14th June 2012
The FT’s Lionel Barber has this very interesting article from The Man, in Jerusalem –
Tony Blair has delivered a stark warning of a popular backlash against austerity policies in the euro-zone ahead of this Sunday’s re-run election in Greece.
“You look at what the Greeks are being asked to accept: it’s beyond tough,” Mr Blair said in an interview with the Financial Times in Jerusalem.
The former long-standing UK prime minister, a self-professed pro-European, said the risk of unrest applied to Europe as a whole. “In the end, what people will ask is: ‘Is the single currency worth it if that’s what we’re being asked to accept’.”
Mr Blair’s said the remedy should be a “grand bargain” between Germany and the rest of Europe to rescue the single currency. This would involve a pooling of European debt and a new push for growth, matched by deficit reduction through pension and welfare reforms.
He added that the euro would survive in some form even if the present 17-member set-up collapsed. The euro was central to Europe’s ambitions to be a power on the world stage: “I have no doubt that the single currency makes sense.”
Mr Blair steered clear of directly endorsing a European-wide banking union, as proposed by José Manuel Barroso, European commission president. But he made clear that Britain had to play an active role in negotiations on the next phase of European integration, even though he refuse to say whether this would involve a referendum.
“I am not going to criticise the prime minister…But If Britain were absent, we would be opting out of an incredibly important decision. The important thing is this: Britain has got to put itself in a position where it can play a part in what will be a reconstruction of Europe.”
Mr Blair’s proposals will cause unease in the UK coalition government where Conservatives are loath to sign up to an economic union. The government says it is opposed to making British taxpayers liable for recapitalising eurozone banks or putting major British banks under the watch of an EU authority.
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