Disorder abroad, opportunism at home -- the euro crisis keeps getting worse

Balls' hostile position on UK money going towards an IMF bailout is clearly aimed at destabilising t

So it looks as if the G20 has failed to agree concrete, immediate measures to prop up struggling eurozone economies. President Sarkozy has said the details of a collective boost to IMF resources will be discussed at a finance ministers' meeting in February. Yes, February. In other words, those leaders gathered in Cannes who don't front eurozone governments are not mobilising (or indeed reaching into their pockets) today to stop bond market pressure on Greece and Italy.

It is officially branded a eurozone-only problem. In fact David Cameron has said it in exactly those terms: 

The primary responsibility of sorting out the problems of the eurozone lies with eurozone countries themselves.

What this means more specifically is that a heavy burden now falls on the European Central Bank where short-to-medium term market intervention is concerned. Meanwhile, France and Germany must now really get to grips with the medium-to-long term questions of political will, institutional structures, treaty changes and general revision of the EU project to make the single currency work.

There is no money left in Europe and no-one wants to lend anymore. I'd say we are getting pretty close to a "game over" moment for Greece in the eurozone.

But would a process to ease Greece out of the single currency make contagion to Italy more or less likely? Would a Greek exit suggest that eurozone discipline is real -- i.e. if you can't cut it in the club, you're out -- and thereby reassure markets that the crisis is being dealt with in a rigorous fashion, or would it just suggest that the whole thing is unravelling chaotically and lead to another panicky flight from all southern European debt? The latter seems more probable (but then I am neither an economist nor a bond trader.)

From a domestic point of view, Cameron is spared an immediate battle with his party over Britain's contribution to the IMF. That is a small consolation though, as the general lack of commitment to a consolidated global euro rescue means continued instability and insecurity and, by extension, a weaker economic outlook.

Meanwhile, on that IMF point, an aside on Labour's role (bearing in mind that the UK opposition party's position is on the margin of the real conversation): Ed Balls has come out with a pretty hostile position regarding UK money going towards a euro bailout via the IMF. The argument -- made also, it must be said, by most Tories -- is that the Fund is meant to administer loans and set technical conditions for reform to nations only (something along those lines is planned for Italy). It is emphatically not meant to be absorbed into some wider European single-currency political rescue machine. The problem is, of course, that it is very hard to ringfence UK money once it has been paid to the IMF, so any decision to contribute more can -- as I argued yesterday -- look like participation in a euro bailout. That is certainly how Tory eurosceptics will present it.

I have a suspicion Balls was less pernickety about the IMF's constitutional obligations when Gordon Brown was corralling the G20 into a global economic rescue package. No doubt he has found it easier to arrive at his current position knowing it paves the way for a parliamentary alliance against the government, should there be a vote on increasing the UK's IMF contributions.

The last time that happened, Labour sided with the sceptics but the Tory rebellion wasn't big enough and the opposition whips not firm enough to get sufficient MPs through the lobby to defeat the government.

Feelings would certainly be stronger and turnout higher in a repeat fixture. The idea of Labour abetting Tory eurosceptics represents a victory of sorts for the shadow Treasury team over the shadow Foreign Office team. Douglas Alexander has generally been of the view that Labour should be playing the part of would-be responsible global citizens, exposing Tory recklessness. As one person familiar with Alexander's thinking on the matter put it to me recently: "it isn't as if Labour's problem is not being opportunistic enough."

Ed Balls clearly thinks the opportunity to destabilise the coalition with a parliamentary defeat is too good to waste.

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

Getty
Show Hide image

There's nothing Luddite about banning zero-hours contracts

The TUC general secretary responds to the Taylor Review. 

Unions have been criticised over the past week for our lukewarm response to the Taylor Review. According to the report’s author we were wrong to expect “quick fixes”, when “gradual change” is the order of the day. “Why aren’t you celebrating the new ‘flexibility’ the gig economy has unleashed?” others have complained.

Our response to these arguments is clear. Unions are not Luddites, and we recognise that the world of work is changing. But to understand these changes, we need to recognise that we’ve seen shifts in the balance of power in the workplace that go well beyond the replacement of a paper schedule with an app.

Years of attacks on trade unions have reduced workers’ bargaining power. This is key to understanding today’s world of work. Economic theory says that the near full employment rates should enable workers to ask for higher pay – but we’re still in the middle of the longest pay squeeze for 150 years.

And while fears of mass unemployment didn’t materialise after the economic crisis, we saw working people increasingly forced to accept jobs with less security, be it zero-hours contracts, agency work, or low-paid self-employment.

The key test for us is not whether new laws respond to new technology. It’s whether they harness it to make the world of work better, and give working people the confidence they need to negotiate better rights.

Don’t get me wrong. Matthew Taylor’s review is not without merit. We support his call for the abolishment of the Swedish Derogation – a loophole that has allowed employers to get away with paying agency workers less, even when they are doing the same job as their permanent colleagues.

Guaranteeing all workers the right to sick pay would make a real difference, as would asking employers to pay a higher rate for non-contracted hours. Payment for when shifts are cancelled at the last minute, as is now increasingly the case in the United States, was a key ask in our submission to the review.

But where the report falls short is not taking power seriously. 

The proposed new "dependent contractor status" carries real risks of downgrading people’s ability to receive a fair day’s pay for a fair day’s work. Here new technology isn’t creating new risks – it’s exacerbating old ones that we have fought to eradicate.

It’s no surprise that we are nervous about the return of "piece rates" or payment for tasks completed, rather than hours worked. Our experience of these has been in sectors like contract cleaning and hotels, where they’re used to set unreasonable targets, and drive down pay. Forgive us for being sceptical about Uber’s record of following the letter of the law.

Taylor’s proposals on zero-hours contracts also miss the point. Those on zero hours contracts – working in low paid sectors like hospitality, caring, and retail - are dependent on their boss for the hours they need to pay their bills. A "right to request" guaranteed hours from an exploitative boss is no right at all for many workers. Those in insecure jobs are in constant fear of having their hours cut if they speak up at work. Will the "right to request" really change this?

Tilting the balance of power back towards workers is what the trade union movement exists for. But it’s also vital to delivering the better productivity and growth Britain so sorely needs.

There is plenty of evidence from across the UK and the wider world that workplaces with good terms and conditions, pay and worker voice are more productive. That’s why the OECD (hardly a left-wing mouth piece) has called for a new debate about how collective bargaining can deliver more equality, more inclusion and better jobs all round.

We know as a union movement that we have to up our game. And part of that thinking must include how trade unions can take advantage of new technologies to organise workers.

We are ready for this challenge. Our role isn’t to stop changes in technology. It’s to make sure technology is used to make working people’s lives better, and to make sure any gains are fairly shared.

Frances O'Grady is the General Secretary of the TUC.