Emily Thornberry's resignation shows a rattled Labour leadership. Photo: YouTube screengrab
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It's ironic that Thornberry's now the symbol of out-of-touch Labour – and it's Labour's fault

Emily Thornberry's resignation cements divisions in the Labour party already highlighted by this by-election battle.

The shadow attorney general, who resigned tonight having tweeted a picture of a house in Strood adorned with three St George’s flags, has become over the course of an evening a symbol of out-of-touch Labour.

Emily Thornberry is a London MP, and not just any old London – Islington. An area of north London often lampooned by journalists and politicians, including Labour MPs, for being home to an out-of-touch metropolitan liberal elite. All it took was this fact, and that she tweeted a picture of a white van parked outside a house bearing some England flags, for Labour to become the centre of a by-election story in which the Tories should be the real losers.

However, although pictures of her smart house in the constituency are now flying around the internet, she is not a symbol of out-of-touch Labour. She was raised by her mother on a council estate outside Guildford beyond the outskirts of London. She became a human rights lawyer, and since entering parliament in 2005 has mainly worked – conscientiously by many accounts – on justice matters, being made shadow attorney general in 2011.

It is an irony that this MP is being lambasted as a classic out-of-touch Labourite, for an act she could no way have known would be blown up like this. It is a symptom of problems at the heart of her party.

There are a number of factors working against Thornberry. First, her tweet was inadvisable, though as many have pointed out, it could have been interpreted in any number of ways. Second was her confused defence, which swerved from saying people were being “prejudiced” towards Islington, to claiming she thought it was the number of flags that was remarkable, not what the flags represented. She eventually apologised on Twitter for any offence she’d caused.

But third, and the worst, was the reaction of the Labour leadership, which blew up this minor Twitter scuffle being boisterously explored by journalists awaiting the by-election result into a resignation.

Briefings were hastily poured out that Ed Miliband was furious and had told her so, and then the resignation came – another sign of how rattled the leadership is about the heart of its party. As I wrote earlier, there are widening gulfs between the national party and its activists, and those with “Blue Labour” versus post-New Labour credentials. These divisions have been highlighted by this by-election battle, and Thornberry’s resignation sets them in cement.

Anoosh Chakelian is deputy web editor at the New Statesman.

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Leader: The unresolved Eurozone crisis

The continent that once aspired to be a rival superpower to the US is now a byword for decline, and ethnic nationalism and right-wing populism are thriving.

The eurozone crisis was never resolved. It was merely conveniently forgotten. The vote for Brexit, the terrible war in Syria and Donald Trump’s election as US president all distracted from the single currency’s woes. Yet its contradictions endure, a permanent threat to continental European stability and the future cohesion of the European Union.

The resignation of the Italian prime minister Matteo Renzi, following defeat in a constitutional referendum on 4 December, was the moment at which some believed that Europe would be overwhelmed. Among the champions of the No campaign were the anti-euro Five Star Movement (which has led in some recent opinion polls) and the separatist Lega Nord. Opponents of the EU, such as Nigel Farage, hailed the result as a rejection of the single currency.

An Italian exit, if not unthinkable, is far from inevitable, however. The No campaign comprised not only Eurosceptics but pro-Europeans such as the former prime minister Mario Monti and members of Mr Renzi’s liberal-centrist Democratic Party. Few voters treated the referendum as a judgement on the monetary union.

To achieve withdrawal from the euro, the populist Five Star Movement would need first to form a government (no easy task under Italy’s complex multiparty system), then amend the constitution to allow a public vote on Italy’s membership of the currency. Opinion polls continue to show a majority opposed to the return of the lira.

But Europe faces far more immediate dangers. Italy’s fragile banking system has been imperilled by the referendum result and the accompanying fall in investor confidence. In the absence of state aid, the Banca Monte dei Paschi di Siena, the world’s oldest bank, could soon face ruin. Italy’s national debt stands at 132 per cent of GDP, severely limiting its firepower, and its financial sector has amassed $360bn of bad loans. The risk is of a new financial crisis that spreads across the eurozone.

EU leaders’ record to date does not encourage optimism. Seven years after the Greek crisis began, the German government is continuing to advocate the failed path of austerity. On 4 December, Germany’s finance minister, Wolfgang Schäuble, declared that Greece must choose between unpopular “structural reforms” (a euphemism for austerity) or withdrawal from the euro. He insisted that debt relief “would not help” the immiserated country.

Yet the argument that austerity is unsustainable is now heard far beyond the Syriza government. The International Monetary Fund is among those that have demanded “unconditional” debt relief. Under the current bailout terms, Greece’s interest payments on its debt (roughly €330bn) will continually rise, consuming 60 per cent of its budget by 2060. The IMF has rightly proposed an extended repayment period and a fixed interest rate of 1.5 per cent. Faced with German intransigence, it is refusing to provide further funding.

Ever since the European Central Bank president, Mario Draghi, declared in 2012 that he was prepared to do “whatever it takes” to preserve the single currency, EU member states have relied on monetary policy to contain the crisis. This complacent approach could unravel. From the euro’s inception, economists have warned of the dangers of a monetary union that is unmatched by fiscal and political union. The UK, partly for these reasons, wisely rejected membership, but other states have been condemned to stagnation. As Felix Martin writes on page 15, “Italy today is worse off than it was not just in 2007, but in 1997. National output per head has stagnated for 20 years – an astonishing . . . statistic.”

Germany’s refusal to support demand (having benefited from a fixed exchange rate) undermined the principles of European solidarity and shared prosperity. German unemployment has fallen to 4.1 per cent, the lowest level since 1981, but joblessness is at 23.4 per cent in Greece, 19 per cent in Spain and 11.6 per cent in Italy. The youngest have suffered most. Youth unemployment is 46.5 per cent in Greece, 42.6 per cent in Spain and 36.4 per cent in Italy. No social model should tolerate such waste.

“If the euro fails, then Europe fails,” the German chancellor, Angela Merkel, has often asserted. Yet it does not follow that Europe will succeed if the euro survives. The continent that once aspired to be a rival superpower to the US is now a byword for decline, and ethnic nationalism and right-wing populism are thriving. In these circumstances, the surprise has been not voters’ intemperance, but their patience.

This article first appeared in the 08 December 2016 issue of the New Statesman, Brexit to Trump