People wait to withdraw cash from an ATM in downtown Athens. Photo: Iakovos Hatzistavrou/AFP/Getty
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From taxi drivers to surgeons, everyone in Greece is now an expert on the country’s debt

The strange thing has been how few Greeks, whether politicians, business people, journalists or whoever, took the idea that their country might leave the euro seriously.

Greece is at the centre of the economic crisis: the worst-hit and longest-suffering part of the dev­eloped world. Five (or, depending on how you count it, seven) years of crisis have produced a country inured to grim financial news and plugged in to repercussions in the eurozone.

Social media – and especially Twitter – is everywhere. Hour by hour over the past few weeks, people have been following the latest developments in Brussels and Frankfurt in real time. Recently, I interviewed a neurosurgeon just after he’d removed a benign tumour. In between operations, he and his colleagues chatted about what the blogs were saying and showed each other tweets from eastern European finance ministers. A taxi driver, in broken English and with no prompting, recommended that I follow the FT’s Brussels bureau chief, Peter Spiegel, on Twitter. “He points out [Jean-Claude] Juncker’s lies,” he told me.

I could very happily make a Newsnight film in Athens speaking only to local taxi drivers. I’ve met former centre-right New Democracy voters who went for Syriza – “They promised ten things but if they do only two, I’ll be happy” – and taxi drivers with a better understanding of debt dynamics (the relationship between debt, interest rates and growth) than many politicians. I have also been reminded of the scale of the disaster that has hit the country. When someone tells you that they’re just glad they don’t have any children growing up in Greece, it’s hard to know how to respond.

 

Protest politics

Protests, demonstrations and marches have been near-nightly events in central Athens. I’ve seen Syntagma Square filled with anti-austerity campaigners, communists and pro-Europeans.

The last of these aren’t your usual demo-going suspects. Better-dressed and slightly older, they occasionally seem at a loss what to do with their hours in the square. Some of them choose to fill the time by offering “helpful” advice on the piece to camera I’ve just recorded, in order to “better reflect” what has been happening.

The crowds got very big some nights in the week, enough to overwhelm the mobile-phone networks. But they were never large enough to pass a good friend’s definition of a “huge” Greek rally: the McDonald’s in Syntagma has always stayed open.

 

Interesting times

While I’ve been here, I have spoken to a lot of Greek businesses, large and small. I’ve heard a huge list of everything that is wrong with the economy, from broken, illiquid (and now closed) banks, to over-regulation, plus the shortage of demand and spending power. Not a single business has mentioned the issue the government has made its main red line – the level of government debt.

That sort of makes sense. The level of Greece’s government debt is very high, yet the burden of servicing it is very low. Interest payments as a share of GDP are among the lowest in Europe. The debt has already been rescheduled, restructured and reduced. It’s still far too high and another write-down will be needed in the future, but on the ground it doesn’t feel like a pressing short-term problem.

 

The final countdown

Each day after filming and editing, the finished package had to be sent back to London before I headed to the BBC “live point” to appear on the show. The broadcast packages are sent via the internet and the BBC’s system provides a helpful timer showing how long it will take to send each file.

I noticed over this past week that the timer has an unhelpful habit of resetting itself. It will say there are four minutes to go – and then suddenly jump back up to nine. That is what this crisis has felt like over these few months: a timetable that keeps getting reset, with “final” deadlines that keep slipping.

As long as both sides are talking, a way will always be found to keep the clock running. Most of the supposed “hard” deadlines have been based around dates when payment is due on Greece’s debts, but to take that seriously is to impose a financial logic on a political problem. The debt is now almost entirely to “official creditors” – the IMF, the ECB, and other eurozone governments – so missing a payment is as much about international relations as economics.

 

Wolf at the door

The strange thing has been how few Greeks, whether politicians, business people, journalists or whoever, took the idea that their country might leave the euro seriously. Most seemed to expect a deal at some point and thought that any talk of a Grexit was scaremongering. The Yes campaign argued that a No vote could lead to exit, but many No voters just didn’t believe them. Perhaps this is because they’ve been here before. There is an element of “the boy who cried wolf” at play. But it is often forgotten that the fable did end with the arrival of a wolf.

 

Wrong call

The referendum was a huge moment for Greece, for the eurozone and for the EU. But there is still some debate, in Greece and outside, over why it happened and what it represents. Was it a strategic masterstroke from Syriza which united the Greek people and bought concessions from Europe? Or a desperate gamble by a government that had run out of options?

Syriza’s negotiating strategy with Europe since January had sought to win concessions based on three assumptions: that a Greek threat to leave the euro would cause severe market jitters and pressure Europe into a deal; that the Greek economy was in a strong enough position to weather uncertainty while the European Central Bank would keep funding the banks; and that left-leaning governments in Italy and France would provide support.

All three of these assumptions were reasonable. All three turned out to be wrong.

Duncan Weldon is economics correspondent for BBC2’s “Newsnight”. @DuncanWeldon

Duncan Weldon is a senior policy officer at the Trades Union Congress. He blogs for them at Touchstone.

This article first appeared in the 09 July 2015 issue of the New Statesman, The austerity war

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Is Yvette Cooper surging?

The bookmakers and Westminster are in a flurry. Is Yvette Cooper going to win after all? I'm not convinced. 

Is Yvette Cooper surging? The bookmakers have cut her odds, making her the second favourite after Jeremy Corbyn, and Westminster – and Labour more generally – is abuzz with chatter that it will be her, not Corbyn, who becomes leader on September 12. Are they right? A couple of thoughts:

I wouldn’t trust the bookmakers’ odds as far as I could throw them

When Jeremy Corbyn first entered the race his odds were at 100 to 1. When he secured the endorsement of Unite, Britain’s trade union, his odds were tied with Liz Kendall, who nobody – not even her closest allies – now believes will win the Labour leadership. When I first tipped the Islington North MP for the top job, his odds were still at 3 to 1.

Remember bookmakers aren’t trying to predict the future, they’re trying to turn a profit. (As are experienced betters – when Cooper’s odds were long, it was good sense to chuck some money on there, just to secure a win-win scenario. I wouldn’t be surprised if Burnham’s odds improve a bit as some people hedge for a surprise win for the shadow health secretary, too.)

I still don’t think that there is a plausible path to victory for Yvette Cooper

There is a lively debate playing out – much of it in on The Staggers – about which one of Cooper or Burnham is best-placed to stop Corbyn. Team Cooper say that their data shows that their candidate is the one to stop Corbyn. Team Burnham, unsurprisingly, say the reverse. But Team Kendall, the mayoral campaigns, and the Corbyn team also believe that it is Burnham, not Cooper, who can stop Corbyn.

They think that the shadow health secretary is a “bad bank”: full of second preferences for Corbyn. One senior Blairite, who loathes Burnham with a passion, told me that “only Andy can stop Corbyn, it’s as simple as that”.

I haven’t seen a complete breakdown of every CLP nomination – but I have seen around 40, and they support that argument. Luke Akehurst, a cheerleader for Cooper, published figures that support the “bad bank” theory as well.   Both YouGov polls show a larger pool of Corbyn second preferences among Burnham’s votes than Cooper’s.

But it doesn’t matter, because Andy Burnham can’t make the final round anyway

The “bad bank” row, while souring relations between Burnhamettes and Cooperinos even further, is interesting but academic.  Either Jeremy Corbyn will win outright or he will face Cooper in the final round. If Liz Kendall is eliminated, her second preferences will go to Cooper by an overwhelming margin.

Yes, large numbers of Kendall-supporting MPs are throwing their weight behind Burnham. But Kendall’s supporters are overwhelmingly giving their second preferences to Cooper regardless. My estimate, from both looking at CLP nominations and speaking to party members, is that around 80 to 90 per cent of Kendall’s second preferences will go to Cooper. Burnham’s gaffes – his “when it’s time” remark about Labour having a woman leader, that he appears to have a clapometer instead of a moral compass – have discredited him in him the eyes of many. While Burnham has shrunk, Cooper has grown. And for others, who can’t distinguish between Burnham and Cooper, they’d prefer to have “a crap woman rather than another crap man” in the words of one.

This holds even for Kendall backers who believe that Burnham is a bad bank. A repeated refrain from her supporters is that they simply couldn’t bring themselves to give Burnham their 2nd preference over Cooper. One senior insider, who has been telling his friends that they have to opt for Burnham over Cooper, told me that “faced with my own paper, I can’t vote for that man”.

Interventions from past leaders fall on deaf ears

A lot has happened to change the Labour party in recent years, but one often neglected aspect is this: the Labour right has lost two elections on the bounce. Yes, Ed Miliband may have rejected most of New Labour’s legacy and approach, but he was still a protégé of Gordon Brown and included figures like Rachel Reeves, Ed Balls and Jim Murphy in his shadow cabinet.  Yvette Cooper and Andy Burnham were senior figures during both defeats. And the same MPs who are now warning that Corbyn will doom the Labour Party to defeat were, just months ago, saying that Miliband was destined for Downing Street and only five years ago were saying that Gordon Brown was going to stay there.

Labour members don’t trust the press

A sizeable number of Labour party activists believe that the media is against them and will always have it in for them. They are not listening to articles about Jeremy Corbyn’s past associations or reading analyses of why Labour lost. Those big, gamechanging moments in the last month? Didn’t change anything.

100,000 people didn’t join the Labour party on deadline day to vote against Jeremy Corbyn

On the last day of registration, so many people tried to register to vote in the Labour leadership election that they broke the website. They weren’t doing so on the off-chance that the day after, Yvette Cooper would deliver the speech of her life. Yes, some of those sign-ups were duplicates, and 3,000 of them have been “purged”.  That still leaves an overwhelmingly large number of sign-ups who are going to go for Corbyn.

It doesn’t look as if anyone is turning off Corbyn

Yes, Sky News’ self-selecting poll is not representative of anything other than enthusiasm. But, equally, if Yvette Cooper is really going to beat Jeremy Corbyn, surely, surely, she wouldn’t be in third place behind Liz Kendall according to Sky’s post-debate poll. Surely she wouldn’t have been the winner according to just 6.1 per cent of viewers against Corbyn’s 80.7 per cent. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.