Papandreou and the one trillion euro question

Greeks are hoping for two things: leadership and a miracle.

It is not often that a prime minister stands up to make a speech to his party's MPs only to have his finance minister, and second in command in the party ranks, follow up by saying the exact opposite. That kind of political theatre takes epic dimensions when it happens as the country is on the verge of collapse.

But that is the state of Greek politics as we await a confidence vote that will determine the PM's fate. He seems isolated, having lost the trust of his people, the opposition, his party and his EU peers in the European Council.

Domestically George Papandreou has to deal with an internal rebellion in his own party, unhappy not just about the way he announced a referendum but mostly for having to lend their support to hugely unpopular austerity measures that has gained them the fury of the electorate.

Papandreou also has to deal with an opposition that has been playing politics throughout the process, refusing to provide him with political support in the hope they can force his government to collapse.

In the international scene, his referendum move has cost him all legitimacy with his EU partners, forcing them to accept for the first time that Greece leaving the euro is a very real possibility indeed.

So what happens now? A lot depends on the kind of deal Papandreou is able to strike with his own party and the opposition.

Many in the ruling Pasok want to see him go, not least his finance minister Evangelos Venizelos. The same goes for the New Democracy opposition. They have in the past 24 hours entertained the notion of a grand coalition government only to withdraw their support for such a notion hours later and suggest a government of technocrats to ratify the new bail-out package before calling for elections.

They are adamant not to offer any political cover to the PM and they want to ensure that he is nowhere near a new government.

Having said that the outcome of tonight's confidence vote is not set in stone yet. Papandreou might just survive, in which case the question is whether he will try to get the bail-out plan through parliament with the support of his party alone, pursue a coalition government that the opposition does not want or call an election.

The problem is that nobody knows whether an election will produce a conclusive result.

Politicians' popularity is at an all time low, no matter which party they come from. So the protest vote is expected to be big and a hang parliament very likely. Which means we will have to go into another electoral contest or a coalition government, which takes us back to square one, having wasted time and recourses in a divisive election campaign with the whole world watching.

Not to mention that the next instalment of IMF money will not be released until the new bail-out programme is agreed, an important factor in the equation considering the Greeks have some expensive bills to pay by mid December. Time is off the essence.

What does all that mean for the EU and the Eurozone? Uncertainty in Greece is causing nervousness in the markets with a direct impact in the way they view Italy, the latest victim of self-fulfilling prophecies.

But in many ways, and despite the turmoil, it buys time for the eurozone leaders to iron out all the outstanding details that were left pending after the 26-27 October European Council.

The fact is that two thirds of that deal remain intact and provided EU leaders push forward with plans to recapitalise banks and strengthen the EFSF (the eurozone's bail-out pot of money) the eurozone should be sound in the short and medium term.

Returning to Greece, the one trillion euro question is whether the country will be able to salvage its eurozone membership. The stakes are high and the consequences catastrophic.

A default and a return to the drachma will see the value of the new currency fall through the floor, with the cost of the debt, which will be in euros but serviced in drachmas, going through the roof. Greeks' savings will evaporate, not that this will mater much with the banking sector collapsing all around them.

Hence it is imperative that the government (and the opposition) get hold of the situation, abandon brinkmanship and Machiavellian manoeuvring and put the wellbeing of the country first. It's is hard to predict what the next few hours will bring but everyone is hoping for two things.
Leadership and a miracle.

Petros Fassoulas is the Chairman of the European Movement UK.

Petros Fassoulas is the chairman of European Movement UK

NS
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Labour is condemned to watch helplessly as Theresa May consolidates power

The Zombie Party is too weak to win and too strong to die. 

Labour’s defeat to the Tories in the Copeland by-election in Cumbria, which the party had held for more than 80 years, is a humiliation for Jeremy Corbyn and his moribund party. This is the first time a governing party had gained a seat in a by-election since Margaret Thatcher’s Conservatives won Mitchum and Morden in 1982. 
 
The victorious candidate Trudy Harrison, who increased the Tories’ share of the vote in this former Labour “stronghold" by more than 8 percentage points, hailed the victory as “truly historic”, while Labour MP John Woodcock called it a “disaster”, and even the shadow chancellor and Corbyn ally, John McDonnell, conceded it was a “profound disappointment”. 
 
At a time in the electoral cycle when a credible opposition should be winning by-elections and riding high in the polls, Labour is in disarray: rejected, humiliated, ridiculed. It has all but collapsed in Scotland, where the Tory leader Ruth Davidson has emerged as the popular, unapologetic leader of Unionism. And in England the danger now is not that it will lose seats to Ukip — whose leader Paul Nuttall was rejected yesterday in the Stoke-on-Trent Central by-election, which Labour held on a low turn-out after a dispiriting campaign — but to Theresa May’s Conservatives. 
 
The Copeland result was a vindication for Theresa May. When recently I interviewed her in Downing Street she had a simple message for Labour: we are coming after your voters – and she is. 
 
Because of its embrace of the radical left and internal divisions, May accused Labour of abandoning many of its traditional supporters. The party was not responding to their concerns on issues such as “the impact of immigration on lower income levels”.
 
True enough: Corbyn favours mass immigration and open borders yet is an economic protectionist – a classic Marxist position but electoral suicide in our new emerging post-liberal era in which populist movements are rising across Europe and an America First nationalist is in the White House.
 
“I hope there are Labour voters,” Theresa May told me, “out there who will now look at us afresh and say, ‘Labour hasn’t responded to our concerns, it hasn’t recognised what matters to us, but the Conservatives have seen that and are responding to it. I want our greater prosperity not to be confined to particular groups of people or a single part of the country.”
 
The polls suggest that more than simply disaffected Labour voters are looking at the Tories afresh, as we embark on the epic challenge of negotiating the Brexit settlement.
  
May believes that Brexit was not only a vote to leave the European Union but a demand for change from those people – many of them in places such as Copeland - who felt ignored and excluded from prosperity and greater opportunity.
 
Her vision is for a “Great Meritocracy” (whereas Corbyn’s is for a socialist republic) combining greater social justice with enhanced social mobility. It’s an intellectually fascinating and ambitious project and, if successful (and many doubt her, not least her own right wing), it has the potential to condemn Labour to electoral oblivion.
    
The collapse of the Labour party as a stable and credible political force is dismaying. Many of the party’s problems precede Corbyn, who is sincere and determined but is not a national leader. But then neither was Ed Miliband, who misunderstood the financial crisis, which he believed had created a “social democratic moment”, and misread the country he sought to govern. Miliband treated politics like an elevated Oxbridge PPE seminar and introduced the new rules by which the party elected its leader, disempowering MPs.
 
The distinguished Cambridge historian Robert Tombs has called the European Union a system of “managed discontents”. Something similar could be said of Corbyn’s Labour, except that its discontents are scarcely managed at all.

Most Labour MPs despise or are embarrassed by their leader. The MPs are divided and demoralised, with some pondering whether to follow Tristram Hunt and Jamie Reed (whose resignations created respectively the Stoke Central and Copeland by-elections) out of politics. The Corbynites are breaking up into factions (one hears talk of “hard” and “soft” Corbynites), and Corbyn himself is incapable of appealing to those who do not share his ideological convictions.
 
For now, the Labour leader retains the support of activists and members and, crucially, of Unite, Britain’s biggest union and the party’s paymaster. But even his friends must accept that he is leading the party in only one direction – into the abyss.
 
On the eve of the two by-elections, Corbyn posted a message on Facebook: “Whatever the results, the Labour Party – and our mass membership – must go further to break the failed political consensus, and win power to rebuild and transform Britain.”
 
The statement was received with derision on social media. The idea that Labour can win power any time soon (notwithstanding some black swan event) is magical thinking. Corbyn’s personal ratings among traditional working class semi-skilled and unskilled Labour voters are catastrophically poor. He appeals to students, affluent metropolitans with degrees, and minority groups. As for the majority of the electorate, forget it.
 
MPs are reluctant to challenge Jeremy Corbyn because they know any leadership contest would revitalize his leadership, as happened last summer when the Welsh MP Owen Smith mounted an ill-considered and doomed “coup”. Nor is there a pre-eminent candidate waiting in the shadows to strike, as Michael Heseltine was in the last years of the Thatcher administration.
 
So Labour will continue to be the Zombie Party: too weak to win but too strong to die. Its founding mission was to defend the labour interest and to create a fairer, more ethical society. But Labour has lost its role, its confidence and sense of purpose. Obsessed by identity liberalism, bewildered by Brexit and led by a radical socialist, Labour can only look on helplessly as the Tories start to win seats in its former heartlands and hunker down for another decade or more in power.

This column was originally published in the London Evening Standard.

Jason Cowley is editor of the New Statesman. He has been the editor of Granta, a senior editor at the Observer and a staff writer at the Times.