Cameron, like Syriza, has caused uncertainty in the EU. Photo: Getty
Show Hide image

The irony of arch EU prevaricator David Cameron crying "economic uncertainty" over Syriza's win

The Prime Minister is concerned about the financial instability Syriza's win could bring to Europe – when he's the one promising a referendum that would be deeply destabilising.

So tweeted our Prime Minister following the Greek general election results over the weekend. The Greek electorate voted the anti-austerity, left-wing party Syriza into power.

The fear resulting from Syriza's win is that it could lead to Greece exiting the eurozone. Its leader, and now the Greek Prime Minister, Alexis Tsipras' pledge is to renegotiate the terms of the country's massive international bailout to stop austerity hitting its citizens so hard. Anxiety about this meaning Grexit is on the horizon has already had the global markets jittering. The euro fell to $1.11 against the US dollar following the election result, which is the lowest level it has fallen to in over a decade.

Although there is cause for concern, Cameron's response to Syriza's win displays an astounding level of chutzpah. He is warning about what the prospect of Greece defaulting and exiting the eurozone would do to Europe's economy, when his 2017 EU referendum would undoubtedly cause financial damage via a drop in investor confidence and business investment. Business leaders claim that his promise of a vote on Britain's EU membership has already caused worrying uncertainty.

Anoosh Chakelian is deputy web editor at the New Statesman.

Getty Images.
Show Hide image

Why relations between Theresa May and Philip Hammond became tense so quickly

The political imperative of controlling immigration is clashing with the economic imperative of maintaining growth. 

There is no relationship in government more important than that between the prime minister and the chancellor. When Theresa May entered No.10, she chose Philip Hammond, a dependable technocrat and long-standing ally who she had known since Oxford University. 

But relations between the pair have proved far tenser than anticipated. On Wednesday, Hammond suggested that students could be excluded from the net migration target. "We are having conversations within government about the most appropriate way to record and address net migration," he told the Treasury select committee. The Chancellor, in common with many others, has long regarded the inclusion of students as an obstacle to growth. 

The following day Hammond was publicly rebuked by No.10. "Our position on who is included in the figures has not changed, and we are categorically not reviewing whether or not students are included," a spokesman said (as I reported in advance, May believes that the public would see this move as "a fix"). 

This is not the only clash in May's first 100 days. Hammond was aggrieved by the Prime Minister's criticisms of loose monetary policy (which forced No.10 to state that it "respects the independence of the Bank of England") and is resisting tougher controls on foreign takeovers. The Chancellor has also struck a more sceptical tone on the UK's economic prospects. "It is clear to me that the British people did not vote on June 23 to become poorer," he declared in his conference speech, a signal that national prosperity must come before control of immigration. 

May and Hammond's relationship was never going to match the remarkable bond between David Cameron and George Osborne. But should relations worsen it risks becoming closer to that beween Gordon Brown and Alistair Darling. Like Hammond, Darling entered the Treasury as a calm technocrat and an ally of the PM. But the extraordinary circumstances of the financial crisis transformed him into a far more assertive figure.

In times of turmoil, there is an inevitable clash between political and economic priorities. As prime minister, Brown resisted talk of cuts for fear of the electoral consequences. But as chancellor, Darling was more concerned with the bottom line (backing a rise in VAT). By analogy, May is focused on the political imperative of controlling immigration, while Hammond is focused on the economic imperative of maintaining growth. If their relationship is to endure far tougher times they will soon need to find a middle way. 

George Eaton is political editor of the New Statesman.