Posts Tagged ‘eurozone crisis’

Does anyone outside the Westminster village give a damn about Leveson?

14/06/2012, 07:00:44 AM

by Peter Watt

People are suffering out there.  Families’ finances are under pressure as prices rise while their incomes remain static.  The numbers who are unemployed keeps rising and the fear of losing your job is very real for many more.

It manifests itself in small ways for many families, perhaps the occasional meal out has stopped.  Or the much loved and deserved annual holiday has been downgraded or cancelled.  The car costs more to fill up and that credit card bill suddenly seems a real worry as money runs out sooner in the month than it did.  The news is full of rumblings of worse to come as the dark clouds of possible Euro meltdown gather.  It all adds to up to a great deal of worry that is being quietly borne in millions of homes across the country.

People don’t expect to be told “it will all be alright” by their politicians.  And even if politicians did say that they wouldn’t be believed anyway.  But they have every right to expect that politicians are working tirelessly for them and on their behalf.

So imagine how you must have felt this week as you realised that there was still a couple of weeks to go until pay-day and the kids needed new shoes or the tax on the car was due.  And then you flicked on the news and saw that once again the entire political class appeared to have its collective head stuck up its own arse once again!


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Labour’s European quandary

18/05/2012, 07:00:13 AM

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.


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Why the eurozone crisis is lethal to Labour

11/11/2011, 07:51:38 AM

by Atul Hatwal

The eurozone crisis is an unmitigated disaster.

I know, hardly breaking news. But I’m not talking about the impending threat to global capitalism. Worrying as it is, rivers of words have flowed on that topic. It’s Labour’s electoral prospects that are the concern here.

On the face of it, the crisis should have improved the party’s standing in relation to the Tories.

The government’s economic strategy is in shreds. Growth has been flatlining for months, domestic demand is anaemic and now the fate of the mythical export led recovery rests in the hands of reticent eurozone members who have demonstrated a singular inability to get ahead of the markets.

Many of Labour’s criticisms have been vindicated and now, of all times, the public should be taking a look at Labour as a realistic alternative.

But they’re not.

And the longer the crisis continues, the less likely that becomes.

For all the catastrophic implications of the crisis for the government and it’s economic approach, the underlying narrative of what is happening in the eurozone is kryptonite for Labour.

The common story running through all the tribulations on the continent is that the markets destroy countries with high public spending.

Regardless of the economic realities of the situation – we’re not Italy or Greece, never were, never would have been under Labour, and besides, we’re not in the euro – the crisis is confirming the visceral fear of runaway spending within the British voters’ psyche.

It’s why they voted the last Labour government out of office and is a fear that has since remained at the forefront of their considerations.


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Apres le deluge – the political fall-out from the eurozone debacle

07/10/2011, 07:30:41 AM

by Atul Hatwal

It’s coming. Don’t say you weren’t warned. Peter Watt and Rob Marchant among others have been ringing the bell, but the gaze of Britain’s political class has been elsewhere.

Theresa May’s turn at Tory conference, as Mrs Slocombe, commanded more attention than the looming cataclysm. And now the shadow cabinet reshuffle is occupying Labour thoughts.

But as the eurozone ministers inch towards action, the shaking earth cannot be ignored for much longer.

In all of the furore around this rolling crisis, reams of newsprint have been written on the economics of the impending eurozone crash, but comparatively little on its political consequnces.

Yet it’s the political fall-out of this economic disaster which will utterly change Britain’s future.

Because after the eurozone finance ministers are finally driven to act, and the necessary billions are committed to securing eurozone, there will be a new European settlement.

The cost of Germany and France putting up the funds to save the euro will be pooled economic sovereignty in the eurozone, or more specifically a European bloc of 17 nations, where monetary and fiscal policy is run by the Franco-German alliance.

This will recast Europe and with it Britain’s economic prospects and security in three ways.

First, Britain will be vulnerable to increased eurozone protectionism, second the UK’s position as the preferred location for foreign direct investment in Europe will be threatened and third, Britain’s international defence commitments will likely need to be redrawn.

Protectionist voices have long been a central part of French economic policy.

Two years ago, the Sarkozy government received a formal slap on the wrist from the commission when one of its more hapless trade ministers admitted that Renault had shifted production of a model from Slovenia to France, in return for billions of euros of soft loans.


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