Anti-EU graffiti in Athens. Photo: Getty Images
Show Hide image

What Greece needs isn't Grexit, but debt relief

We must learn the lessons from the Jubilee Debt campaign, not heed the calls of a Eurosceptic right and a Trotskyite left, says Richard Howitt MEP.

There's something wrong when the leading Conservative Eurosceptic MEP talks up a 'no' vote in the Greek referendum as "explosive" and a similarly leading UKIP activist in my own region accuses Europe of humiliating the Greek people.

On the day of the Greek referendum, are they really moved by genuine concern about the human suffering caused by the biggest economic contraction in economic history, the slashed wages and pensions, the deepening unemployment?

No. For them, this is not at all about Grexit but Brexit.

Britain's Eurosceptic Right is seizing on this moment because what they want is crisis.

It is the classic Marxist dialectic and - lo and behold - we find the Tory Right quite unashamedly getting in to bed with a leftist party motivated by that very ideology.

Tory politicians who were saying two months ago that Ed Miliband was not trustworthy for British business are suddenly clapping their hands at a Greek Prime Minister who last week called bankers the equivalent of terrorists.

At least Nigel Farage's love affair with Vladimir Putin shields him from the same charge of hypocrisy, when Alexis Tsipras flies off to Moscow and publicly makes excuses for Russian breaches of international law over Ukraine.

But a Tory Party which was prepared to blame Labour in Britain for the entire global financial crisis to secure its own return to power, has another characteristic in common with Syriza in Greece.

Cameron and Tsipras are united that it's always got to be someone else's fault.

So in a week when George Osborne is preparing to announce an austerity budget in Britain with welfare claimants as some of the biggest victims, do not believe the crocodile tears of Tory politicians over Greece this weekend.

How can Labour and our social democratic allies across Europe react, when we are squeezed from the argument by this unholy alliance of extreme left and hard right?

First, that we are the anti-austerity party, not a leftist one based on making excuses for tax evasion and corruption, but one in the mainstream of European social democracy, with an honest prospectus which really is about investment, youth jobs and decent public services.

Second, that we will not use the poor of Greece as pawns in our own political game. Whether Greece ultimately chooses to leave the Euro or not, should surely be determined by what is in the interests of their peoples not ours.

Neither side in Greece says it wants to leave the Euro, and those politicians who try to claim the country may leave the EU altogether are spinning a lie. At best this argument is based on the legalistic interpretation that there is no Treaty provision for leaving the Euro, only the EU itself. But any serious politician understands that a political solution would be found.

Third, we should champion and not be frightened of debt forgiveness. The French economist Thomas Piketty told us at a Progressive Economy Forum in Brussels last week that debt restructuring is now an inevitable part of the solution. The IMF's own leaked report of last Friday said the same.

Many of us were activists in the Jubilee Debt campaign and, although the roots of the current crisis are very different, when debt itself becomes the greater problem, politicians have to be prepared to address greater solutions.

Remember that today Greece does enjoy a current surplus, but that is the country's historic debt which is making the economic situation unsustainable.

Fourth, we should deal directly rather than indirectly with the humanitarian consequences of the current crisis, revising the solidarity grant on low pensions, to ensure protection of the poorest pensioners and their families.

It was deeply shocking that Greek pensioners were not able to withdraw from bank machines this week, but tourists with international bank cards were. Instead surely we should be putting money in?

And fifth, we should nail the lie that this is only about Europe. It is a serious risk that Greece dropping out of the Euro will lead to 'contagion,' with other weaker economies falling over like dominoes.  But if the Eurozone members haven't made equally serious contingency plans to avoid this event by now, then it is they who will be at fault.

But their failure would never be Britain's success. One million British tourists go to Greece every year.  British banks have £7 billion in Greek debt, multiplied many times further by holdings in European banks who have much more. 

Even George Osborne admits a Eurozone collapse would be devastating for Britain - although it's a pity Tory divisions over Europe don't let his colleagues see the same.

For Labour, to our allies in the trade unions, we should ask them to be careful not to romanticise the far left. The choice in the referendum in Greece today is probably one between accepting an austerity package which will doubtless have further catastrophic consequences for jobs and services in the country; or in accelerating a return to the drachma and a consequent devaluation which could inflict just as much misery on the living standards of the Greek people.

And Syriza should never be forgiven for going in to coalition with a far-right, nationalist party, in order to attain power.

There may be a choice on the ballot paper, but there will be no winners in today's referendum.

Finally, there is a further parallel between the global banking collapse and today's Greek crisis. 

Both Alistair Darling in 2008 and European Central Bank President Mario Draghi in 2012 used the explicit words that they were prepared to do "whatever it takes."

What they were referring to was stopping bank collapse.  Today's political debate is still about using public funds to bailout private banks, much more than about aid to Greece or its people.

It is a huge dilemma for democratically elected politicians that banking is an essential prerequisite for a successful economy but that - eight years after Lehman Brothers folded - reforms to banking rules still leave banks themselves 'too big to fail.'

Just as with dodgy American financial derivatives, it was the private banks who chose to lend to Greece and who clearly failed to adequately assess the risk of that lending or the consequences of it failing.

And just as in the global financial crisis, it is ordinary people who are suffering, and those responsible for the crisis who are least suffering its consequences.

So I will be following the results tonight along with everyone else, but new international action on debt and bank reform provide the true answer, not nationalist or Eurosceptic responses from the right.

Photo: Getty
Show Hide image

The Home Office made Theresa May. But it could still destroy her

Even politicians who leave the Home Office a success may find themselves dogged by it. 

Good morning. When Theresa May left the Home Office for the last time, she told civil servants that there would always be a little bit of the Home Office inside her.

She meant in terms of its enduring effect on her, but today is a reminder of its enduring ability to do damage on her reputation in the present day.

The case of Jamal al-Harith, released from Guantanamo Bay under David Blunkett but handed a £1m compensation payout under Theresa May, who last week died in a suicide bomb attack on Iraqi forces in Mosul, where he was fighting on behalf of Isis. 

For all Blunkett left in the wake of a scandal, his handling of the department was seen to be effective and his reputation was enhanced, rather than diminished, by his tenure. May's reputation as a "safe pair of hands" in the country, as "one of us" on immigration as far as the Conservative right is concerned and her credibility as not just another headbanger on stop and search all come from her long tenure at the Home Office. 

The event was the cue for the Mail to engage in its preferred sport of Blair-bashing. It’s all his fault for the payout – which in addition to buying al-Harith a house may also have fattened the pockets of IS – and the release. Not so fast, replied Blair in a punchy statement: didn’t you campaign for him to be released, and wasn’t the payout approved by your old pal Theresa May? (I paraphrase slightly.)

That resulted in a difficult Q&A for Downing Street’s spokesman yesterday, which HuffPo’s Paul Waugh has posted in full here. As it was May’s old department which has the job of keeping tabs on domestic terror threats the row rebounds onto her. 

Blair is right to say that every government has to “balance proper concern for civil liberties with desire to protect our security”. And it would be an act of spectacular revisionism to declare that Blair’s government was overly concerned with civil liberty rather than internal security.

Whether al-Harith should never have been freed or, as his family believe, was picked up by mistake before being radicalised in prison is an open question. Certainly the journey from wrongly-incarcerated fellow traveller to hardened terrorist is one that we’ve seen before in Northern Ireland and may have occurred here.

Regardless, the presumption of innocence is an important one but it means that occasionally, that means that someone goes on to commit crimes again. (The case of Ian Stewart, convicted of murdering the author Helen Bailey yesterday, and who may have murdered his first wife Diane Stewart as well, is another example of this.)

Nonetheless, May won’t have got that right every time. Her tenure at the Home Office, so crucial to her reputation as a “safe pair of hands”, may yet be weaponised by a clever rival, whether from inside or outside the Conservative Party. 

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