Eurogroup demonstrates how not to calm fears about Cyprus

Jeroen Dijsselbloem nearly ruined everything.

Good news! Jeroen Dijsselbloem, chair of the group of eurozone finance ministers, nearly accidentally killed the euro yesterday.

In what Reuters blogger Felix Salmon described as a "formal, on-the-record joint interview" with Reuters and the FT, Dijsselbloem managed to suggest that the Cypriot bail-in was, in the words of Reuters' Luke Baker, "a new template for resolving eurozone banking problems".

Dijsselbloem said:

What we've done last night is what I call pushing back the risks… If there is a risk in a bank, our first question should be 'Okay, what are you in the bank going to do about that? What can you do to recapitalise yourself?'. If the bank can't do it, then we'll talk to the shareholders and the bondholders, we'll ask them to contribute in recapitalising the bank, and if necessary the uninsured deposit holders.

The tenor of Dijsselbloem's comments certainly suggests he meant them to be generally applied. And, on paper, it's a good ranking of priorities: first you get the bank, which caused the problem, to claw back as much as it can, then you talk to the shareholders and bondholders, who have knowingly taken a risk on the bank's solvency, and then, you talk to depositors. Because depositors are, after all, just people who have loaned money to the bank in a different form; and if they're uninsured, they've always known there was a risk of losing a lot if they bank went under.

Unfortunately, this is precisely the sort of thing that you aren't supposed to say. Because the obvious outcome of explicitly stating that uninsured depositors are considered legitimate sources of funds for the recapitalization of their banks is that uninsured depositors start taking their money out of their banks, particularly in the other eurozone nations where the banks aren't yet out of trouble.

Bank runs are, generally, considered bad news. So it's somewhat unsurprising that shortly after Dijsselbloem's interview hit the press, he released a terse statement walking it back. You could smell the burning rubber from the speed of the u-turn; it reads, in full:

Cyprus is a specific case with exceptional challenges which required the bail-in measures we have agreed upon yesterday.

Macro-economic adjustment programmes are tailor-made to the situation of the country concerned and no models or templates are used.

It's hard to know quite what Dijsselbloem was thinking – although Paweł Morski presents an entertaining scenario of his own. But it becomes a bit clearer when you look at his background.

Dijsselbloem is the Netherlands' finance minister, a position he has only been in since 2012. His extraordinary position of power in the eurogroup comes from the standard rotating presidency, rather than any particular competency, and, although his electoral career goes back to 2000, his only other policy jobs have been the leader of a parliamentary inquiry on education reform in 2007 and a post at the agriculture ministry from 1996 to 2000.

The eurozone seems to alternate between the under-elected and the under-qualified, and it's not getting any better.

Jeroen Dijsselbloem, with Christine Lagarde and Olli Rehn. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Voters are turning against Brexit but the Lib Dems aren't benefiting

Labour's pro-Brexit stance is not preventing it from winning the support of Remainers. Will that change?

More than a year after the UK voted for Brexit, there has been little sign of buyer's remorse. The public, including around a third of Remainers, are largely of the view that the government should "get on with it".

But as real wages are squeezed (owing to the Brexit-linked inflationary spike) there are tentative signs that the mood is changing. In the event of a second referendum, an Opinium/Observer poll found, 47 per cent would vote Remain, compared to 44 per cent for Leave. Support for a repeat vote is also increasing. Forty one per cent of the public now favour a second referendum (with 48 per cent opposed), compared to 33 per cent last December. 

The Liberal Democrats have made halting Brexit their raison d'être. But as public opinion turns, there is no sign they are benefiting. Since the election, Vince Cable's party has yet to exceed single figures in the polls, scoring a lowly 6 per cent in the Opinium survey (down from 7.4 per cent at the election). 

What accounts for this disparity? After their near-extinction in 2015, the Lib Dems remain either toxic or irrelevant to many voters. Labour, by contrast, despite its pro-Brexit stance, has hoovered up Remainers (55 per cent back Jeremy Corbyn's party). 

In some cases, this reflects voters' other priorities. Remainers are prepared to support Labour on account of the party's stances on austerity, housing and education. Corbyn, meanwhile, is a eurosceptic whose internationalism and pro-migration reputation endear him to EU supporters. Other Remainers rewarded Labour MPs who voted against Article 50, rebelling against the leadership's stance. 

But the trend also partly reflects ignorance. By saying little on the subject of Brexit, Corbyn and Labour allowed Remainers to assume the best. Though there is little evidence that voters will abandon Corbyn over his EU stance, the potential exists.

For this reason, the proposal of a new party will continue to recur. By challenging Labour over Brexit, without the toxicity of Lib Dems, it would sharpen the choice before voters. Though it would not win an election, a new party could force Corbyn to soften his stance on Brexit or to offer a second referendum (mirroring Ukip's effect on the Conservatives).

The greatest problem for the project is that it lacks support where it counts: among MPs. For reasons of tribalism and strategy, there is no emergent "Gang of Four" ready to helm a new party. In the absence of a new convulsion, the UK may turn against Brexit without the anti-Brexiteers benefiting. 

George Eaton is political editor of the New Statesman.