Either Britain will bail out the euro, or it won't. There's no middle way

David Cameron wants to fudge the issue with a technical argument about the IMF. It won't work.

Domestic debate around the euro crisis has taken yet another awkward turn for the prime minister. An essential aspect of the government's political strategy is to draw a clear distinctions between, on one side, a failing single currency project, ill-starred from the outset, and, on the other side, a wise Britain that chose to remain free to set its own interest rates and is blessed with a flexible exchange rate.

By extension, UK taxpayers should not be expected to contribute to a eurozone rescue fund. Greece's solvency woes are not, according to that argument, our problem. Except, of course, plainly they are, for at least two reasons. First, crisis in the eurozone is continuing to depress confidence and demand in the global economy, which is the main reason why growth is so sluggish in the UK. Second, if the Greek crisis is not contained, it will spread to larger European economies - Italy is next in the firing line - and a solvency crisis there would drag down those banks, including those in the UK, that hold European sovereign debt. A prolonged eurozone crisis will eventually become another banking crisis.

So it is in the UK's interests that a bailout works and if UK capital - whether administered through the IMF or bilaterally - is required for that outcome, well, then that surely is the national interest too. Downing Street is trying to delineate different kinds of contributions, attributing different moral weights depending on how "European" they look. If I understand it right, the ethical judgement maps out roughly as follows: If the IMF helps a struggling nation directly, that is a "good" bailout - and so UK taxpayer's money can be used. Britain might increase its IMF contributions on that basis. If the IMF joins forces with the ECB and eurozone governments to create a collective mechanism to support the euro that is a "bad" bailout - the UK would not increase its contributions on such a basis.

The obvious question is how the government plans to enforce the distinction before agreeing to pay more. The UK is already wading into deep diplomatic water by hinting it would hold any proposed EU treaty changes hostage, demanding repatriation of powers in exchange for cooperation. Now is it hinting it will withhold support for the IMF unless it gets guarantees that the Fund will not ally itself too closely with any European political project to save the euro?

Meanwhile, UK government policy - confirmed by Mark Hoban, Financial Secretary to the Treasury, in an emergency parliamentary debate today - is to impress on eurozone governments the "remorseless logic" of further fiscal integration.

So, just to be clear: The government (or at least its Conservative side) think it is a terrible idea for sovereign nations to bind themselves into a single currency and yet supports the urgent acceleration of that process. It rejects the contribution of British taxpayers' money to a bailout that might explicitly support a euro stabilisation process but would be happy to contribute to one that helped eurozone countries independently, thereby supporting euro stabilisation indirectly. This is not a sustainable position.

The ultimate problem for David Cameron remains the same as it has been for weeks. He has to choose between being a European statesman akin to his peers in Cannes and being an authentic Tory sceptic. Either he thinks the euro must succeed and that Britain, as a major EU player, must play a constructive role in working out a technical solution to the crisis. Or he thinks that Britain should step back from the whole disaster and, out of parsimony or moral horror at the idea of a Euro superstate, keep Treasury money away from the entire business. Or, to put it bluntly, either he is signing us up to a bailout or he isn't. He can try laundering the argument through technical IMF questions for a while. (And Labour seem for the time being to play along with the distinction.) But it won't work for long and it will be exposed by the sceptics as dishonest as soon as any debate on UK contributions comes to parliament.

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

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Leader: Mourning in Manchester

Yet another attack shows we are going to have to get to used to the idea that our liberalism and our freedoms can only be preserved by a strong state.

Children are murdered and maimed by a suicide bomber as they are leaving a pop concert in Manchester. As a consequence, the government raises the terror threat to “critical”, which implies that another attack is imminent, and the army is sent out on to the streets of our cities in an attempt to reassure and encourage all good citizens to carry on as normal. The general election campaign is suspended. Islamic State gleefully denounces the murdered and wounded as “crusaders” and “polytheists”.

Meanwhile, the usual questions are asked, as they are after each new Islamist terrorist atrocity. Why do they hate us so much? Have they no conscience or pity or sense of fellow feeling? We hear, too, the same platitudes: there is more that unites us than divides us, and so on. And so we wait for the next attack on innocent civilians, the next assault on the free and open society, the next demonstration that Islamism is the world’s most malignant and dangerous ideology.

The truth of the matter is that the Manchester suicide bomber, Salman Ramadan Abedi, was born and educated in Britain. He was 22 when he chose to end his own life. He had grown up among us: indeed, like the London bombers of 7 July 2005, you could call him, however reluctantly, one of us. The son of Libyan refugees, he supported Manchester United, studied business management at Salford University and worshipped at Didsbury Mosque. Yet he hated this country and its people so viscerally that he was prepared to blow himself up in an attempt to murder and wound as many of his fellow citizens as possible.

The Manchester massacre was an act of nihilism by a wicked man. It was also sadly inevitable. “The bomb was,” writes the Mancunian cultural commentator Stuart Maconie on page 26, “as far as we can guess, an attack on the fans of a young American woman and entertainer, on the frivolousness and foolishness and fun of young girlhood, on lipstick and dressing up and dancing, on ‘boyfs’ and ‘bezzies’ and all the other freedoms that so enrage the fanatics and contradict their idiot dogmas. Hatred of women is a smouldering core of their wider, deeper loathing for us. But to single out children feels like a new low of wickedness.”

We understand the geopolitical context for the atrocity. IS is under assault and in retreat in its former strongholds of Mosul and Raqqa. Instead of urging recruits to migrate to the “caliphate”, IS has been urging its sympathisers and operatives in Europe to carry out attacks in their countries of residence. As our contributing writer and terrorism expert, Shiraz Maher, explains on page 22, these attacks are considered to be acts of revenge by the foot soldiers and fellow-travellers of the caliphate. There have been Western interventions in Muslim lands and so, in their view, all civilians in Western countries are legitimate targets for retaliatory violence.

An ever-present threat of terrorism is the new reality of our lives in Europe. If these zealots can murder children at an Ariana Grande concert in Manchester, there is no action that they would not consider unconscionable. And in this country there are many thousands – perhaps even tens of thousands – who are in thrall to Islamist ideology. “Terror makes the new future possible,” the American Don DeLillo wrote in his novel Mao II, long before the al-Qaeda attacks of 11 September 2001. The main work of terrorists “involves mid-air explosions and crumbled buildings. This is the new tragic narrative.”

Immediately after the Paris attacks in November 2015, John Gray reminded us in these pages of how “peaceful coexistence is not the default condition of modern humankind”. We are going to have to get used to the idea that our liberalism and our freedoms can only be preserved by a strong state. “The progressive narrative in which freedom is advancing throughout the world has left liberal societies unaware of their fragility,” John Gray wrote. Liberals may not like it, but a strong state is the precondition of any civilised social order. Certain cherished freedoms may have to be compromised. This is the new tragic narrative.

This article first appeared in the 25 May 2017 issue of the New Statesman, Why Islamic State targets Britain

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