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

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Everyone's forgotten the one issue that united the Labour party

There was a time when Ed Miliband spoke at Momentum rallies.

To label the row over the EU at Thursday’s Labour leadership hustings "fireworks" would be to endow it with more beauty than it deserves. Owen Smith’s dogged condemnation of John McDonnell’s absence from a Remain rally – only for Corbyn to point out that his absence was for medical reasons – ought to go down as a cringing new low point in the campaign. 

Not so long ago, we were all friends. In the course of the EU referendum, almost all of the protagonists in the current debacle spoke alongside each other and praised one another’s efforts. At a local level, party activists of all stripes joined forces. Two days before polling day, Momentum activists helped organise an impromptu rally. Ed Miliband was the headline speaker, and was cheered on. 

If you take the simple version of the debate, Labour’s schism on the EU appears as an aberration of the usual dynamics of left and right in the party. Labour's left is supposedly cheering a position which avoids advocating what it believes in (Remain), because it would lose votes. Meanwhile, the right claims to be dying in a ditch for its principles - no matter what the consequences for Labour’s support in Leave-voting heartlands.

Smith wants to oppose Brexit, even after the vote, on the basis of using every available procedural mechanism. He would whip MPs against the invocation of Article 50, refuse to implement it in government, and run on a manifesto of staying in the EU. For the die-hard Europhiles on the left – and I count myself among these, having run the Another Europe is Possible campaign during the referendum – there ought to be no contest as to who to support. On a result that is so damaging to people’s lives and so rooted in prejudice, how could we ever accept that there is such a thing as a "final word"? 

And yet, on the basic principles that lie behind a progressive version of EU membership, such as freedom of movement, Smith seems to contradict himself. Right at the outset of the Labour leadership, Smith took to Newsnight to express his view – typical of many politicians moulded in the era of New Labour – that Labour needed to “listen” to the views Leave voters by simply adopting them, regardless of whether or not they were right. There were, he said, “too many” immigrants in some parts of the country. 

Unlike Smith, Corbyn has not made his post-Brexit policy a headline feature of the campaign, and it is less widely understood. But it is clear, via the five "red lines" outlined by John McDonnell at the end of June:

  1. full access to the single market
  2. membership of the European investment bank
  3. access to trading rights for financial services sector
  4. full residency rights for all EU nationals in the UK and all UK nationals in the EU, and
  5. the enshrinement of EU protections for workers. 

Without these five conditions being met, Labour would presumably not support the invocation of Article 50. So if, as seems likely, a Conservative government would never meet these five conditions, would there be any real difference in how a Corbyn leadership would handle the situation? 

The fight over the legacy of the referendum is theatrical at times. The mutual mistrust last week played out on the stage in front of a mass televised audience. Some Corbyn supporters jeered Smith as he made the case for another referendum. Smith accused Corbyn of not even voting for Remain, and wouldn’t let it go. But, deep down, the division is really about a difference of emphasis. 

It speaks to a deeper truth about the future of Britain in Europe. During the referendum, the establishment case for Remain floundered because it refused to make the case that unemployment and declining public services were the result of austerity, not immigrants. Being spearheaded by Conservatives, it couldn’t. It fell to the left to offer the ideological counter attack that was needed – and we failed to reach enough people. 

As a result, what we got was a popular mandate for petty racism and a potentially long-term shift to the right in British politics, endangering a whole raft of workplace and legal protections along the way. Now that it has happened, anyone who really hopes to overcome either Brexit, or the meaning of Brexit, has to address the core attitudes and debates at their root. Then as now, it is only clear left-wing ideas – free from any attempt to triangulate towards anti-migrant sentiment– that can have any hope of success. 

The real dividing lines in Labour are not about the EU. If they were, the Eurosceptic Frank Field would not be backing Smith. For all that it may be convenient to deny it, Europe was once, briefly, the issue that united the Labour Party. One day, the issues at stake in the referendum may do so again – but only if Labour consolidates itself around a strategy for convincing people of ideas, rather than simply reaching for procedural levers.