Papandreou's choice: Scylla or Charybdis

And yet the Greeks remain pro-European.

When we thought we had seen it all, as the latest EU summit had produced a deal that was supposed to draw a line under the debt crisis in parts of the eurozone and set the foundations for a healthy future for the single currency the unexpected happened. The Greek PM called a referendum and shocked the whole world as much as he shocked his own government.

European Union leaders are left speechless in disbelief, the markets fell in an existential depression and the Greeks are trying to make peace with the idea they will have to chose between Scylla and Charybdis.

George Papandreou's decision has been described, in equal measure, as blackmail, madness, suicide, even treason? He has obviously run out of political capital. His EU partners do not trust him. At home, many within his own party seem prepared to vote against the new bailout plan (and the new austerity measures that come with it).

So in a moment of desperation he has decided to pose the most impossible of questions to the Greek people. Punishing austerity or certain bankruptcy, humiliating poverty or real starvation, a place in the EU or relegations to the margins of Europe? His hope is that they will support the new bailout plan, offering him political legitimacy to continue implementing the measures imposed by Greece's international creditors in return for loans, financial guarantees and a reduction in the overall size of its debt.

But there lies the problem. The reason why we are still here after two years is that the IMF programme has failed. The remedy used requires violent reduction in the size of the state, deep cuts in spending on public services and relentless privatisation, despite how depressed the value of national assets is.

But those measures have led to the suffocation of economic activity. Unemployment has gone up dramatically, those who still have a job have seen their wages cut significantly, consumers' purchasing power has fallen exponentially, confidence in the economy has disappeared and higher taxes have wiped out what was left.

As a result Greece has been locked in a recessionary vicious circle with no credible plan for growth. If you couple that with a strong sense of injustice among the Greek people who see the political and business elites go unpunished for administrative incompetence, corruption and tax evasion, then we have an explosive mix. As a result there is no guessing when Greek society will explode.

So with a population at the verge of suicide, the outcome of any plebiscite is unpredictable, to put it mildly.

The irony is that the Greeks remain pro-European. They would chose to stay part of the eurozone everyday of the week. What they have come to resent is not so much the EU but the political and economic orthodoxy that is currently in power across Europe. They have been confronted with a set of neo-liberal economic policies that are religiously obsessed with austerity.

As economic growth in Europe is stalling the effects of this ideologically driven economic model are becoming obvious. The European south is stagnating, even big economies that enjoy the confidence of the markets (and have been allowed by them to print money at will) find it difficult to achieve and maintain even the most anaemic levels of growth.

And because the European economy is very interconnected and depends on intra-EU trade as much as it does on extra-EU trade the effects of that stagnation are starting to be felt even in the most affluent, and fiscally healthy, parts of the EU as well.

There is a solution though and it is based on an alternative economic model. Austerity must be replaced by investment. Not just at the national but at the European level as well. There are economies of scale to be achieved, there is added value in spending at the EU level and there is huge need for investment across the continent.

Furthermore, indebted countries must be given more time and better terms to repay their debts and balance their books. That balancing act needs to happen across the EU. In a single market the existence of deficit countries has a direct relation with the existence of surplus countries. If we are to have a common market, with a single currency we also need an integrated economic policy that evens out imbalances, reducing the distance between surpluses and deficits. In addition, the banking sector needs to be cleared out.

European banks are in effect global banks so IMF funds should go into re-capitalising these global banks and ridding them of bad debts, imposing loses on investors that make bad investments. EU funds should be invested in the real economy, in education, research and development, green technologies, telecommunication and energy infrastructure that will help the EU deliver growth and jobs.

Last but not least, efforts to restructure the architecture of the eurozone must be redoubled, with emphasis on economic convergence and common governance via supranational and directly elected institutions. A common currency deserves a common government, one elected by the people and for the people.

The Greeks have been asked a question. But as they are deliberating their answer they pose an even more important question to the EU as a whole. After two years of failed economic policies it is time the EU considered a different plan. One that invests in its people, in its social economic model, in its future as an unified continent.

The stakes could not be higher, not just for the Greeks. But for the EU as a whole.

Petros Fassoulas is the Chairman of the European Movement UK.

Petros Fassoulas is the chairman of European Movement UK

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Free movement isn't free: the truth about EU immigration

The UK does not need to leave the single market to restrict European migration - it already can.

In the Brext negotiations, the government has unashamedly prioritised immigration control over the economy. The UK must leave the single market, ministers say, in order to restrict free movement. For decades, they lament, European immigration has been "uncontrolled", making it impossible to meet the government's target of reducing net migration to "tens of thousands" a year.

It's worth noting that non-EU immigration alone (which ministers can limit) remains more than ten times this level (owing to the economic benefits). But more importantly, liberals and conservatives alike talk of "free movement" as if it is entirely free - it isn't.

Though EU citizens are initially permitted to live in any member state, after three months they must prove that they are working (employed or self-employed), a registered student or have "sufficient resources" (savings or a pension) to support themselves and not be "a burden on the benefits system". Far from being unconditional, then, the right to free movement is highly qualified.

The irony is that the supposedly immigration-averse UK has never enforced these conditions. Even under Theresa May, the Home Office judged that the cost of recording entry and exit dates was too high. Since most EU migrants are employed (and contribute significantly more in taxes than they do in benefits), there was no economic incentive to do so.

For some Brexiteers, of course, a job is not adequate grounds for an immigrant to remain. But even beyond implementing existing law, there is potential for further reform of free movement - even within the single market.

As Nick Clegg recently noted, shortly after the referendum, "a number of senior EU figures" were exploring a possible trade-off: "a commitment by the UK to pursue the least economically disruptive Brexit by maintaining participation in the single market and customs union, in return for a commitment to the reform of freedom of movement, including an 'emergency brake' on unusually high levels of intra-EU immigration." Liechtenstein, a member of the single market, has recently imposed quotas on EU migrants.

Yet with some exceptions, these facts are rarely heard in British political debate. Many Labour MPs, like their Conservative counterparts, support single market withdrawal to end free movement. The unheard truth that it isn't "free" could yet lead the UK to commit an avoidable act of economic self-harm.

George Eaton is political editor of the New Statesman.

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