Signs you've gone on holiday to a fascist dictatorship

And what that means for the markets in Italy and Spain.

In 1969, as a nine year-old, the only real sign that we had gone on holiday to a fascist dictatorship was the policemen with machine guns walking up and down outside the hotel. The only other real sign was that Maria, my first true holiday love and our waitress at the Riviera Hotel Benidorm, would religiously count the number of chips each of us were given. Say what you will about Spanish fascism, it had the regularity and order of a well-run capitalist fast food outlet.

Meanwhile, across the Mediterranean, in Italy, they were about to embark upon "The Years of Lead" a roughly decade-long strategy of tension that would see both left and right-wing bombing and kidnapping campaigns designed to discredit their opponents and destabilize Italy. So serious was the threat, in 1990, the government of Giulio Andreotti revealed to Parliament the existence of "Gladio", NATO’s secret network of weapons readied should there be a communist coup in Italy.

Since the installation of King Juan Carlos I in Spain in 1975 and the creation of the First Republic in Italy after the Second World War both nations have designed political systems specifically to keep the extremes out of their politics – in the case of Spain it is fascism and, in the case of Italy, communism. The transition of, in particular, Spain to an unrecognizable modern democracy within a lifetime makes it almost inconceivable that either of these countries could return to their former roots. And yet as the financial crisis intensifies, the disenfranchisement of the young through unemployment and the loss of a stake in society re-ignites the 1899 words of Gustave Le Bon in The Psychology of Socialism when he says, "As soon as he has a family, a house, and few savings, the workman becomes immediately a stubborn Conservative. The Socialist, above all, the Anarchist-Socialist, is usually a bachelor, without home, means or family; that is to say a nomad…and barbarian."

Reinforcing the disenfranchisement, the contradictions within Europe are intensifying; German house prices are continuing to rise whilst Spanish property is still falling. Some estimates suggest that prices in Spain will decline between 10 and 30 per cent in the years to come, putting increased pressure on the banking system. Another cash injection can’t be ruled out. Some twenty billion euros from the European Stability Mechanism – equivalent to one year’s profits - would do the trick. In Italy property prices have hardly started to fall – they are only some six per cent down since 2010. But that isn’t the problem.

What is more worrying for the system is that the crisis that started in the property markets is now spreading to the funding of the small and medium-sized businesses which are the life blood of these nations. Euphemistically these are called "Non-Performing Loans" but to you and me they are businesses that can’t meet their debts because the economy is still in reverse gear. Larger companies have recognized this and are cutting out the banks (who can’t lend, won’t lend) and are going straight to the bond markets for their money. For smaller companies, a self-reinforcing spiral has been put in place at an employer level.  It’s also showing up in the habits of the eurozone as a whole – household borrowing has descended to a crawling pace and as we know capitalism can’t survive without a functioning credit cycle.

Problems in the banks will exclude the young from having a stake in society, as le Bon identified, which turns the financial crisis into a petri dish of social unrest. The post-war political structures of Italy and Spain were arguably put there on a "so-it-can’t-happen-again" basis. Powerful national democracies reinforced by semi-autonomous regional governments rife with self-interest and corruption makes it near-on impossible to have an electoral fascist or communist up-rising that would return them to their collective pasts. But also it creates a sclerotic system unable and unwilling to adapt and respond to crisis in a timely way. So it can’t be said that there won’t arise out of the intensification of the financial crisis a marked movement either to the left or the right in either or both of these countries borne out of a disenfranchised youth which spells trouble for their financial markets. At present both the Spanish and Italian bond markets are being held up by overt or covert market operations which is saving them from any form of real market analysis but this isn’t going to last and with it will come political change and even the end of the euro experiment.

Source: Bloomberg

 

Photograph: Getty Images

Head of Fixed Income and Macro, Old Mutual Global Investors

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David Osland: “Corbyn is actually Labour’s only chance”

The veteran Labour activist on the release of his new pamphlet, How to Select or Reselect Your MP, which lays out the current Labour party rules for reselecting an MP.

Veteran left-wing Labour activist David Osland, a member of the national committee of the Labour Representation Committee and a former news editor of left magazine Tribune, has written a pamphlet intended for Labour members, explaining how the process of selecting Labour MPs works.

Published by Spokesman Books next week (advance copies are available at Nottingham’s Five Leaves bookshop), the short guide, entitled “How to Select or Reselect Your MP”, is entertaining and well-written, and its introduction, which goes into reasoning for selecting a new MP and some strategy, as well as its historical appendix, make it interesting reading even for those who are not members of the Labour party. Although I am a constituency Labour party secretary (writing here in an expressly personal capacity), I am still learning the Party’s complex rulebook; I passed this new guide to a local rules-boffin member, who is an avowed Owen Smith supporter, to evaluate whether its description of procedures is accurate. “It’s actually quite a useful pamphlet,” he said, although he had a few minor quibbles.

Osland, who calls himself a “strong, but not uncritical” Corbyn supporter, carefully admonishes readers not to embark on a campaign of mass deselections, but to get involved and active in their local branches, and to think carefully about Labour’s election fortunes; safe seats might be better candidates for a reselection campaign than Labour marginals. After a weak performance by Owen Smith in last night’s Glasgow debate and a call for Jeremy Corbyn to toughen up against opponents by ex Norwich MP Ian Gibson, an old ally, this pamphlet – named after a 1981 work by ex-Tribune editor Chris Mullin, who would later go on to be a junior minister under Blai – seems incredibly timely.

I spoke to Osland on the telephone yesterday.

Why did you decide to put this pamphlet together now?

I think it’s certainly an idea that’s circulating in the Labour left, after the experience with Corbyn as leader, and the reaction of the right. It’s a debate that people have hinted at; people like Rhea Wolfson have said that we need to be having a conversation about it, and I’d like to kickstart that conversation here.

For me personally it’s been a lifelong fascination – I was politically formed in the early Eighties, when mandatory reselection was Bennite orthodoxy and I’ve never personally altered my belief in that. I accept that the situation has changed, so what the Labour left is calling for at the moment, so I see this as a sensible contribution to the debate.

I wonder why selection and reselection are such an important focus? One could ask, isn’t it better to meet with sitting MPs and see if one can persuade them?

I’m not calling for the “deselect this person, deselect that person” rhetoric that you sometimes see on Twitter; you shouldn’t deselect an MP purely because they disagree with Corbyn, in a fair-minded way, but it’s fair to ask what are guys who are found to be be beating their wives or crossing picket lines doing sitting as our MPs? Where Labour MPs publicly have threatened to leave the party, as some have been doing, perhaps they don’t value their Labour involvement.

So to you it’s very much not a broad tool, but a tool to be used a specific way, such as when an MP has engaged in misconduct?

I think you do have to take it case by case. It would be silly to deselect the lot, as some people argue.

In terms of bringing the party to the left, or reforming party democracy, what role do you think reselection plays?

It’s a basic matter of accountability, isn’t it? People are standing as Labour candidates – they should have the confidence and backing of their constituency parties.

Do you think what it means to be a Labour member has changed since Corbyn?

Of course the Labour party has changed in the past year, as anyone who was around in the Blair, Brown, Miliband era will tell you. It’s a completely transformed party.

Will there be a strong reaction to the release of this pamphlet from Corbyn’s opponents?

Because the main aim is to set out the rules as they stand, I don’t see how there can be – if you want to use the rules, this is how to go about it. I explicitly spelled out that it’s a level playing field – if your Corbyn supporting MP doesn’t meet the expectations of the constituency party, then she or he is just as subject to a challenge.

What do you think of the new spate of suspensions and exclusions of some people who have just joined the party, and of other people, including Ronnie Draper, the General Secretary of the Bakers’ Union, who have been around for many years?

It’s clear that the Labour party machinery is playing hardball in this election, right from the start, with the freeze date and in the way they set up the registered supporters scheme, with the £25 buy in – they’re doing everything they can to influence this election unfairly. Whether they will succeed is an open question – they will if they can get away with it.

I’ve been seeing comments on social media from people who seem quite disheartened on the Corbyn side, who feel that there’s a chance that Smith might win through a war of attrition.

Looks like a Corbyn win to me, but the gerrymandering is so extensive that a Smith win isn’t ruled out.

You’ve been in the party for quite a few years, do you think there are echoes of past events, like the push for Bennite candidates and the takeover from Foot by Kinnock?

I was around last time – it was dirty and nasty at times. Despite the narrative being put out by the Labour right that it was all about Militant bully boys and intimidation by the left, my experience as a young Bennite in Tower Hamlets Labour Party, a very old traditional right wing Labour party, the intimidation was going the other way. It was an ugly time – physical threats, people shaping up to each other at meetings. It was nasty. Its nasty in a different way now, in a social media way. Can you compare the two? Some foul things happened in that time – perhaps worse in terms of physical intimidation – but you didn’t have the social media.

There are people who say the Labour Party is poised for a split – here in Plymouth (where we don’t have a Labour MP), I’m seeing comments from both sides that emphasise that after this leadership election we need to unite to fight the Tories. What do you think will happen?

I really hope a split can be avoided, but we’re a long way down the road towards a split. The sheer extent of the bad blood – the fact that the right have been openly talking about it – a number of newspaper articles about them lining up backing from wealthy donors, operating separately as a parliamentary group, then they pretend that butter wouldn’t melt in their mouths, and that they’re not talking about a split. Of course they are. Can we stop the kamikazes from doing what they’re plotting to do? I don’t know, I hope so.

How would we stop them?

We can’t, can we? If they have the financial backing, if they lose this leadership contest, there’s no doubt that some will try. I’m old enough to remember the launch of the SDP, let’s not rule it out happening again.

We’ve talked mostly about the membership. But is Corbynism a strategy to win elections?

With the new electoral registration rules already introduced, the coming boundary changes, and the loss of Scotland thanks to decades of New Labour neglect, it will be uphill struggle for Labour to win in 2020 or whenever the next election is, under any leadership.

I still think Corbyn is Labour’s best chance. Any form of continuity leadership from the past would see the Midlands and north fall to Ukip in the same way Scotland fell to the SNP. Corbyn is actually Labour’s only chance.

Margaret Corvid is a writer, activist and professional dominatrix living in the south west.