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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What the tragic case of Charlie Gard tells us about the modern world

People now believe medical science can perform miracles, and many search for them online.

If Charlie Gard had been born 40 years ago, there would have been no doubt about what would, and should, happen. Doctors treating a baby with a rare genetic condition that causes the body’s organs to shut down would have told his parents “nothing more can be done for him”. Charlie – deaf, epileptic, his muscles wasted, his brain probably damaged – would have died peacefully and unremarked. If an experimental US treatment had given such children an estimated 10 per cent chance of survival, his parents would not have known about it. Even if they had, they would have sorrowfully deferred to British doctors.

Now people believe that medical science can perform miracles and, through the internet, search the world for them. Yet they do not trust the knowledge and judgement of the medical profession. They rally public support and engage lawyers to challenge the doctors, as Charlie’s parents unsuccessfully did in the hope of being allowed to take their child for experimental treatment in America, despite warnings that it would be ineffective and distressing for him. This is a strange situation, the result of medical progress, social media, globalisation and the decline of deference. It causes much heartache to everybody involved but, like Charlie’s death, it is probably unavoidable.

Mogg days

A few weeks ago, Jacob Rees-Mogg was a 50-1 outsider for the Tory leadership. Now, as I write, he is third or fourth favourite, quoted by the bookmakers at between 6-1 and 10-1. For a few days, he was the second favourite, ahead of both Boris Johnson and Philip Hammond and behind only David Davis, the clear front-runner. Perhaps Davis organised rich friends – of which I am sure he has a few – to flood the market with bets on Rees-Mogg to frighten Tory MPs into rallying behind him.

But do not write off the man dubbed “the honourable member for the early 20th century” – generously, in my view, since he looks and behaves as though he has stepped off an 18th-century country estate and he actually lives on a 17th-century one. Rees-Mogg, a hard Brexiteer, would be an appropriate leader if we left the EU with no deal. Having excused ourselves from the world’s largest and most cohesive trading bloc, our best prospect for earning our living would be as a giant 18th-century theme park. Who better than Rees-Mogg to front it?

The royal revenue stream

Princess Diana is the gift that keeps on giving. TV companies produce documentaries on the anniversaries of her death and marriage. New tapes, photos and letters are unearthed. Anyone who cut her hair, cleaned her windows or sold her a frock can make a bob or two from “my memories of Diana”. Most important, Diana guarantees the future of the royal family for at least another half-century. In an ITV documentary, Prince William spoke movingly and sincerely (as did his brother, Harry) about losing a mother. Even the most hard-hearted republicans must now hesitate to deprive him also of a throne.

Strictly newsreading

I am a BBC fan. I regard the requirement, imposed by the Tories, that the corporation publishes the names and salary bands of employees paid more than £150,000 a year as an attempt to exploit “the politics of envy” of which Labour is normally accused. But I wonder if the corporation could help itself by offering even more transparency than the government demands.

It could, for example, explain exactly why Gary Lineker (£1.75m-£1.79m), Jeremy Vine (£700,000-£749,999) and Huw Edwards (£550,000-£599,999) are so handsomely paid. Do they possess skills, esoteric knowledge or magnetic attraction to viewers and listeners unavailable to other mortals and particularly to their women colleagues who are apparently unworthy of such lavish remuneration? Were they wooed by rival broadcasters? If so, which rivals and how much did they offer? Have BBC women received lower offers or no offers at all? The BBC could go further. It could invite a dozen unknowns to try doing the jobs of top presenters and commentators, turn the results into a programme, and invite viewers or listeners to decide if the novices should replace established names and, if so, at what salaries. We elect the people who make our laws and the couples who go into the final stages of Strictly Come Dancing. Why shouldn’t we elect our newsreaders and, come to that, Strictly’s presenters?

Mail order

A tabloid newspaper, founded in 1896 and now with its headquarters in Kensington High Street, west London, obsessed with the Islamist terror threat, convinced that it speaks for Middle England. An editor, in the chair for a quarter-of-a-century, who makes such liberal use of the C-word that his editorial conferences are known as “the vagina monologues” and whose voice is comparable to that of “a maddened bull elephant”. Sound familiar?

Two weeks ago, I wrote about Splash!, a newly published satirical novel about a tabloid newspaper from the long-serving Daily Mail columnist Stephen Glover. Now I have had early sight of The Beast, due out in September, also a satirical novel about a tabloid paper, written by Alexander Starritt who briefly worked on the Mail after leaving Oxford University. Like Glover, he pays homage to Evelyn Waugh’s classic Scoop, where the main characters worked for the Daily Beast, but there the similarities end. Glover has written what is essentially a defence of tabloid journalism. Starritt offers a fierce, blackly comic critique, though he cannot, in the end, quite avoid casting the editor Paul Dacre – sorry, Charles Brython – as a heroic, if monstrous, figure.

How many other journalists or ex-journalists are writing satirical novels about the Mail? And why the presumed public interest? Newspapers, with fewer readers than ever, are supposed to be dying. Fiction publishers seem to disagree. 

Peter Wilby was editor of the Independent on Sunday from 1995 to 1996 and of the New Statesman from 1998 to 2005. He writes the weekly First Thoughts column for the NS.

This article first appeared in the 27 July 2017 issue of the New Statesman, Summer double issue