George Osborne warned tonight there were only six weeks left to save the euro, reports Shamik Das.
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• George Osborne warned tonight there were only six weeks left to save the euro.
The chancellor said the recent market turmoil – which saw the FTSE fall 3.6% on the week, Paris’s CAC 40 down 4.4%, and Frankfurt’s DAX losing 4% – has created a “far greater sense of urgency”.
He said:
“There is a sense from across the leading lights of the eurozone that time is running out for them. There is a clear deadline at the [G20] Cannes summit in six weeks’ time… The eurozone has six weeks to resolve this political crisis.”
On the Greek crisis specifically (more on which in The World Outside Westminster below), Mr Osborne adds:
“I have made it a priority for the Financial Services Authority and the Bank of England to make sure that the UK banking system is adequately capitalised and have sufficient liquidity to deal with all eventualities. We have stress-tested sovereign write downs.”
Concluding:
“The break-up of Europe would be bad for Britain.”
Six weeks, however, may be on the long side, Faisal Islam telling tonight’s Channel Four News:
“Forget George Osborne’s six weeks to save the euro. It might have only six days.”
So what course of action should be taken? On Left Foot Forward this week, we’ve had both the euro-optimist case – from Peter Mandelson – and outlining the, perhaps more inevitable outcome of events, the euro-over case, from Barry Gardiner.
Explaining the need to “move beyond the eurozone”, Gardiner wrote:
“Germany has had a strong economy because it made structural adjustments at the time of reunification and has been able to sell competitively priced goods of high quality to its overspending European neighbours in a period of global growth.
“It is upon this foundation Germany has been able to be the banker of last resort for the eurozone’s more profligate neighbours. But in a shrinking world economy when her neighbours can no longer buy her high quality competitive goods, Germany too can no longer afford to be the bulwark of the eurozone.
“But whether membership is on the table or not, Greece will default. She will do so because this is what is in Greece’s own best interests. Instead of straining every economic sinew to be locked in as the pauper of Europe in perpetuity, the Greek people will realise growth and productivity will only come after they have borne the stigma of default.
“After a return to the drachma, there will be dislocation and tragedy and Greece will have to sell assets and re-price its goods until they become competitive but a sudden depreciation is no more than what Argentina did in 2001 nor than the United States itself did in the 1930s.”
While Lord Mandelson, the former European Trade Commissioner, said it was time to “stand up, win the argument, act decisively and lead”:
“Some say that our approach as far as the public is concerned should be “don’t ask, don’t tell”. That the less the public knows, the less they will have to contest. But that attitude is precisely what has contributed over time to the erosion of public support for European construction.
“It is simply not possible to save the eurozone without explaining and making the political case for further integration. It may be that Europeans are fundamentally not ready to take that step. If that is the case then none of this will matter…
“Not just our currency but our position in the world is at stake, our ability to command the attention of investors as well as our capacity to deploy our ‘soft’ continental power.
“If we see one domino fall, others will follow. That’s why we have to fight back. Not against the markets – that’s fool’s talk – but against a decline in our own self-belief, a failure of nerve which, if we are not careful, will engulf Europe with disastrous consequences not just for our economy but for everyone else’s too.”
On Left Foot Forward on Sunday morning, we will have exclusive extracts from the enhanced e-book of Mandelson’s “The Third Man”.
• The Labour party conference kicks off this weekend, with all the talk about how Ed Miliband’s first year has fared, and the challenges ahead.
Ahead of the gathering in Liverpool, in interviews published this morning, Miliband told the New Statesman he’s “ripping up the rule book”, and stressed to Progress Magazine “I’m going to do this my way”.
On Left Foot Forward, meanwhile, Alex Hern looked at Miliband’s first year compared to previous leaders of the opposition, concluding he was “shooting par… no more, no less”.
Hern wrote:
“As he enters his second year, he needs to keep an eye on the qualities marked out by the Fabian Review focus group as most important for a good leader: Integrity, decisiveness, and communication and listening skills. Currently voters rank him well on the first and last of those, while Cameron maintains a daunting lead on the middle two.
“But the broader point to take from all of this is that it is not surprising that people can’t see Ed as a leader yet; with just over a year since he took over, he has simply not had the chance to demonstrate his credentials. Eventually he’ll have had enough chances to behave in a statesmanlike manner, and when that time comes, we can read more into these polls.
“For now, he needs to focus on building a solid base to progress there from.”
And looking ahead, yesterday on Left Foot Forward Will Straw wrote of the need for Miliband and Labour to “understand the trends shaping modern Britain”, themes looked at in more detail in Graeme Cooke’s new IPPR pamphlet ‘Still partying like it’s 1995’ (pdf), which describes how Britain has changed over the last decade-and-a-half, and sets out four broad areas for new thought.
Cooke’s publication also looks at the eleven trends shaping modern Britain, which include:
• The ‘polarising’ of the labour market, with growth in professional and managerial occupations at the top. and lower level service sector employment at the bottom;
• The living standards of working people are stagnating, consistent with findings of groups like the Resolution Foundation; and
• The structures of society of being altered by demographics.
On Left Foot Forward tomorrow morning, we will have a more detailed evaluation of Miliband’s first year, looking in particular at the leader’s message, and the party’s organisation.
• This week it was the turn of the Liberal Democrats, who convened in Birmingham.
Nick Clegg was cheered by the faithful during his speech, the crowd loyally standing to ovation at the end for his “je ne regrette rien” oration, peppered with self-justifying dirge over breaking his pledge on tuition fees, and attacks aplenty on Labour, no doubt to the delight of his Tory masters.
For all the “I agree with myself” self-congratulatory spiel, the speech was worryingly shy on facts, as Daniel Elton pointed out on Left Foot Forward: on cuts being “responsible”, and “in the national interest” deficit; on claiming to have abolished child detention; on his claim that raising the tax threshold would be fair; on the greenness of the “greenest government ever”; and on his claim he’d “keep the NHS safe” – under the Lansley-led health reforms, it is anything but.
Clegg also hit out at Labour’s link to the unions – yet said not a word about the Tory dependence on hedge fund managers, bankers and assorted City types, gave seemingly unfulfillable pledges on social mobility, and recycled some of David Cameron’s old lines, while earlier in the week, during a Q&A, he made further, almost certainly unachievable promises on equality.
As for the lessons we can draw from Lib Dem conference, Will Straw outlined five key pointers from the conference fringe: the Liberal Democrats are surprisingly united; Nick Clegg is safe as leader; the Lib Dems’ strategy is focused on differentiation; they are, however, unable to differentiate themselves on the economy; and the 2015 electoral strategy is unclear.
Next week on Left Foot Forward we will have full coverage of the Labour party conference.
Progressive of the week:
Shadow culture minister Gloria de Piero, who called for Labour to redefine its relationship with the press in the wake of the phone hacking scandal, and to pay less attention to it, keeping newspapers’ influence “in perspective”.
As Left Foot Forward revealed yesterday, de Piero writes in the forthcoming Fabian Review:
“Newspaper circulations are falling, but there has been no similar crisis in TV news. BBC News at One – which is the BBC news bulletin with the lowest number of viewers – is watched by 3.63 million people, around half a million more than the number of people who buy The Sun.
“BBC News at Ten, meanwhile, has an average nightly audience of 6.36 million. ITV’s news bulletins may be less popular but they are still watched by many more people than the print editions of most newspapers can hope to reach: 2.34 million watch the ITV News at Ten, for example.
“More importantly, broadcast news in this country is also far more trusted than newspapers.”
On the collapse of trust in the British press, a collapse stretching back long before hackgate, de Piero adds:
“It is worth looking in some detail at the findings of the autumn 2010 Eurobarometer survey, which is based on regular opinion polls conducted simultaneously in all EU member states… The UK ‘tend to trust’ figure when asked about the press was 18 per cent – the lowest by far of the 27 EU states. Only Greece (27 per cent) came near it. The EU average was 52 per cent.
“When asked the same question about radio, the UK ’tend to trust’ figure of 55 per cent was close to the EU average of 57 per cent. Greece recorded the lowest trust figure in radio of 36 per cent. As with radio, the UK’s TV trust ratings (51 per cent) were very close to the EU average (50 per cent).
“In other words, the reputation of the UK print media does not have far to fall. Perhaps that explains why, despite the Sun’s concerted and vicious attacks on Labour and Gordon Brown in the run up the last election, more than one in four (28 per cent) of Sun readers still voted Labour.
“It is up to national titles to repair their reputations in the eyes of the public. The Leveson Inquiry into press standards will be part of that process and must also be allowed to take its course.”
Regressive of the week:
Head of the Institute of Directors Miles Templeman, who said it would be “daft” to curb executive pay.
As One Society’s Larissa Hansford wrote on Left Foot Forward on Monday:
“It is a sad irony that many of those who argue reducing CEO pay would threaten the economy also insist that raising low pay would do the same.”
With anger growing at the greed, shamelessness and selfishness of the likes of Templeman and the unapologetic feral spivs responsible for our economic downturn, the “Occupy Wall Street” protests that have hit the heart of New York’s financial district could be coming to the City of London, as reported on Left Foot Forward.
The New York protesters say they want reform of “the capitalist political system”, which they say “has been beholden to political machinations of the wealthy well before its founding”, and have called for “election reform”.
Evidence of the week:
Resolution Foundation’s “Snakes and Ladders” report (pdf) which investigated the factors influencing people’s chances of moving up the earnings ladder.
It found:
• Women fared significantly worse than men in the 1990s and 2000s- men were up to 50% more likely to move up the earnings scale, while women were also more likely to move down;
• Part-time workers were up to 90% more likely to move down the scale than full-time workers, and the part-time penalty increased from the 1990s to the 2000s; and
• Those living outside London – in particular those in the North East, North West, East Midlands and South West – were less likely to move up and more likely to move down the pay scale than those in London.
Writing in today’s New Statesman, Resolution Foundation chief executive Gavin Kelly concluded:
“The story on social mobility is not straightforward. Though headlines often tell a simple tale of doom and gloom, the national story is less negative. Yet dig down into the data and dark strands emerge.
“If you want to earn your way up in modern Britain, your chances overall have improved. But not for everyone. It helps if you are a man with a degree, working full-time in London.”
The World Outside Westminster by The Grapevine’s Tom Rouse:
It’s been a mixed week for US politics, with the long awaited and much welcomed scrapping of Don’t Ask Don’t Tell being overshadowed by the state sponsored murder of Troy Davis. A last minute appeal for clemency was ultimately dismissed by the US Supreme Court despite the considerable doubt surrounding his guilt.
No murder weapon or DNA links were ever provided and the prosecution’s case relied on witnesses who have since changed their testimony. Depite this lack of evidence, three delays, international protests and a number of appeals were not enough to prevent the USA from reminding us of her dark side, executing the 42 year-old late Wednesday.
***
The historic repeal of Don’t Ask Don’t Tell, which was a keystone of Barack Obama’s election campaign, has been warmly greeted. Frustration had been mounting amongst the Democratic base over the length of time it was taking, with both the Pentagon and the GOP seemingly reluctant to support the passage of the bill.
Celebrating the overturning of the 18-year-old legislation, Preisdent Obama promised:
“As of today, that will never happen again, as of today, no one needs to hide who they are to serve the country that they love.”
***
An unexpected highlight of President Obama’s recent suggestion the middle and upper classes should pay more to support his jobs programme is the reaction he has drawn from Bill O’Reilly.
The multi-millionaire is so disgusted by the idea of paying his fair share he has hinted he will quit his Fox show if the proposed tax raises are passed. In a week that has seen a majority of Americans blame Obama for the financial crisis for the first time, O’Reilly’s reaction will have provided the White House with a brief smile.
***
Mitt Romney will have enjoyed the last week for very different reasons. The GOP presidential candidate had been struggling to cope in recent weeks with Rick Perry’s sudden insurgence, but recent polling data has shown a noticeable revival in Romney’s fortunes.
Thursday night’s debate showed Perry is not comfortable with the debate format, failing to land any significant blows on Romney, who was able to attack Perry from the start. Gallup Polling comparing Romney, Obama and Perry revealed Romney enjoyed a comfortable lead as a candidate registered voters would consider, with 62% saying they might vote for him, compared to 54% for Obama and 53% for Perry.
This broader appeal was also reflected in recent Suffolk polling of New Hampshire with Romney enjoying a massive 27% lead over Perry.
***
The biggest story of the week comes from the UN, where the Palestinian authority is making a controversial and divisive bid for full statehood. This evening, Palestinian leader Mahmoud Abbas formally submitted his bid for recognition, calling for the Security Council to approve a state within pre-1967 borders.
The proposed resolution has divided opinion across the world with countries lining up to either support or condemn the resolution. The USA has been particularly vocal in its opposition,with Obama threatening to veto despite his support for the Arab Spring.
In the UK, the labour party has thrown its support behind the bid, while David Cameron has yet to commit the government one way or the other, although it is believed the UK would support a resolution which included a clear roadmap for peace talks.
As Sara Ibrahim wrote on Left Foot Forward:
“Palestinians deserve their own state. This can only be obtained if Israel can be satisfied that this new state can peacefully co-exist with Israel. Whilst there are real issues on both sides: security and the right to exist for Israel; refugees and settlements on the other – a permanent solution must be reached.
“Peace will require difficult political decisions to be made. At the UN, Israel, the Palestinians and other voting states in the Security Council must show courage. Without this the cause of moderates on both sides will be lost.”
***
Turning to Europe, Greek citizens took to the streets and a 24-hour public transport and teachers strike took place to protest against new austerity measures being introduced by the Greek government. The finance minister, Evangelos Venizelo has claimed that the austerity programme is completely necessary and that the Greek government would do “anything” to stay in the euro.
Measures being opposed by the Greek public include a lowering in the income tax threshold, pension cuts and further public sector job cuts.
The Greek government is currently entirely reliant on European and IMF loans to avoid default and is failing to meet its own self-imposed targets for spending cuts. Further major strikes are set to follow, with a general strike planned for the October 19th.
Ed Jacobs’s Week Outside Westminster:
Northern Ireland:
It was revealed this week that compensation payments will be offered to those injured and to the families of the men killed on ‘Bloody Sunday’. Left Foot Forward understands there is not yet a finalised plan for calculating amounts or deciding who is eligible, although there is talk of using a points-based system.
Commenting on the news on Left Foot Forward this evening, Kevin Meagher wrote:
“A great deal of good work has been done by successive governments, first in commissioning the Bloody Sunday Inquiry, then in allowing Lord Saville to deliberate as he saw fit, and then, last June, in accepting his report wholesale. The government needs to proceed extremely cautiously in ensuring the trust that has been so assiduously built-up is not forfeited.
“However, compensation amounts, who receives them, and whether anyone is ever charged in connection with the deaths and shootings are issues whose sensitivity remains immune from the passage of time.
“Thirty nine years later, the echoes of that terrible high-veolcity rifle-fire continue to ring out.”
Elsewhere, New figures revealed just 30 out of 600 newly qualified teachers have this year been able to find a job.
Calling for action on the issue, DUP MLA for Lagan Valley, Jonathan Craig, argued:
“Two difficulties are the oversupply of individuals in teaching itself as a career, which is something the department will have to deal with the reality of.
“Secondly, why can’t we put in position a graduate training scheme such as they have tried out in Scotland, where graduates spend a year in a school, which will greatly help their prospects?”
Sinn Fein education minister John O’Dowd, meanwhile, temporarily took the reins as deputy first minister as Martin McGuinness formally began his bid to become President of Ireland.
Pledging to take an average wage if elected, McGuinness argued:
“A number of people in the north who lost loved ones as a result of the actions of the IRA have actually come to me and pledged their support in this campaign.
“That gives me tremendous encouragement because I think they see me as someone who has been at the heart of the Good Friday Agreement, the negotiations that brought about the St Andrews Agreement, the Hillsborough Agreement, and the building of very important relationships with our unionist brothers and sisters.”
Wales:
In a speech in which she launched a scathing attack on Labour’s education policies in Wales, the leader of the Lib Dems at Cardiff Bay, Kristy Williams, used her speech to the party faithful in Birmingham to outline the lessons the party needed to learn from Plaid Cymru’s time in coalition government.
She argued:
“The smaller party in government has to be able to show it has made a difference. Not just on issues of concern to their core supporters but across government, and in particular on those issues that matter most to voters.”
Meanwhile, during a debate in the Assembly on the future of maternity services in Wales, Conservative AM Antoinette Sandbach broke down in tears as she told of how she lost her five-day-old son in 2009.
In a moving speech she explained:
“I had to wait for over 30 minutes and do mouth-to-mouth resuscitation and heart massage on my baby before an ambulance arrived. I had to sit in the ambulance while it took 30 minutes to get to hospital.
“At that stage, that critical hour had passed, and I don’t want any other mother in Wales to have to go through what I went through.”
Scotland:
The former Lib Dem leader in Scotland, Tavish Scott, used a series of articles to outline his concerns about the coalition that was formed in Westminster.
Concluding that the decision by Vince Cable to increase the upper limit for tuition fees had dragged the party in Scotland into the “political gutter”, he continued:
“My parliamentary group in Edinburgh were deeply unhappy about the London coalition. Especially those who had been in the Lib Dem/Labour coalition as ministers.”
Finance secretary John Swinney, meanwhile, outlined a spending review designed to give a boost to capital spending to jump start the economy, unions threatened public sector strikes over the winter.
Scottish TUC General Secretary Grahame Smith responded:
“The big minus is Mr Swinney’s treatment of public service workers. Having criticised the UK government for combining a pay freeze with a pension contributions cash-grab, Mr Swinney has proceeded to take the same path in Scotland.
“And having praised public service workers yesterday for achieving £2.2 billion in ‘efficiency savings’, he has today imposed a similar requirement for the coming period but offered nothing in return.
“This approach is not only unfair, it will exert a significant drag on an already weak economy.”
This week’s most read:
1. Vote in Left Foot Forward’s most influential left-wing thinker of the year 2010/11 – Daniel Elton
2. Irish Presidential elections: Martin McGuinness to stand, but can he win? – Ed Jacobs
3. The Daily Mail’s poisonous lies must be fought by all trade unionists – Rick Coyle, Unite
4. Are “Occupy Threadneedle Street” protests on the way? – Shamik Das
5. Yet another nasty in the welfare bill: Means testing support for the disabled-since-youth – Declan Gaffney
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