So lonely, so lonely. Photo: Getty Images
Show Hide image

We're still some distance from a lasting deal over Greece

It's good news that a deal has been reached between Greece and its creditors. But the details of this deal are not good.

Whatever some people might have been telling you, it's a good thing that a deal was done between Greece and its creditors earlier this week, but that doesn't mean it is a good deal.

Greece clings on, having been taken to the brink by both the country's international creditors and its government, whose decision to hold a referendum on and subsequent rejection of a previous (better) deal triggered two weeks of turmoil that left the country staring into the abyss.

The accelerated austerity policies demanded by the creditors will not only lead to more short-term misery, but in the long-run may end up being self-defeating - just as previous deals have been.

There's no point the Troika issuing a set of unrealistic demands, failing to learn the lessons of recent eurozone history. Such demands risk leaving Greece marooned amidst the circles of Hell, stuck in a nightmare of contraction, recession, bailout, contraction, recession, bailout, every few years, pulled one way by the creditors, the other by market and social reality, leading to the point at which default and departure seem preferable.

These demands, from predominantly right-wing EU leaders (and the World Bank and IMF), are but the latest manifestation of the post-crash failure of Europe’s centre-left. We have right-wing EU prime ministers, right-wing eurozone finance ministers, and hawkish global institutions calling the shots, while social democrat leaders like Francois Hollande find their voices drowned out by the likes of Angela Merkel and Wolfgang Schäuble.

That said, if Greece is to avoid perpetual bailout, the sword of Grexit forever hanging over its head, the government of Alexis Tsipras must take the lead and embrace reform, modernising the economy and changing the way it does business, something governments of left and right have failed to do.

As well as difficult reforms, the EU must offer the quid pro quo of positive Europe-wide action to help Greece, most obviously that means taking a realistic look at the prospects of repayment of Greece's debts. But there are other steps, such as tackling tax avoidance. In addition to strong domestic action on tax avoidance by the Greek government, EU action on tax dodging will enable them to broaden their tax base by making it easier to pursue tax dodgers across borders, stopping rich Greeks hoarding cash across Europe and evading their responsibilities.

What has gone before has not worked. And it is not just in Greece that prolonged austerity hasn't been working - across Europe a generation of young people are without jobs, without hope, without a future. France: 24 per cent. Slovakia: 26 per cent. Portugal: 33 per cent. Cyprus: 34 per cent. Italy: 42 per cent. Spain: 49 per cent. Greece: 50 per cent. Youth unemployment figures that should shame the right-wing austerians.

A less favourable deal - with even higher tax rises and deeper spending cuts - a loss of trust between Greece and the EU, and a prolonged period of pain: banks shut; capital controls; businesses going bust; 25 per cent unemployment; 50 per cent youth unemployment; a debt-to-GDP ratio of 180 per cent; an economy losing one per cent of GDP a week... this is the result of the creditors’ belligerence and Tsipras’s brinkmanship, and it’s wreaking a devastating toll.

And as always, it’s the ordinary people who suffer most. People out of work. People not being paid. People queuing for food, people queuing for money. Greece's downward spiral has been devastating to watch, and until a workable solution is implemented, they will continue to suffer.

 

Glenis Willmott MEP is Labour's Leader in the European Parliament.

 

Photo: Getty
Show Hide image

What Jeremy Corbyn gets right about the single market

Technically, you can be outside the EU but inside the single market. Philosophically, you're still in the EU. 

I’ve been trying to work out what bothers me about the response to Jeremy Corbyn’s interview on the Andrew Marr programme.

What bothers me about Corbyn’s interview is obvious: the use of the phrase “wholesale importation” to describe people coming from Eastern Europe to the United Kingdom makes them sound like boxes of sugar rather than people. Adding to that, by suggesting that this “importation” had “destroy[ed] conditions”, rather than laying the blame on Britain’s under-enforced and under-regulated labour market, his words were more appropriate to a politician who believes that immigrants are objects to be scapegoated, not people to be served. (Though perhaps that is appropriate for the leader of the Labour Party if recent history is any guide.)

But I’m bothered, too, by the reaction to another part of his interview, in which the Labour leader said that Britain must leave the single market as it leaves the European Union. The response to this, which is technically correct, has been to attack Corbyn as Liechtenstein, Switzerland, Norway and Iceland are members of the single market but not the European Union.

In my view, leaving the single market will make Britain poorer in the short and long term, will immediately render much of Labour’s 2017 manifesto moot and will, in the long run, be a far bigger victory for right-wing politics than any mere election. Corbyn’s view, that the benefits of freeing a British government from the rules of the single market will outweigh the costs, doesn’t seem very likely to me. So why do I feel so uneasy about the claim that you can be a member of the single market and not the European Union?

I think it’s because the difficult truth is that these countries are, de facto, in the European Union in any meaningful sense. By any estimation, the three pillars of Britain’s “Out” vote were, firstly, control over Britain’s borders, aka the end of the free movement of people, secondly, more money for the public realm aka £350m a week for the NHS, and thirdly control over Britain’s own laws. It’s hard to see how, if the United Kingdom continues to be subject to the free movement of people, continues to pay large sums towards the European Union, and continues to have its laws set elsewhere, we have “honoured the referendum result”.

None of which changes my view that leaving the single market would be a catastrophe for the United Kingdom. But retaining Britain’s single market membership starts with making the argument for single market membership, not hiding behind rhetorical tricks about whether or not single market membership was on the ballot last June, when it quite clearly was. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.