Morning Call: pick of the papers

The ten must-read comment pieces from this morning's papers.

1. Welcome, Mr Carney – Britain needs you (Financial Times)

The next BoE governor must chart a voyage back to something close to normality, writes Martin Wolf.

2. On Leveson, David Cameron's dilemma is that the press can still ruin careers (Guardian)

Coverage of the Leveson inquiry proves why the press must be reformed – but it also shows the risk involved in doing so, says Peter Wilby.

3. Don’t force the press into politicians’ arms (Times) (£)

Newspapers have forfeited the right to self-regulation, but state regulation is dangerous, argues Times editor James Harding.

4. Tories should take on Nigel Farage, not woo him (Independent)

Cameron knows that an electoral pact would be mad, impracticable, and philosophically incoherent, writes Steve Richards.

5. Obama should end his reticence on rights (Financial Times)

The US president would surely like his foreign policy legacy to be about more than success in a war on terror, says Gideon Rachman.

6. Europe's €50bn bung that enriches landowners and kills wildlife (Guardian)

The EU's farm subsidies are a modern equivalent of feudal aid, writes George Monbiot. As Europe suffers under austerity, it's right to call for reform.

7. It has taken the left years, but finally the press is at its mercy (Daily Telegraph)

Whatever low opinion the country has of its press, it has even less confidence in politicians as invigilators, says Benedict Brogan.

8. Ukip are not closet racists – but we’ve had enough (Daily Telegraph)

The adoption case in Rotherham has become a wake-up call from Ukip to Westminster, writes Nigel Farage.

9. It would make a mockery of justice if foreign judges start to overrule our own institutions (Daily Mail)

It’s time to face up to the issue and pull out of the European Court’s jurisdiction altogether, argues former justice minister Nick Herbert.

10. Binyamin Netanyahu's fig leaf could be back (Guardian)

Retirement might not stop Ehud Barak playing a key role in any Israeli plans to attack Iran, writes Aluf Benn.

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Leader: The unresolved Eurozone crisis

The continent that once aspired to be a rival superpower to the US is now a byword for decline, and ethnic nationalism and right-wing populism are thriving.

The eurozone crisis was never resolved. It was merely conveniently forgotten. The vote for Brexit, the terrible war in Syria and Donald Trump’s election as US president all distracted from the single currency’s woes. Yet its contradictions endure, a permanent threat to continental European stability and the future cohesion of the European Union.

The resignation of the Italian prime minister Matteo Renzi, following defeat in a constitutional referendum on 4 December, was the moment at which some believed that Europe would be overwhelmed. Among the champions of the No campaign were the anti-euro Five Star Movement (which has led in some recent opinion polls) and the separatist Lega Nord. Opponents of the EU, such as Nigel Farage, hailed the result as a rejection of the single currency.

An Italian exit, if not unthinkable, is far from inevitable, however. The No campaign comprised not only Eurosceptics but pro-Europeans such as the former prime minister Mario Monti and members of Mr Renzi’s liberal-centrist Democratic Party. Few voters treated the referendum as a judgement on the monetary union.

To achieve withdrawal from the euro, the populist Five Star Movement would need first to form a government (no easy task under Italy’s complex multiparty system), then amend the constitution to allow a public vote on Italy’s membership of the currency. Opinion polls continue to show a majority opposed to the return of the lira.

But Europe faces far more immediate dangers. Italy’s fragile banking system has been imperilled by the referendum result and the accompanying fall in investor confidence. In the absence of state aid, the Banca Monte dei Paschi di Siena, the world’s oldest bank, could soon face ruin. Italy’s national debt stands at 132 per cent of GDP, severely limiting its firepower, and its financial sector has amassed $360bn of bad loans. The risk is of a new financial crisis that spreads across the eurozone.

EU leaders’ record to date does not encourage optimism. Seven years after the Greek crisis began, the German government is continuing to advocate the failed path of austerity. On 4 December, Germany’s finance minister, Wolfgang Schäuble, declared that Greece must choose between unpopular “structural reforms” (a euphemism for austerity) or withdrawal from the euro. He insisted that debt relief “would not help” the immiserated country.

Yet the argument that austerity is unsustainable is now heard far beyond the Syriza government. The International Monetary Fund is among those that have demanded “unconditional” debt relief. Under the current bailout terms, Greece’s interest payments on its debt (roughly €330bn) will continually rise, consuming 60 per cent of its budget by 2060. The IMF has rightly proposed an extended repayment period and a fixed interest rate of 1.5 per cent. Faced with German intransigence, it is refusing to provide further funding.

Ever since the European Central Bank president, Mario Draghi, declared in 2012 that he was prepared to do “whatever it takes” to preserve the single currency, EU member states have relied on monetary policy to contain the crisis. This complacent approach could unravel. From the euro’s inception, economists have warned of the dangers of a monetary union that is unmatched by fiscal and political union. The UK, partly for these reasons, wisely rejected membership, but other states have been condemned to stagnation. As Felix Martin writes on page 15, “Italy today is worse off than it was not just in 2007, but in 1997. National output per head has stagnated for 20 years – an astonishing . . . statistic.”

Germany’s refusal to support demand (having benefited from a fixed exchange rate) undermined the principles of European solidarity and shared prosperity. German unemployment has fallen to 4.1 per cent, the lowest level since 1981, but joblessness is at 23.4 per cent in Greece, 19 per cent in Spain and 11.6 per cent in Italy. The youngest have suffered most. Youth unemployment is 46.5 per cent in Greece, 42.6 per cent in Spain and 36.4 per cent in Italy. No social model should tolerate such waste.

“If the euro fails, then Europe fails,” the German chancellor, Angela Merkel, has often asserted. Yet it does not follow that Europe will succeed if the euro survives. The continent that once aspired to be a rival superpower to the US is now a byword for decline, and ethnic nationalism and right-wing populism are thriving. In these circumstances, the surprise has been not voters’ intemperance, but their patience.

This article first appeared in the 08 December 2016 issue of the New Statesman, Brexit to Trump