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

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How the Lib Dems learned to love all-women shortlists

Yes, the sitting Lib Dem MPs are mostly white, middle-aged middle class men. But the party's not taking any chances. 

I can’t tell you who’ll be the Lib Dem candidate in Southport on 8 June, but I do know one thing about them. As they’re replacing a sitting Lib Dem (John Pugh is retiring) - they’ll be female.

The same is true in many of our top 20 target seats, including places like Lewes (Kelly-Marie Blundell), Yeovil (Daisy Benson), Thornbury and Yate (Clare Young), and Sutton and Cheam (Amna Ahmad). There was air punching in Lib Dem offices all over the country on Tuesday when it was announced Jo Swinson was standing again in East Dunbartonshire.

And while every current Lib Dem constituency MP will get showered with love and attention in the campaign, one will get rather more attention than most - it’s no coincidence that Tim Farron’s first stop of the campaign was in Richmond Park, standing side by side with Sarah Olney.

How so?

Because the party membership took a long look at itself after the 2015 election - and a rather longer look at the eight white, middle-aged middle class men (sorry chaps) who now formed the Parliamentary party and said - "we’ve really got to sort this out".

And so after decades of prevarication, we put a policy in place to deliberately increase the diversity of candidates.

Quietly, over the last two years, the Liberal Democrats have been putting candidates into place in key target constituencies . There were more than 300 in total before this week’s general election call, and many of them have been there for a year or more. And they’ve been selected under new procedures adopted at Lib Dem Spring Conference in 2016, designed to deliberately promote the diversity of candidates in winnable seats

This includes mandating all-women shortlists when selecting candidates who are replacing sitting MPs, similar rules in our strongest electoral regions. In our top 10 per cent of constituencies, there is a requirement that at least two candidates are shortlisted from underrepresented groups on every list. We became the first party to reserve spaces on the shortlists of winnable seats for underrepresented candidates including women, BAME, LGBT+ and disabled candidates

It’s not going to be perfect - the hugely welcome return of Lib Dem grandees like Vince Cable, Ed Davey and Julian Huppert to their old stomping grounds will strengthen the party but not our gender imbalance. But excluding those former MPs coming back to the fray, every top 20 target constituency bar one has to date selected a female candidate.

Equality (together with liberty and community) is one of the three key values framed in the preamble to the Lib Dem constitution. It’s a relief that after this election, the Liberal Democratic party in the Commons will reflect that aspiration rather better than it has done in the past.

Richard Morris blogs at A View From Ham Common, which was named Best New Blog at the 2011 Lib Dem Conference

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