Calais crisis: Screw British holidaymakers. What about the real victims?

Frazzled British holidaymakers “desperately” trying to reach France for your annual sojourn, have no fear! Café Rouge in Canterbury is here. The chain is offering those stuck in Operation Stack on the M20 a free tea and slice of cake if they happen to be diverted towards Canterbury – you know because of all that unfortunate nonsense going on at Calais. Little ones eat free! And if the family phone still has battery after hours of “hell” on the motorway, you can tweet about the experience using the special hashtag #RouteRouge.

Pass the sick bucket.

I’m not making this up. And while I do have sympathy for anyone stuck in the traffic jam that’s cost UK industry millions, I’m reserving my compassion for a group who really could murder a slice of cake.

Just 21 miles from Britain there is a jungle. Or to give it its full name: Jungle Camp. This is where hundreds of displaced people from all over the world live in some of the most wretched conditions. Stuck in a no-man’s land in Calais, they are living in temporary cardboard structures and surviving on porridge made out of milk and soggy bread. Not that you will probably have paid them much attention over the last week.

 The “Calais crisis” as it’s being referred to, is mostly being reported as a transport or business story. Actually, it’s a humanitarian timebomb. On Tuesday, one man died trying to get through the Channel Tunnel. We don’t know his name. He is the ninth this summer.

Among all the discussion of “secure fencing” and “delayed journeys”, our human compassion has deserted us. We have it in spades when we are reminded of suffering that doesn’t interfere with our holidays or freight:remember the collective horror earlier this year when desperate migrants had to be saved by gunboats in the Mediterranean? Where is it now?

Even the language that’s being used to describe the mostly male Eritreans, Ethiopians, Afghans and Sudanese trying to live in Europe is mechanical at best, and dehumanising at worst. Emergency government meetings are being held to ensure there is “upstream management of illegal migratory flows”. Excuse me? These are real people, with hearts, families and lest we forget it, human rights. What if they were children instead of young men? Would we feel differently?

Moreover, we have very little idea if they are asylum seekers or economic migrants – because guess what? No one is engaging with them. Even a brilliant and emotional BBC Newsnight film filmed inside Jungle Campfailed to achieve full clarity when speaking to inmates.

We must also face the facts. The UK isn’t a soft touch when it comes to “letting everyone and anyone in”. According to the UN Refugee Agency, at the end of 2014, the population of refugees, pending asylum cases and stateless people made up just 0.24 per cent of the UK population. That’s 117,161 refugees, 36,383 pending asylum cases and 16 stateless people.We take fewer asylum seekers than many other countries. Turkey has the highest number at 1.6m, followed by Pakistan at 1.5m.

This country has a proud history when it comes to taking in the needy. Let’s not let ourselves down because we’re impatient for a holiday or a booze cruise. It’s time to see the bigger picture and stop the lamentable narrowing of our horizons. An island nation we might be, but that doesn’t have to mean our mentality must follow suit.

Greece crisis: The Troika’s inflexibility on austerity amounts to nothing short of an attempted coup

Behind this week’s headlines on Greece – of an economy in meltdown, of stock market losses and British holidaymakers having to hoard Euros before jetting off to Corfu – lies a country besieged by tragedy. People in Greece are suffering. Over 40 per cent of children are living in poverty, up from 23 per cent in 2008. A quarter of the workforce is unemployed and over half of young people don’t have a job.

This human tragedy, inflicted so deliberately on the Greek people, is compounded by the resounding failure of austerity in economic terms. The Troika’s plan – of enforced cuts to the Greek state- has seen Greece’s Government debt to GDP ratio go from 133 per cent in 2010 to 174 per cent today. Since 2010 the Troika has lent €252 billion to the Greek government. Of this, the vast majority of the money was used to bailout banks, pay off the private sector to accept restructuring, and repay old debts and interest from reckless lending. Less than 10 per cent of the money has actually reached the people who need it most.

The Troika’s intransigence on austerity amounts to nothing short of an attempted coup. A democratically elected Government is being backed in a corner by the servants of capital who are desperate to embarrass the Greek electorate for daring to question austerity. For those of us who believe in the EU as a body which should uphold human rights and value solidarity, this bullying is particularly repulsive.

You might be forgiven for believing that there is no alternative to further austerity in Greece. But, as history shows us, countries can escape crippling debt in a just way. In 1953, at a summit called The London Conference, Greece was among the European nations signing a deal which allowed for the cancellation of German debt, to enable the country to rebuild after the destruction of the Second World War. It’s now time for European countries to come together again and allow Greece to cancel debts, and begin the process of stabilisation. Indeed, it’s just been revealed that even the IMF is now saying debt relief must be part of any package to rescue Greece.

Sunday’s referendum gives Greek people a choice – but it also places them at the barrel of a gun. Say ‘yes’ to the deal and the remaining social security net will be ripped from them, but a ‘no’ risks bringing the forces of darkness to the door, further punishing Greek resistance by cutting off the country from the support it so desperately needs. A clear No vote, as the Syriza government is urging, would at least mean that the Troika might have to reconsider its plans.

If this was a natural disaster we’d be doing all we could to assist Greeks in their time of need. But, because solutions to this economic disaster fly in the face of our Government’s obsession with stripping down the state, no help is at hand.

No self-respecting democratic can stand by and watch while the Troika dishes out further pain to the Greek people, who are paying the price for a crisis that wasn’t of their making. The Greeks have joined together in these harsh times – setting up health clinics and food banks to support their neighbours – but there’s only so much more that the already crumbling safety net can take before it entirely collapses. If the leaders of European countries really do care about the human suffering in Greece then they’ll cast a failed ideology aside and work for a credible solution to the country’s crisis.

Caroline Lucas: We need to invest in a positive, green and socially just future…

Next week the Conservatives will present their first Budget as a majority Government.

The context is grim.

Progress on child poverty, surely a bellwether for good government, has stalled – with one in six children living in poverty. And when we consider how the Government is doing when it comes to keeping children warm in their homes, things look just as bad.  Last year, 2.23 million children in England were living in fuel poverty, whilst an estimated 65 people a day die in the UK in winter as a result of illnesses due to cold homes.

Added to these shocking figures is the fact that so-called improvement in our economy remains extraordinarily skewed towards London and the South East, with Government figures showing that almost 40% of the UK’s economic activity is happening in just those two regions. The jobs that have been created in recent times are, all too often, short term and insecure.

Some parts of the forthcoming Budget, like the £12 billion cuts to social security spending, we already know about. The other announcements, which will trickle out over the next few days, will no doubt also serve to lock the country into further austerity and bring our public services ever closer to breaking point.

Ministers know that alternatives do exist.

One such alternative offers a route to rebuilding our economy, tackling climate change, and providing decent long terms jobs in every city, town and village across the UK.

It’s known as Green Infrastructure Quantitative Easing (GIQE), a concept first proposed by the Green New Deal Group and an idea that, if you can get past its unappealing name, basically means investment in a positive green and socially just future.

GIQE could contribute to strengthening the UK economy via a carefully costed, nationwide programme to train and employ a ‘carbon army’. This army would be at the frontline of the fight against cold homes by making all of the UK’s 30 million buildings energy efficient, and, where feasible, fitted with solar panels. This would, in the first instance, dramatically reduce energy bills and fuel poverty, whilst also cutting greenhouse gas emission and cutting current dependence on imported energy.

Secondly, a GIQE programme could also help tackle the housing crisis by financing the construction of new affordable housing that’s highly energy efficient and built predominantly on brownfield sites.

Thirdly, GIQE could help finance improved regional public transport networks to help revitalise local and regional economies. That’s more and better buses, trains and coaches, helping people to get around their communities and stay connected.

Quantitative Easing is already back on the global economic and political agenda. The growing threat of deflation has meant that Japan has reintroduced QE, and the European Central Bank has begun its own programme to deal with the serious economic problems of the Eurozone.

Here in the UK, our export markets face global threats that include a slowdown in the US and Chinese economies plus the financial fragility of the Eurozone – compounded only this week by the ongoing crisis in Greece.

Moreover, domestic economic difficulties, including inadequate tax revenues, a deficit that is likely to prove to be stubbornly high and the spectre of deflation – none of which are encouraging consumers to spend or business to invest- mean the time is ripe for a new round of QE.

The scope of the GIQE energy efficiency initiative would be huge – and ambitious: There are around 28 million dwellings and 2 million commercial and public sector buildings in the UK. But we should be ambitious – on behalf of the unemployed who needs jobs, the families who need affordable housing and the climate that needs our protection.  It has been estimated that nearly £500bn of investment in new low-carbon infrastructure is required over the next 10 years, of which £230bn will be required for energy efficiency alone. A ‘Green Infrastructure QE’ programme would likely cost £50 billion a year over the next ten years.

To put this into context, between 2009 and 2012 the Bank of England e-printed £375 billion of conventional QE, at an average of £125 billion per year.

This was the equivalent of over £6,000 for every man woman and child in the UK. Yet this considerable sum of money mostly benefited the banks and investors by inflating house prices, the stock market and commodities. It had very little impact in terms of generating real economic activity on the ground or delivering concrete social and environmental benefits. Green QE is designed to achieve far more – targeted far more effectively.

The actual mechanism is relatively straightforward. The Bank of England would e- print tens of billions of pounds annually, as it did during the last round of QE, and a considerably enlarged publicly owned Green Investment Bank (GIB) would issue investment bonds to be bought by this QE programme. This would effectively leave the money required to fund green investment both debt and interest free, in the hands of the Green Investment Bank (GIB), to be invested over a realistic time scales and so be non-inflationary.

Mark Carney, the Governor of the Bank of England, is on record in a letter to me saying that, if the government requested it, a next round of QE could be used to buy assets other than government debt – thus clearing the way for the kind of ambitious green infrastructure programme we urgently need.

Since QE involves the central bank putting new money into circulation, by creating e-money and using it to buy assets, this programme will not increase the UK’s repayable debt levels. Professor Werner, Director of the Centre for Banking, Finance and Sustainable Development at the University of Southampton, and the creator of the quantitative easing concept, explains that since the central bank can simply keep the assets on its balance sheet, there is no need for taxpayers to repay this debt or for it to be considered as an expansion of public debt.

Indeed, this is completely consistent with the most recent UK quantitative easing programme. This saw the Bank of England, which is owned by the UK government, buy UK government debt in the form of gilts. The net result is that one arm of the government ends up owing debt to another arm of the government. If accounted for like a commercial enterprise this debt would, as a result, show as cancelled because you cannot, of course, owe yourself money. This is precisely why George Osborne could cancel the interest payments on the £375 billion of gilts held under his previous quantitative easing programme.

In the case of GIQE, bonds issued by the Green Investment Bank will never need to be repaid. This means that the GIB will in turn not need to demand repayment of the loans they grant to local authorities and others to fund green investment.

One further and crucial benefit of GIQE is that it would increase the tax by increasing the number of people in well-paid employment in the UK. This in turn would have benefits for deficit reduction, contributing to that all important confidence that’s needed to unlock additional private funding from pension and insurance companies, through to individual savers.

Taken together, this all adds up to providing the scale of long term investment required to create the sustainable economy the UK needs. GIQE could achieve all this and it would do so while benefitting every single part of the UK.

GIQE is ambitious, because it has to be. The status quo – of an economy that fails to lift children out of poverty and sees older people die in their homes because of the cold – is a resounding failure.

It’s not just the Government who should look closely at the significant benefits of Green Infrastructure QE. The Labour Party, so short of fresh thinking in recent years, should be closely examining this proposal too. Labour leadership candidates must answer a simple question: if not this, then what? We need a plan to create jobs in every constituency across Britain – I hope those candidates will join me in making the argument for a fairer, greener economy fit to serve all of us for years to come.

Britain needs more decent jobs. We need a credible plan of action on climate change. We need bold action to tackle the housing crisis. It’s time that both the Government and the Opposition, rather than continuing to hand money over to the banks as they have done since the financial crisis, will seriously consider this plan to build a resilient economy, protect our shared environment and create thousands of new well paid jobs.

Mark Blyth: Austerity – The History of a Dangerous Idea

Governments today in both Europe and the United States have succeeded in casting government spending as reckless wastefulness that has made the economy worse. In contrast, they have advanced a policy of draconian budget cuts–austerity–to solve the financial crisis. We are told that we have all lived beyond our means and now need to tighten our belts. This view conveniently forgets where all that debt came from. Not from an orgy of government spending, but as the direct result of bailing out, recapitalizing, and adding liquidity to the broken banking system. Through these actions private debt was rechristened as government debt, while those responsible for generating it walked away scot free, placing the blame on the state, and the burden on the taxpayer.

That burden now takes the form of a global turn to austerity, the policy of reducing domestic wages and prices to restore competitiveness and balance the budget. The problem, according to political economist Mark Blyth, is that austerity is a very dangerous idea.

First of all, it doesn’t work. As the past four years and countless historical examples from the last 100 years show, while it makes sense for any one state to try and cut its way to growth, it simply cannot work when all states try it simultaneously: all we do is shrink the economy.

In the worst case, austerity policies worsened the Great Depression and created the conditions for seizures of power by the forces responsible for the Second World War: the Nazis and the Japanese military establishment. As Blyth amply demonstrates, the arguments for austerity are tenuous and the evidence thin.

Rather than expanding growth and opportunity, the repeated revival of this dead economic idea has almost always led to low growth along with increases in wealth and income inequality. Austerity demolishes the conventional wisdom, marshaling an army of facts to demand that we recognize austerity for what it is, and what it costs us.

About the Author: Mark Blyth is a faculty fellow at the Watson Institute, professor of international political economy in Brown’s Political Science Department, and director of the University’s undergraduate programs in development studies and international relations.

He is the author of Great Transformations: Economic Ideas and Institutional Change in the Twentieth Century; editor of The Routledge Handbook of International Political Economy: IPE as a Global Conversation, which surveys different schools of IPE around the globe; and co-editor of a volume on constructivist theory and political economy titled Constructing the International Economy. He is working on a new book that questions the political and economic sustainability of liberal democracies, called The End of the Liberal World?

Blyth is a member of the Warwick Commission on International Financial Reform. He is a member of the editorial board of the Review of International Political Economy, and his articles have appeared in journals such as the American Political Science Review, Perspectives on Politics, Comparative Politics, and World Politics.

He has a PhD in political science from Columbia University and taught at Johns Hopkins University from 1997 to 2009.

This talk was hosted by Boris Debic on behalf of Authors@Google in 2013

IMF agrees $833mn emergency loan to Iraq

The International Monetary Fund (IMF) says it plans to provide Iraq with an emergency financial assistance of $833 million. 

The IMF has announced in a statement that the emergency loan will be meant to help Iraq with its war on ISIL terrorists as well as the effects of the low oil prices. It has further added that its Executive Board will meet to approve the initiative in July.

“The Fund is ready to assist Iraq in its efforts to tackle the economic impact of the conflict with ISIL and the decline in global oil prices,” the IMF said in its statement.

It further emphasized that the Iraqi economy contracted 2.1% in 2014 “mainly because of the violence”, and might grow only 0.5% this year. Also, weak oil revenues, the Fund added in its statement, are expected to increase Iraq’s budget deficit and decrease its foreign assets.

“We welcome the steps taken by the authorities to address these urgent challenges and support their request for IMF emergency assistance.

Iraq’s 2015 budget called for roughly $102 billion in spending, to be financed by $67 billion in oil revenues, $13 billions in customs and other tax revenues, and $22 billions in debt.

However, the IMF has warned in its statement that Iraq’s budget deficit is serious.

“Mainly because of the violence, the economy has contracted by 2.1 percent in 2014 and is projected to achieve only a modest recovery of 0.5 percent this year, despite solid growth in the oil sector,” the Fund said in its statement that was released on Friday.

“With low oil prices, export revenues have contracted, pushing the current account into a deficit expected to reach 8 percent of GDP in 2015. As a result, foreign assets have declined in 2014 to US$67 billion and are projected to fall further this year”.

deficit expected to reach 8 percent of GDP in 2015. As a result, foreign assets have declined in 2014 to US$67 billion and are projected to fall further this year”.