Anti-EU graffiti in Athens. Photo: Getty Images
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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.

Ben Pruchnie/Getty Images
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Commons Confidential: Fearing the Wigan warrior

An electoral clash, select committee elections as speed dating, and Ed Miliband’s political convalescence.

Members of Labour’s disconsolate majority, sitting in tight knots in the tearoom as the MP with the best maths skills calculates who will survive and who will die, based on the latest bad poll, observe that Jeremy Corbyn has never been so loyal to the party leadership. The past 13 months, one told me, have been the Islington rebel’s longest spell without voting against Labour. The MP was contradicted by a colleague who argued that, in voting against Trident renewal, Corbyn had defied party policy. There is Labour chatter that an early general election would be a mercy killing if it put the party out of its misery and removed Corbyn next year. In 2020, it is judged, defeat will be inevitable.

The next London mayoral contest is scheduled for the same date as a 2020 election: 7 May. Sadiq Khan’s people whisper that when they mentioned the clash to ministers, they were assured it won’t happen. They are uncertain whether this indicates that the mayoral contest will be moved, or that there will be an early general election. Intriguing.

An unguarded retort from the peer Jim O’Neill seems to confirm that a dispute over the so-called Northern Powerhouse triggered his walkout from the Treasury last month. O’Neill, a fanboy of George Osborne and a former Goldman Sachs chief economist, gave no reason when he quit Theresa May’s government and resigned the Tory whip in the Lords. He joined the dots publicly when the Resolution Foundation’s director, Torsten Bell, queried the northern project. “Are you related to the PM?” shot back the Mancunian O’Neill. It’s the way he tells ’em.

Talk has quietened in Westminster Labour ranks of a formal challenge to Corbyn since this year’s attempt backfired, but the Tories fear Lisa Nandy, should the leader fall under a solar-powered ecotruck selling recycled organic knitwear.

The Wigan warrior is enjoying favourable reviews for her forensic examination of the troubled inquiry into historic child sex abuse. After Nandy put May on the spot, the Tory three-piece suit Alec Shelbrooke was overheard muttering: “I hope she never runs for leader.” Anna Soubry and Nicky Morgan, the Thelma and Louise of Tory opposition to Mayhem, were observed nodding in agreement.

Select committee elections are like speed dating. “Who are you?” inquired Labour’s Kevan Jones (Granite Central)of a stranger seeking his vote. She explained that she was Victoria Borwick, the Tory MP for Kensington, but that didn’t help. “This is the first time you’ve spoken to me,” Jones continued, “so the answer’s no.” The aloof Borwick lost, by the way.

Ed Miliband is joining Labour’s relaunched Tribune Group of MPs to continue his political convalescence. Next stop: the shadow cabinet?

Kevin Maguire is Associate Editor (Politics) on the Daily Mirror and author of our Commons Confidential column on the high politics and low life in Westminster. An award-winning journalist, he is in frequent demand on television and radio and co-authored a book on great parliamentary scandals. He was formerly Chief Reporter on the Guardian and Labour Correspondent on the Daily Telegraph.

This article first appeared in the 27 October 2016 issue of the New Statesman, American Rage