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

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The Fire Brigades Union reaffiliates to Labour - what does it mean?

Any union rejoining Labour will be welcomed by most in the party - but the impact on the party's internal politics will be smaller than you think.

The Fire Brigades Union (FBU) has voted to reaffiliate to the Labour party, in what is seen as a boost to Jeremy Corbyn. What does it mean for Labour’s internal politics?

Firstly, technically, the FBU has never affliated before as they are notionally part of the civil service - however, following the firefighters' strike in 2004, they decisively broke with Labour.

The main impact will be felt on the floor of Labour party conference. Although the FBU’s membership – at around 38,000 – is too small to have a material effect on the outcome of votes themselves, it will change the tenor of the motions put before party conference.

The FBU’s leadership is not only to the left of most unions in the Trades Union Congress (TUC), it is more inclined to bring motions relating to foreign affairs than other unions with similar politics (it is more internationalist in focus than, say, the PCS, another union that may affiliate due to Corbyn’s leadership). Motions on Israel/Palestine, the nuclear deterrent, and other issues, will find more support from FBU delegates than it has from other affiliated trade unions.

In terms of the balance of power between the affiliated unions themselves, the FBU’s re-entry into Labour politics is unlikely to be much of a gamechanger. Trade union positions, elected by trade union delegates at conference, are unlikely to be moved leftwards by the reaffiliation of the FBU. Unite, the GMB, Unison and Usdaw are all large enough to all-but-guarantee themselves a seat around the NEC. Community, a small centrist union, has already lost its place on the NEC in favour of the bakers’ union, which is more aligned to Tom Watson than Jeremy Corbyn.

Matt Wrack, the FBU’s General Secretary, will be a genuine ally to Corbyn and John McDonnell. Len McCluskey and Dave Prentis were both bounced into endorsing Corbyn by their executives and did so less than wholeheartedly. Tim Roache, the newly-elected General Secretary of the GMB, has publicly supported Corbyn but is seen as a more moderate voice at the TUC. Only Dave Ward of the Communication Workers’ Union, who lent staff and resources to both Corbyn’s campaign team and to the parliamentary staff of Corbyn and McDonnell, is truly on side.

The impact of reaffiliation may be felt more keenly in local parties. The FBU’s membership looks small in real terms compared Unite and Unison have memberships of over a million, while the GMB and Usdaw are around the half-a-million mark, but is much more impressive when you consider that there are just 48,000 firefighters in Britain. This may make them more likely to participate in internal elections than other affiliated trade unionists, just 60,000 of whom voted in the Labour leadership election in 2015. However, it is worth noting that it is statistically unlikely most firefighters are Corbynites - those that are will mostly have already joined themselves. The affiliation, while a morale boost for many in the Labour party, is unlikely to prove as significant to the direction of the party as the outcome of Unison’s general secretary election or the struggle for power at the top of Unite in 2018. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.