Tories Try to Play the Blame Game

Labour Party

The current government cannot continue to blame poor economic performance on the Eurozone sovereign debt crisis. 

That was the central argument in a great article in today’s Guardian by Larry Elliott.  You can read it by following the link here.

There are two things that strike me about the assertion that Britain’s economic fortunes are being so disastrously affected by problems on the continent.  Firstly, it is a very convenient excuse.  It’s not the first time I’ve said that the Conservative led coalition are leading the charge on these cuts because of their ideology, not through a considered view of what would be best for the British economy.  The fact that things are so close to the brink in Europe provides a very convenient distraction from quite how damaging the policies of Osborne and Cameron are. 

Secondly, if that is what they genuinely believe, I don’t think it’s entirely unreasonable to expect them to do something about it.  Sadly, they seem rather incapable.  It’s very illuminating to see today at the crisis summit, Sarkozy reportedly lambasted Cameron for trying to “tell us what to do”, allegedly saying that he was “sick” of Mr Cameron’s criticism.  On a day where Cameron’s own party are forcing a vote in the Commons on whether or not we should have a referendum on the UK’s membership of the European Union, he can’t be all that surprised to find himself rebuffed by his fellow European heads of government.

David Cameron is right to say that the Eurozone crisis matters to Britain, as they remain our largest trading partner.  But the difficulties in Europe are no excuse for the lacklustre recovery the UK has been experiencing in the last two years.

I also wanted to briefly mention William Hague’s comments on the House of Commons vote today.  In a quite extraordinary statement Hague said that the government couldn’t support the motion because ‘it wasn’t in either governing parties’ manifesto’.  The bare faced hypocrisy of that statement would be amusing if weren’t so infuriating.  I’m glad the Conservatives aren’t supporting the motion, but it would have nice if they could have used that kind of thinking when proposing changes to the NHS or raising top-up fees.

Anyway, the UK economy remains in dire straits and unemployment continues to rise.  A major step towards averting an even worse crisis in the Eurozone may or may not be taken this week.  What is certain is that the Tory led coalition is either unwilling or unable to do anything about either problem.

The Pessimism of the Right

Labour Party

When my report on Early Years Learning recently went through the European Parliament it received 506 votes out of the 588 MEPs who were in attendance that day.  All the Tories there abstained. 

Nothing unusual there, but something that I didn’t write about at the time was Daniel Hannan’s ‘explanation of vote’.  Explanations of vote can either be submitted verbally in the chamber after the vote or in writing later.  Not everyone does them, and the people who do often reserve them for when it is particularly important that some explanation is offered for the way they voted.  I will reproduce in full what Mr. Hannan said that day, but if you would like to read it for yourself, then follow the link here:

Daniel Hannan (ECR).Madam President, last summer I had the pleasure of visiting your constituency, and one day I took my children to the beach. I remember watching my two little girls building a sand castle, oblivious to the incoming tide, so captivated were they with the shells and twigs with which they were decorating their work.

I had not the heart to point out to them that the tide was coming in, and today I felt rather the same way as I read through our voting list. We have these epochal events – this economic crisis on our border, this collapse in our share of world GDP – and here we are talking about early years learning, about our responsibilities to the International Labour Organization, and about whether Sarajevo should be a European city of culture.

Let me give you the raw and scary statistics: in 1974, the nations of Western Europe accounted for 36% of world GDP; today it is 26%; in 2020 it will be 15%. While we are worrying about early years learning, putting out all our propaganda about drawing Europe together, and producing The Raspberry Ice Cream War, and while our children are being encouraged to read the unintentionally hilarious ‘Captain Euro’, our part of the world is being overtaken by more virile countries that have learned the benefits of decentralisation and the dispersal of power.

Surely the time is coming when all our pomp of yesterday will be one with Nineveh and Tyre?

The Madam President he addressed was British Liberal-Democrat Diana Wallis who was presiding over the session that day. 

I’m beginning to worry about Mr. Hannan, I fear he may be a little melancholy.  The unbridled pessimism that he comes out with is frankly frightening.  I wrote a blog earlier this week in response to his comments on the Today programme on the sovereign debt crisis in Greece, which were in a similar vein.  If you didn’t read it, you can do so here

This pessimism is everywhere on the right.  It was discussed at length when Ed Miliband came to the European Parliament and addressed a full sitting the Socialists and Democrats group. The depressing and unavoidable fact was that most people in that room, and the S&D has at least one MEP from each member state, was from a party that was in opposition in the own country.  Indeed, the S&D is the opposition group in the European Parliament, with the centre right European People’s Party holding more seats, though not an overall majority.

As Ed said during his visit, Labour’s message and beliefs could not be more important than right now.  Across Europe there is a feeling of doom and pessimism from the centre right parties that hold government across most of the EU member states. They speak of the necessity of far-reaching cuts affecting the services that make a difference to people’s lives.  This is all being portrayed as the inevitable result of the financial crisis.  But people are beginning to feel that the cure is worse than the disease.

Mr. Hannan’s response to my report, which was simply making a number of practical suggestions how children can be given the best possible start in life, was to evoke images of his children’s sand castle being washed out to sea and the ancient cities of Nineveh and Tyre.  Perhaps he was a romantic poet in a past life.  The fact is though that you can’t get out of the crisis  if we don’t invest in things like our children’s future.  Mr. Hannan and his ilk want you to believe that the ‘tide is coming in’.  They want you to believe this because it serves their ideological interests.  If we look back to the 20th century we find moments of absolute desperation, such as the Great Depression, or the aftermath of the Second World War when leftist governments helped rebuild their countries economies and societies with policies like the New Deal or creating the NHS.

Personally I’m tired of the pessimism of the right.  I believe that Ed Miliband, the Labour party, and the rest of our colleagues in the S&D can show that there is another way.

Public Service Europe on the Potential Greek Default

Labour Party

I have been quoted in an interesting article on the debt crisis in the Greece.  The article appeared on the excellent website Public Service Europe.  You can read it on the site by following the link here, but i have repoduced it in its entirety below.

Greek default could be Europe’s nadir

22 June 2011  |  by Dean Carroll

With predictions ranging from the collapse of the eurozone and the global banking system to the polar opposites of southern and northern Europe being partitioned financially, leaving the euro to the weak peripheral states while the likes of Germany and the Benelux countries create a new stronger common currency, economic forecasters have gone into overdrive. Citizens in Greece are withdrawing their money from banks and buying gold, instead, believing this is the safer option. Monthly bank withdrawals reached nearly £2bn in the first quarter of the year.Prime Minister George Papandreou may have won his parliamentary vote of confidence, by 155 votes to 143 with two abstentions, but it was a marginal victory. Whether his already-divided Socialist Party will triumph again at next week’s vote on one of the most-austere reform programmes attempted by any government in recent history – some €28bn in tax rises and spending cuts – remains to be seen. Individual politicians voting in the chamber, and thinking ahead to the next election, might reconsider sticking to party lines when the streets outside are degenerating into anarchy – led by Syntagma protestors. And the country’s €340bn debt equates to more than €30,000 euros per citizen or 150 per cent of annual GDP output. Can any government package, even one that privatises beloved beaches and lucrative tourist spots, really bridge such a financial chasm?

Well, Reuters reports that European Commission officials are planning a new bail-out to extend Greece’s year-old €110bn deal and fund it into late 2014 – with up to €60 billion of fresh loans. Some €1bn of EU cohesion funds could also be opened up to Greece early to trigger growth and reduce sharply rising unemployment. In fact, it seems unlikely that core Europe – Germany, France and the UK – will let Greece go to the wall. Even the US is doing all it can to prevent default. American banks are also badly exposed to Greek debt and the inter-linked credit default swaps, just as is the case with most of Europe.

Even though the Failed State Index says Greece is “by far the poorest performer with respect to deterioration in the political indicators”, such concerns may have to be put aside for now. As leading MEP blogger Mary Honeyball says: “If there is a time where we need to be pragmatic it is right now. If the right solution isn’t found, it will have dire consequences for us all.” Indeed, were Greece to fall, the solvency of the European Central Bank would be called into question. Especially – if Portugal, Ireland, Spain and Italy falter as a result of dented market confidence emanating from Greek default and the inevitable “abandon ship” by bond traders. But, again, the will of the Greek people rather than the European and international elites is likely to be the deciding factor when it comes to which painful path the country chooses out of its economic quagmire.

If Europe has not reached its nadir – with the MEPs’ expenses storm about to add to economic woes – it has certainly reached the “moment of truth”, as European Commission President José Manuel Barroso puts it. But there is still much to play for, if the political will and courage can be found to garner public support for reforms – both in Greece and across the European Union.