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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Stephen Hawking's enthusiasm for colonising space makes him almost as bad as Trump

The physicist's inistence on mankind's expansion risks making him a handmaiden of inequality.

“Spreading out may be the only thing that saves us from ourselves,” Stephen Hawking has warned. And he’s not just talking about surviving the UK's recent run of record breaking heat. If humanity doesn’t start sending people to Mars soon, then in a few hundred years he says we can all expect to be kaput; there just isn’t enough space for us all.

The theoretical physicist gave his address to the glittering Starmus Festival of science and arts in Norway. According to the BBC, he argued that climate change and the depletion of natural resources help make space travel essential. With this in mind, he would like to see a mission to Mars by 2025 and a new lunar base within 30 years.

He even took a swipe at Donald Trump: “I am not denying the importance of fighting climate change and global warming, unlike Donald Trump, who may just have taken the most serious, and wrong, decision on climate change this world has seen.”

Yet there are striking similarities between Hawking's statement and the President's bombast. For one thing there was the context in which it was made - an address to a festival dripping with conspicuous consumption, where 18 carat gold OMEGA watches were dished out as prizes.

More importantly there's the inescapable reality that space colonisation is an inherently elitist affair: under Trump you may be able to pay your way out of earthly catastrophe, while for Elon Musk, brawn could be a deciding advantage, given he wants his early settlers on Mars to be able to dredge up buried ice.

Whichever way you divide it up, it is unlikely that everyone will be able to RightMove their way to a less crowded galaxy. Hell, most people can’t even make it to Starmus itself (€800  for a full price ticket), where the line-up of speakers is overwhelmingly white and male.

So while this obsession with space travel has a certain nobility, it also risks elevating earthly inequalities to an interplanetary scale.

And although Hawking is right to call out Trump on climate change, the concern that space travel diverts money from saving earth's ecosystems still stands. 

In a context where the American government is upping NASA’s budget for manned space flights at the same time as it cuts funds for critical work observing the changes on earth, it is imperative that the wider science community stands up against this worrying trend.

Hawking's enthusiasm for colonising the solar system risks playing into the hands of the those who share the President destructive views on the climate, at the expense of the planet underneath us.

India Bourke is an environment writer and editorial assistant at the New Statesman.

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