by Peter Watt
Over the years, you always knew when there was a real crisis on, when you heard there was a meeting in COBRA. Whenever a news reader announced that the prime minister had chaired a meeting of COBRA it was generally pretty serious stuff. Apparently, in the interests of accuracy, the meetings are actually called COBR meetings – room A refers to just one of the secret command and control centres in and under Whitehall.
Wikipedia describes COBRA as:
“A term used to describe the formation of a crisis response committee, coordinating the actions of bodies within the government of the United Kingdom in response to instances of national or regional crisis, or during events abroad with major implications for the UK. The constitution of a COBR will depend on the nature of the incident but it is usually chaired by the Prime Minister or another senior minister, with other key ministers as appropriate, and representatives of relevant external organizations such as the Association of Chief Police Officers and the Local Government Association.”
These meetings and their venues were once so secret, it was only in 2010 that a single photograph of “room A” was released.
In recent years, and I may be wrong about this, it seems that COBRA has convened more often: summer riots, foot and mouth, terrorism, contingency planning for fuel strikes and volcanic ash clouds have all prompted the COBRA to raise its head. It is all perfectly sensible that the government has the ability to bring the right people together with the information they need to make effective decisions quickly. Not a panic move, but a good example of our government working to maintain essential services and keep us safe.
But at this very moment, while we teeter on the brink of a disaster, we do not seem very prepared and I am pretty sure that COBRA hasn’t met. Frankly I am beginning to get nervous and I am sure I am not the only one. If, as looks increasingly likely, Greece defaults and exits the Euro; let’s be honest, no one quite knows what the hell will happen next.
How much are the banks set to lose and will any go under? If my bank is over-exposed could I face ATM’s that stop giving me my money? Will there be civil disorder or a military coup in Greece? What will be the impact on the wider economy? How many more jobs will be lost? Will the contagion spread to Spain, Portugal, Ireland or Italy? At what point does social disorder spread? Could UK citizens become trapped in Europe as transport grinds to a halt when airlines and holiday companies collapse? Europe is our major export market so what will happen to our economy? Who will protect the most vulnerable, in an economy where the only discernable growth comes from the soup kitchen, when the proverbial really hits the fan?
If this was any other sort of crisis, we would be contingency planning morning, noon and night. Our preparations would dominate political discourse, and rightly so. But instead, the body politic is obsessed with hackgate; the machinations of the 1922 committee and voter registration.
All these issues may well be important; but we are also facing an enormous crisis, with substantial implications for each and every one of us, that has slowly gathered pace for months now. Day-by-day the potential catastrophe seems more and more likely. And yet according to George Osborne this week, we shouldn’t even be talking about it as it makes the situation worse:
“It is the uncertainty that is causing the damage, of course countries have got to make difficult decisions about their own public finances… but it’s the open speculation from some members in the eurozone about the future of some countries in the eurozone which I think is doing real damage across the whole European economy. The British recovery has been damaged over the last two years by uncertainty in the euro and that uncertainty would be magnified were a country to leave. It is that uncertainty and not austerity that is doing real damage to the European recovery and indeed the British recovery.”
He is right in one way; we shouldn’t talk ourselves into disaster. But for pity’s sake, the bloody Greeks are talking about the possibility of leaving the Euro; every newspaper is speculating about it; financial institutions are busy attempting to price in the implications into their forecasts and President Hollande told Chancellor Merkel that, “everything has to be on the table”.
George – the cat is out of the bag. Working to contain the situation is not the same thing as preparing for the worst. Presumably that is why COBRA met to discuss “potential” fuel strikes for instance?
The handling of any crisis is always part reality and part perception. It seems, however, that our Government is incapable of exerting any influence over events and therefore just waits for events to happen. The Government being seen to have at least some sort of control, or preparedness, is vital if people are to retain what little confidence in the economy they still have; but from where I am sitting, I do not feel very confident about the future, and neither do consumers or businesses.
And so, any minute now, I am hoping desperately to hear that “the prime minister has today chaired a meeting of COBRA, to discuss the potentially significant economic disruption that could result from ongoing Eurozone instability.”
At least then I’d know the whole mess was being taken seriously.
Peter Watt was general secretary of the Labour party
Tags: COBRA, Greek crisis, Peter Watt
7,000 bn of debt, and you want to add more debt onto the pile.
That’s the disaster, and you consitently ignore it.
Looting the treasury before its empty.
Nick – where do I say we should add more debt ? I don’t say it at all.
Let’s create another Euro crisis to distract people’s attention from the poor performace of the UK government
I remember all this doomsayer drivel before we crashed out of the ERM.
We survived that and flourished and we will survive this as well and flourish.
All this talk is doing is keeping the public distracted from the big issues here such as whether we should tie ourselves to Europe in the way we have.
I’d vote to stay in but the vast majority of Labour supporters would be out in a shot yet the politicians, as usual, aren’t listening.
The Greeks, like every single population given a choice don’t want political union in Europe and the sooner Cameron realises that and acts on it the better.
Peter Mandelson has already indicated he thinks a referendum is necessary and if Miliband grabs the idea this government is finished….
“Let’s create another Euro crisis to distract people’s attention”
You have GOT to be joking. You honestly think that the entire Euro crisis is just a red herring exaggerated by the coalition to conceal statistics? Do you not realise how colossal this crisis is, and how devastating it will inevitably be to our country?
Britain is not in control of its economic destiny. No European government has control of anything right now. We’re riding a runaway train on a badly damaged track. Leaning to the left or right will only make a tiny difference to our course. But lean to far either way and you can be damn sure of a wreck. If the financial markets were not based in London we’d be suffering far worse, like Spain is. It may be largely the bankers fault that we’re in this mess, but it’s only because they won’t p*ss in their own back yard that Britain fairly stable. That’s our only ace, unpleasant as it may be.
The last government squandered all our national resources and whipped up a vast personal debt crisis which has yet to be faced. We have no money left, and few options remaining. So buckle up, grit your teeth and get ready for a very rough ride over many years. There are no easy answers.
What is extraordinary about the Greek Eurozone crisis is the naive belief that once Greece is out of the Eurozone, duly devalued and free to make its mistakes on its own, the rest of the Eurozone can continue on its own, drearily plodding through austerity with speculators shut back in the box whence they came. What a fallacy. It should be blindingly obvious that the very next stage is that speculators look ahead to decide which is the next most vulnerable member of the Eurozone, and which after that and so on, until there is nothing left but a pile of obsolete bank notes rustling in the wind like tumbleweed in a Western. So Spain is now under fire, even before Greece is safely detached, and after that maybe Portugal, maybe Italy or maybe Ireland. So obvious but why was not this obvious to Cameron and Osborne?
Back in 2009 or so, whenever it was that Iceland had is spot of bother, I bumped into a renowned economist peer and remarked that the crisis was moving from banks to sovereign nations, and almost immediately he opined that Ireland would be forced out of the Ero enforce long. At the time I doubted it, thinking the UK would see the two economies too closely intertwined to let this happen, but now I am not so sure. The analogy of the 1930s is very strong, with the stronger nations thinking the problems did not concern thm, until of course they did!
I keep on thinking that surely it will be realised tha the United States would not have become as wealthy as it did if each of the several states had retained its own currency and there had never been a federal dollar. So I am an unrepentant supporter of the Euro, and indeed UK membership of it, with these following provisos.
It is not a snake system, as the ERM was, which always invited speculation if a currency reached the edges of the tolerances, a boundary increasingly more easily reached as banks lost touch with reality and started speculating in tens of billions against particular currency. So entry into the Euro had to be at sensible exchange rates, because, once in, you were (or would be, in the UK’s case) locked in with no ready escape (quite how Greece will escape remains to be seen, but it will involve tears at bedtime, that’s for sure).
The next proviso is that as there are many proxies for currency whereby speculators can gamble against a particular nation being in the Euro, it was vital that there should be or should have been supra-national oversight from the launch of the Euro of all those things that could jeopardise economic stability, such as bank asset:lending ratios, designation of what constitutes national debt (our own shoddy PFI schemes are an example of a action trying to weasel around the true facts of sovereign debt).
Now to some people this smacks of surrender of sovereignty, Brussels busybodying ad so on. But now perhaps people can wake up to the stresses and strains of federalism, which is not a dirty word to me, and why – to Americans – states’ rights remain a live issue. Horrifying though the debt levels of California may be, what should horrify Amercans even more is that the time is rapidly when sharp-eyed speculators will wake to the aggregate sovereign debt of the USA when all the component debts are taken into account, not only all the states as well as the Federal centre, but also all the Freddie Maes and Fernie Macs etc, and when they do they will start hunting for a weak link and throw into play hundreds of billions into the sovereign poker game of all time.
What I am saying, rather long-windedly, is that if you think nations can operate as lonesome cowboys, it’s a fantasy. But if you, like me, believe Europe should operate as a unit (it signally failed to do so when Yugoslavia broke up) and would be stronger with a single currency than without one and would be stronger with an effective federal government than the present mess of haggling sovereign states only nominally linked, it requires more than just wringing hands on the sidelines as Cameron and Osborne are doing. The health of Europe requires concerted action, the UK included, and reform of EU machinery also, to make such machinery fit for purpose (which a present it isn’t) in monitoring and regulating the component economies of Europe, something also signally neglected in the last few decades.
Dan Filson
The only way this currency can work is with more political integration.
That is exactly what every single country in the EU that is given a referendum on the matter doesn’t want. When it is put to normal people they reject it and rightly so.
You hold a minority and unpopular opinion and nothing you have stated in your post would convince anyone to change theirs.
To suggest that any country in Europe is incapable of governing itself and succeeding without a bunch of expensive unelected buffoons in Europe controlling their lives is patronising and frankly offensive.
As more and more populations have their democratic rights stripped from them with imposed governments all in favour of some bloated socialist type setup, imposed by the backdoor all that will happen is the natives will reach breaking point.
Freedom and democracy are being crushed to support an unwanted project and if Manuel Barroso or Van Rompuy are the answer to anything then you’re asking the wrong question…..