by Alan Lockey
“There is no subtler, no surer means of overturning the existing basis of a society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.” John Maynard Keynes The Economic Consequences of the Peace (1919)
And so the Eurozone crisis lurches on. Of course it has been a long time since we wondered whether anybody at the European Central Bank has read any Keynes. If little else we can be certain of that. But as the crisis moves into a new and potentially decisive phase, with the possibility of ‘Grexit’ openly discussed, it is time to ask: what are the political implications for Labour’s policy on Europe?
The economics themselves remain as intractable as ever. Indeed, in a startling interview on Tuesday’s Today programme, Dr Michael Fuchs, vice-chairman of Angela Merkel’s CDU, practically admitted as much, suggesting that restoring Greek competitiveness through lowering their cost base was “impossible” but that Greece “must follow the rules” set out by the so called ‘troika’ of the IMF, ECB and EU.
But aside from shouting from the sidelines, Labour can do little to affect any of this. If the next election comes in 2015 then this crisis, for better, or more likely for worse, will have been resolved. What we might have done differently will be largely irrelevant. Of course it helps to associate the government with a reputation for austerity’s failings – but we need little impetus from Europe to do that.
And yet the sheer volatility of the crisis means we should not take anything for granted, particularly when it comes to Europe. It has long been conventional political wisdom that Europe represents promising terrain for Labour. This is based on two assumptions.
First, that whilst basic polling data might indicate that public opinion on Europe is, at best, divided, the Tories repeatedly fall into the trap of over-exaggerating its importance.
Second, that it can be used as a ‘wedge issue’ with which we can drive our opponents into a factional, frothy-mouthed frenzy, as we look on with united, pragmatic glee.
