Blog 2023 Malcolm Blair-Robinson

Like chickens in a pen with a wolf circling around them, the markets are uneasy. They crash and recover day after day. Their problem is that the wolf, ie the problems with the managementof the Euro, will not go away.

Now everyone, including the British Government, thinks that there has to be central management of the currency if it is to survive. This means economic policy for all its members decided by one authority, sovereign over the individual states, at least in matters of money. There is no structure in place, nor is there a mandate to put one together. None of this has been thought through, neither would any electorate in Europe give up the sovereignty to allow such a fundamental change to take place. Thus we are back to the impossibility of having a currency without a government.

There have been meetings and handshakes a plenty and ringing declarations of intent, but nothing has actually happened. Meanwhile Italy’s austerity package is unravelling, like a ball of wool from an uncertain hand. First the tax on the better off went and now the entire country is at a halt because the unions have called a strike. The nature of Italy’s government, even the nature of Italy, offers no hope that fiscal discipline will triumph or that voters will concur.

Matters are made worse by the leaking news at the weekend that many of Europe’s banks could not stand a sovereign default or even a re-structure. This means they are bust already, because no way will these rampaging borrowings be paid off without significant modification. Bankers have behaved with such arrogance and greed, that it is doubtful whether anygoverment in Europe has  the backing of its voters to bail them out, without outright nationalisation.

There is no clear answer to any of this. No wonder the markets are nervous. The wolf continues to prowl.

As the politicians return from, sometimes interrupted, holidays and Parliament reassembles, it is worth looking at the general dynamic of the Westminster Village.

Before the break it was wall to wall Murdoch, then the riots. Now it will be Libya, eduction, health and the banks. Labour, comfortably in the lead on all the polls before, is still in the lead but only just. Some polls put them neck and neck with the Tories. Cameron looks a good deal stronger, having done well in the riots and over Libya, which is turning out better than feared. Milliband looks weaker. He has good moments and often says things that strike a chord with the majority, but nobody, yes nobody, can imagine him as prime minister. Fortunately there are none in his shadow cabinet who looks even vaguely like a national leader, so for the moment he is safe. 

Clegg pops up here and there, but lacks an issue with which people identify, or identify him with. His great project was constitutional reform. The car crash of the AV Yes vote has left him still in the ditch.

Vince, on the other hand, having been vindicated by the fall of the Murdochs from his indiscretions with fake girlie constituents, is again on the up. He thinks we should act NOW on the banks. Everybody in the country except Osborne and Cameron (and the bankers) agrees with him. He knows that the banker’s lobby is talking absolute balderdash. He points out we need sound banks above everything upon which to build a sound economy. An over leant country cannot renew itself by more borrowing, so now is the best time for the banks to come up with the cash to put their houses in order. When the report of the IBC is formally published in a few days, you can be sure to see Vince everywhere on the media.

The dangers ahead for the government are that while it is commendably firm on cutting, it is fumbling about stimulating growth in a way which does not involve more borrowing. If it compromises too much on its NHS reforms they will not work, then everyone will be angry. If the free schools have teething problems the opposition will have an easy ride. If Libya suddenly goes wrong, which now looks unlikely, this could dent Cameron. If Coulson suddenly proves Cameron was told everything from the very beginning, this would be curtains for the PM, but this looks very unlikely. Generally speaking, when all is taken into account, the Tories have the wind in their sails and the Lib Dems, with the banks, have a populist cause to champion.

Now for Labour. Here things do not look good. Balls is increasingly seen as not up to the job of shadow chancellor with his simplistic view of economics. Darling’s book is damaging and will be very damaging to Brown allies still in government. Ed Milliband is getting weaker. The more we get to learn  about Labour in office, the less good it looks. Rendition to Gaddafi for torture, of terror suspects on its watch, could be a calamity. So might the publication of the Chilcot Enquiry.

Events, we are always told in politics, are the key. Who can tell what is coming down the track? Those with their ear to the line tell me that financial crisis in the Euro-zone and in the US maybe the issues for the autumn which will eclipse the others. This may help Labour more than the government, if it happens. It will happen sooner or later.

The summit in Paris meets in much more favourable circumstances than might have seemed likely not long ago. The Gaddafi regime is over for sure. What replaces it is not clear, but it is clear that the Libyan people are united in wanting to rebuild their country and install freedom at its core. The NTC shows itself to be, in very difficult circumstances, an efficient and fair administrator where it is organised. The Libyan people themselves are showing resource and ingenuity where it is not.

To convert all this into a functioning democracy operating with a broad consensus and a national dynamic is a tough road, but by no means impossible; indeed most can see the way ahead. Meanwhile the restoration of services, facilities and the wherewithal of daily life are critical to the maintenance of this momentum. Also critical is the establishment of law and order by a recognised authority enjoying public trust, in the form of some sort of police. At present armed civilians are doing this in Tripoli neighborhood by neighberhood; fine in the short term but with the potential for disaster. Almost the whole population appears to be armed and well supplied with ammunition.

All is not over in the war. The battle for Sirte is not won. There are said to be pockets of loyalists in the south. Too much is being made of whether Gaddafi is caught or not. He is already history for Libya. His machine, his family’s control of the levers of power, his mystique as a revolutionary leader, his military and his assets are all gone. Sooner or later he will turn up somewhere and when he does it will make a lot of news but little difference. If he is taken alive, his chances of asylum in some quitet oasis of retirement have diminished or entirely gone, as a consequence of the grim and terrible discoveries of the atrocities of his forces and the poignant list, tens of thousands long, of those of his citizens who have disappeared without trace.

The Paris summit must address these many priorities. The military action appears to be drawing to a successful conclusion; a welcome alternative to the failures of recent years.  A stable, democratic, prosperous and free Libya is not here yet. A failure of planning , policy or will at this critical moment would mean that it never will be. Because of the brightening prospect, the stakes too are raised. The international community must raise its game to meet the challenge. The Libyan people have shown they deserve our best efforts.