surely what will start to emerge. The systems being put in place to bailout Greece are only meant for Greece - in theory. In reality they provide the basis for a longer term structure for transfers between euro members in difficulty. The question then becomes: what are the penalties for those members that end up needing bailing out? The answer, inevitably, is some surrender of control over economic policy. This has already happened in Greece. Athens is implementing a brutal austerity package designed according to the demands of financial markets and foreign creditors, not the will of Greek politicians or voters.

In other words, if euro members collectively want to retain some control of their economic affairs and not be constantly reacting in disorderly panic to the whim of global capital markets they need to pool more sovereignty. They need to form something like a euro finance ministry and you don't have to be a fanatical eurosceptic to see in that the birth of a euro state.

Where does that leave Britain? The EU now looks very likely to head towards the "two tier" model that some French and German politicians, endlessly frustrated by British ambivalence, have long advocated. We would have an inner core with a single currency and closer political integration and an outer layer with different money but still a single market. To many Conservatives that sounds like a dream come true -- the open trade part of the EU but without the constant nagging of Berlin and Paris to harmonise every law and policy in sight.

But the idea that Britain could customise a perfect semi-detached relationship with Europe is a bit of a fantasy. Most of out integration with Europe -- those legendary regulations that Ukip and the Tory right seem to think render us all in perpetual bondage to Brussels -- are driven by the demands to harmonise standards and thereby allow free movement of goods within the single market. In other words, forget the single currency. Even as an "outer tier" member we'd want to retain a seat at the top table in order to have a say in the drafting of regulation. Brussels as the political bogeyman wouldn't just go away -- and our relations there would be tougher because the eurozone "inner tier" countries would (quite reasonably) try to exclude Britain from all sorts of crucial decisions.

In particular, it is hard to imagine Berlin and Paris accepting the continued dominance of European finance by the City of London. There is already a lot of muttering in the City to the effect that France has tried to use the credit crunch and banking crisis as an excuse to pursue a longheld agenda of smothering Britain's competitive financial advantages in regulation. That is bound to become a fault line in the next few years as European leaders try to build new institutional remedies to the crisis out of the short-term fixes agreed in relation to Greece.

What this all means is that there is going to be (yet) another round of negotiations over political integration. Britain might want to look on from the sidelines, but it will have to get involved in some capacity. That in turn will give the Tory right ample opportunity to demand the referendum it has always wanted on the whole question of EU membership. Like it or not, this Greek bailout has started a chain of events that brings European politics to the door of 10 Downing Street, via backbench Conservative MPs in a frenzy of righteous indignation. When that happens, David Cameron will be nostalgic for the phone-hacking scandal.

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

Getty.
Show Hide image

Andy Burnham and Sadiq Khan are both slippery self-mythologisers – so why do we rate one more than the other?

Their obsessions with their childhoods have both become punchlines; but one of these jokes, it feels to me, is told with a lot more affection than the other.

Andy Burnham is a man whose policies and opinions seem to owe more to political expediency than they do to belief. He bangs on to the point of tedium about his own class, background and interests. As a result he’s widely seen as an unprincipled flip-flopper.

Sadiq Khan is a man whose policies and opinions seem to owe more to political expediency than they do to belief. He bangs on to the point of tedium about his own class, background and interests. As a result he’s the hugely popular mayor of London, the voice of those who’d be proud to think of themselves as the metropolitan liberal elite, and is even talked of as a possible future leader of the Labour party.

Oh, and also they were both born in 1970. So that’s a thing they have in common, too.

Why it is this approach to politics should have worked so much better for the mayor of London than the would-be mayor of Manchester is something I’ve been trying to work out for a while. There are definite parallels between Burnham’s attempts to present himself as a normal northern bloke who likes normal things like football, and Sadiq’s endless reminders that he’s a sarf London geezer whose dad drove a bus. They’ve both become punchlines; but one of these jokes, it feels to me, is told with a lot more affection than the other.

And yes, Burnham apparent tendency to switch sides, on everything from NHS privatisation to the 2015 welfare vote to the leadership of Jeremy Corbyn, has given him a reputation for slipperiness. But Sadiq’s core campaign pledge was to freeze London transport fares; everyone said it was nonsense, and true to form it was, and you’d be hard pressed to find an observer who thought this an atypical lapse on the mayor’s part. (Khan, too, has switched sides on the matter of Jeremy Corbyn.)

 And yet, he seems to get away with this, in a way that Burnham doesn’t. His low-level duplicity is factored in, and it’s hard to judge him for it because, well, it’s just what he’s like, isn’t it? For a long time, the Tory leadership’s line on London’s last mayor was “Boris is Boris”, meaning, look, we don’t trust him either, but what you gonna do? Well: Sadiq is Sadiq.

Even the names we refer to them by suggest that one of these two guys is viewed very differently from the other. I’ve instinctively slipped into referring to the mayor of London by his first name: he’s always Sadiq, not Khan, just as his predecessors were Boris and Ken. But, despite Eoin Clarke’s brief attempt to promote his 2015 leadership campaign with a twitter feed called “Labour Andy”, Burnham is still Burnham: formal, not familiar. 

I’ve a few theories to explain all this, though I’ve no idea which is correct. For a while I’ve assumed it’s about sincerity. When Sadiq Khan mentions his dad’s bus for the 257th time in a day, he does it with a wink to the audience, making a crack about the fact he won’t stop going on about it. That way, the message gets through to the punters at home who are only half listening, but the bored lobby hacks who’ve heard this routine two dozen times before feel they’re in the joke.

Burnham, it seems to me, lacks this lightness of touch: when he won’t stop banging on about the fact he grew up in the north, it feels uncomfortably like he means it. And to take yourself seriously in politics is sometimes to invite others to make jokes at your expense.

Then again, perhaps the problem is that Burnham isn’t quite sincere enough. Sadiq Khan genuinely is the son of a bus-driving immigrant: he may keep going on about it, but it is at least true. Burnham’s “just a northern lad” narrative is true, too, but excludes some crucial facts: that he went to Cambridge, and was working in Parliament aged 24. Perhaps that shouldn’t change how we interpret his story; but I fear, nonetheless, it does.

Maybe that’s not it, though: maybe I’m just another London media snob. Because Burnham did grow up at the disadvantaged end of the country, a region where, for too many people, chasing opportunities means leaving. The idea London is a city where the son of a bus driver can become mayor flatters our metropolitan self-image; the idea that a northerner who wants to build a career in politics has to head south at the earliest opportunity does the opposite. 

So if we roll our eyes when Burnham talks about the north, perhaps that reflects badly on us, not him: the opposite of northern chippiness is southern snobbery.

There’s one last possibility for why we may rate Sadiq Khan more highly than Andy Burnham: Sadiq Khan won. We can titter a little at the jokes and the fibs but he is, nonetheless, mayor of London. Andy Burnham is just the bloke who lost two Labour leadership campaigns.

At least – for now. In six weeks time, he’s highly likely to the first mayor of Greater Manchester. Slipperiness is not the worst quality in a mayor; and so much of the job will be about banging the drum for the city, and the region, that Burnham’s tendency to wear his northernness on his sleeve will be a positive boon.

Sadiq Khan’s stature has grown because the fact he became London’s mayor seems to say something, about the kind of city London is and the kind we want it to be. Perhaps, after May, Andy Burnham can do the same for the north – and the north can do the same for Andy Burnham.

Jonn Elledge edits the New Statesman's sister site CityMetric, and writes for the NS about subjects including politics, history and Daniel Hannan. You can find him on Twitter or Facebook.