Cameron's prescriptions for Europe miss the point (again)

The Prime Minister wants to talk about growth, but recognising the impact of German plans for collec

David Cameron wants Britain to play an integral role in reforming the European Union. He really does. His speech in Davos today explained how he is committed to reviving the continent's flagging economies with an agenda for boosting growth - deregulation; liberalisation, competitive taxation.

This is a familiar tune. Britain's position under Labour wasn't so very different - accepting a degree of political integration as the necessary price for creating an open, free trading space of continental scale and hoping, over time, to make that space look more like the UK economy and less like the French one.

The problem now, as I wrote in my column this week, is that the kind of diplomacy that is required actually to drive that agenda in the European Council - involving compromise, long-term nurturing of relationships with EU leaders; demonstrations of commitment to the European project - is also the kind of behaviour that the Conservative party generally finds unacceptable in a leader. In other words, Cameron can say this stuff, but he is no closer to getting it done if he can't build the strategic majorities among fellow EU member states to make it happen.

But there is another problem. Cameron's analysis of the EU's growth problems necessarily has to exclude discussion of the effect on demand of choreographed mass austerity - to concede that point would be to admit that the same force is in play in Britain. But clearly this is an issue. In his speech, the Prime Minister praised efforts by eurozone countries to bring their public finances under control - the drive for a fiscal compact led by German Chancellor Angela Merkel - but warned that it was not enough. He encourages the single currency bloc to consider issuing euro-bonds and effecting transfers between states - a true fiscal union, in other words. He essentially told Merkel to dip into her budget to save the euro.

If Cameron understands the inadequacy of Merkel's plans at the level of budget imbalances inside the eurozone, why does he not understand the related problem of German-enforced austerity for the continent draining aggregate demand? Why does he insist on offering only long-term supply-side solutions to the problem of European growth? The answer, I suspect, is that the government does understand the issue but it is taboo because of the coalition's political commitment to make austerity a morally inviolate part of domestic economic policy.

There was a meeting last week of the Franco-British Colloque - a top-level club of politicians, academics, business leaders etc to discuss cross-channel issues. It meets annually and this time the gathering was held in the UK. George Osborne was there and, someone who was present tells me, in the discussions of the EU's growth problem, the Chancellor effectively acknowledged the macroeconomic case against collective European austerity. He simply couldn't accept that it was relevant to the policies he is deploying in Britain. Treasury economists will surely be telling him the same thing: Merkel's fetish for fiscal conservatism is going to drag Europe down.

If Cameron wants to take a lead in promoting growth in Europe he could start by making that point. He can't of course, at least not without repudiating the central tenet of his government's economic policy.

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

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This is no time for a coup against a successful Labour leader

Don't blame Jeremy Corbyn for the Labour Party's crisis.

"The people who are sovereign in our party are the members," said John McDonnell this morning. As the coup against Jeremy Corbyn gains pace, the Shadow Chancellor has been talking a lot of sense. "It is time for people to come together to work in the interest of the country," he told Peston on Sunday, while emphasising that people will quickly lose trust in politics altogether if this internal squabbling continues. 

The Tory party is in complete disarray. Just days ago, the first Tory leader in 23 years to win a majority for his party was forced to resign from Government after just over a year in charge. We have some form of caretaker Government. Those who led the Brexit campaign now have no idea what to do. 

It is disappointing that a handful of Labour parliamentarians have decided to join in with the disintegration of British politics.

The Labour Party had the opportunity to keep its head while all about it lost theirs. It could have positioned itself as a credible alternative to a broken Government and a Tory party in chaos. Instead we have been left with a pathetic attempt to overturn the democratic will of the membership. 

But this has been coming for some time. In my opinion it has very little to do with the ramifications of the referendum result. Jeremy Corbyn was asked to do two things throughout the campaign: first, get Labour voters to side with Remain, and second, get young people to do the same.

Nearly seven in ten Labour supporters backed Remain. Young voters supported Remain by a 4:1 margin. This is about much more than an allegedly half-hearted referendum performance.

The Parliamentary Labour Party has failed to come to terms with Jeremy Corbyn’s emphatic victory. In September of last year he was elected with 59.5 per cent of the vote, some 170,000 ahead of his closest rival. It is a fact worth repeating. If another Labour leadership election were to be called I would expect Jeremy Corbyn to win by a similar margin.

In the recent local elections Jeremy managed to increase Labour’s share of the national vote on the 2015 general election. They said he would lose every by-election. He has won them emphatically. Time and time again Jeremy has exceeded expectation while also having to deal with an embittered wing within his own party.

This is no time for a leadership coup. I am dumbfounded by the attempt to remove Jeremy. The only thing that will come out of this attempted coup is another leadership election that Jeremy will win. Those opposed to him will then find themselves back at square one. Such moves only hurt Labour’s electoral chances. Labour could be offering an ambitious plan to the country concerning our current relationship with Europe, if opponents of Jeremy Corbyn hadn't decided to drop a nuke on the party.

This is a crisis Jeremy should take no responsibility for. The "bitterites" will try and they will fail. Corbyn may face a crisis of confidence. But it's the handful of rebel Labour MPs that have forced the party into a crisis of existence.

Liam Young is a commentator for the IndependentNew Statesman, Mirror and others.