Eurozone crisis – it just got personal

Until now, the Eurozone crisis for me has been a vague, distant phenomenon. I would turn on my TV to see mass protests in Athens, numerous summits between EU leaders and hear abstract talk of financial markets and rising yields on Greek government bonds.

Yes, there was a crisis going on, but it was all comfortably remote and happening in slow motion. Whilst I could feel sympathy for the austerity-stricken Greeks, I struggled to appreciate why this crisis really mattered. What was all the fuss about? How did any of this affect the average person in the street? Ultimately, who cares?

Well now I know. At a personal level, this crisis now has a human face.

Meet Enrique. He lives in Algeciras in southern Spain, the largest city in the Bay of Gibraltar. He’s my Grandpa. This week he discovered that the municipal tax on his house has increased by 50%. He fears that taxes on rubbish collection will also rise. ‘The crisis is reaching people with low incomes’, he tells me. Enrique also saw the value of his savings dive as the share price of Santander Bank fell, a consequence of growing uncertainty over the safety of Spanish banks.

In other words, he’s getting poorer. And at root, this is the tragedy of the crisis in the eurozone. Citizens of European countries, and it’s beginning to happen in Britain too, are having to pay higher taxes and endure lower living standards so that their governments can begin to pay off their debts. It’s pretty simple: governments are choosing to spend less and tax more to try to appease bond markets that take fright at the first signs of economic mismanagement.

Things look particularly bad for Spain because their fourth-biggest bank, Bankia, is asking for a €19 billion bailout from the Spanish government. Bankia’s balance sheet is weighed down with toxic debts following Spain’s burst property bubble in 2008. Spain’s bailout fund isn’t yet big enough to save Bankia, so it will have to go to the financial markets to borrow the rest. But with investors demanding interest rates of almost 7% for holding Spanish government bonds, the cost of this bailout is looking eye-wateringly high.

Indeed, it was borrowing costs of 7% that forced both Ireland and Portgual to go cap in hand to the International Monetary Fund to seek bailouts in the past. There’s now a real chance that Spain could be next.

And whilst these question marks hang over Spain’s financial credibility, investors will continue to withdraw capital from the country. A record 66.4 billion euros was moved out of Spain in March alone. This lack of confidence means further falling share prices for banks like Santander and further troubles for people like my Grandpa.

So what is to be done? How to end this seemingly never-ending crisis? In general terms, the answers to saving the euro would seem to lie in the following: greater fiscal integration, a degree of debt mutualisation and the political will to stomach long periods of depressed living standards.

On the point of fiscal integration, the euro zone area needs to start acting like a single country with a centralized approach to taxation and spending. Different countries with different economies pursuing different tax and spend policies but united by a single currency was an idea doomed to failure. Europe needs to become more federal. Getting voters across the continent to agree to this is another matter, but it has to be done.

Meanwhile, richer euro zone countries like Germany need to be prepared to stand behind the debts of the likes of Spain and Greece. The German people may not like it but it’s the price they’ll have to pay for saving the single currency. And they should see that it’s a price worth paying given that the success of the German manufacturing industry is in large built upon the favourable price of the euro relative to other currencies. If they were forced to revert to a strong deutschmark, their exports would most likely slump. So Angela Merkel needs to concede ground and accept some form of debt mutualisation.

Will any of this actually happen? Based on past form, you’d say not. But Spain’s problems have given the crisis a new momentum. If the euro is going to be fixed, it’s going to have to happen sooner rather than later.

But whatever happens next, this is now personal. It was previously easy to overlook the fact that this crisis touches real people with real plans and real interests. Spain’s troubles, however, and my Grandpa’s in particular, have changed that. This crisis really does hurt the person in the street.

And in this globalized 21st century, a butterfly flapping its wings in Madrid stands to create an economic hurricane the world over. Britain is very much in the firing line. Unless Europe’s leaders act quickly to implement a lasting solution to the continent’s problems, the human cost is only going to get worse.

Published in The Bubble, Durham’s online student magazine – 5th June 2012

http://www.thebubble.org.uk/politics/eurozone-crisis-it-just-got-personal#!page=2

Some prisoners should be given the vote – let’s get nuanced!

Matt Williams’ article on votes for prisoners is worth reading: he gives a concise yet thorough discussion of the complexities of the issue and offers a strong case for denying prisoners the vote. I would, however, like to offer a response to his article.

As a starting point, we should note there are two key questions at the heart of his discussion and it’s important to keep them separate. The first question is ‘Should prisoners be able to vote?’ The second question is ‘Should the European Court of Human Rights be able to answer that question on Britain’s behalf?’

On that second question, Matt says ‘the ultimate decision [on votes for prisoners] must be left to the national government otherwise sovereignty is threatened.’ I wholly agree. Parliament ought to remain as the supreme law-making authority of the land. Parliament’s accountability to the British people at the ballot box ensures that the laws it creates reflect the public will.

We also already have our own British judicial system to ensure that Parliament doesn’t act outside of its powers or infringe civil liberties. We shouldn’t have to face interference from European judges and we ought to remove our commitment to the European Convention on Human Rights and adopt our own British Bill of Rights.

But it is on the first question – votes for prisoners – where I disagree with Matt. Some prisoners should indeed be able to vote, namely those on short sentences or who are soon to leave prison.

Let me begin by saying that I will not use the traditional arguments often used to support votes for prisoners, such as the denial of the vote allegedly harming rehabilitation or undermining human dignity. Frankly, I find these unconvincing. Most prisoners don’t care about voting and in addition, rehabilitation comes from things like education and skills training, not voting.

Instead, denying all prisoners the vote violates a more fundamental democratic principle. This principle is that all citizens who must abide by the laws of the land reserve the right to vote for the members of the legislature who create those laws. This principle is fundamental because it preserves our own freedom. We may have to obey laws that restrict free action but since we’ve been able to vote for the people that create these laws then they are in a sense self-imposed and hence compatible with our freedom.

The problem with banning all prisoners from voting is that you violate this principle. Let me demonstrate with an example. Imagine Person X. He is given a 6-month custodial sentence in January 2010 for repeat minor offending. He is unable to vote in the May 2010 general election and is then released from prison in July 2010. For the next four or five years he must obey laws made by people he wasn’t able to vote for, just because he happened to be in prison at the time of the general election. In my view, this means that the deprivation of his freedom extends beyond his prison sentence.

In his article, Matt justifies this deprivation by saying that it ‘makes no sense for those who break, ignore and abuse the law to have any influence over those who make the law’. However, the problem with this view is that you deny the prisoner the ability to influence the law for a long time after they’ve left prison, namely, until the next election.

This is the wrong approach; a prisoner should be able to vote in an election if they’re going to have to live for a significant period of time in a society governed by laws created by politicians elected in the prisoner’s missed election.

Let’s take another example to further demonstrate my position. Imagine Person Y. She is given a 20-year custodial sentence in January 2010 for murder. I believe that Person Y should not be allowed to vote for the next fifteen years because they’re not going to be living in society for the next fifteen years. But they should be allowed to vote towards the end of their imprisonment because they will soon be coming out of prison and having to abide by the laws of society.

Hence I take issue with Matt’s statement that ‘you cannot have a system which gives the vote to some prisoners and not others. [It] has to be either all or none’. To this I say, ‘Why not?’ Why not have a system where prisoners on short sentences or who are soon to leave prison can vote? And where prisoners on longer sentences can’t vote, at least not until near the end of their imprisonment?

Similar to other European countries, judges should be able to follow appropriate guidelines and use their discretion in deciding which prisoners can vote and which can’t. It doesn’t have to be all or none.

Prisoners ultimately have to rejoin society, a society governed by laws voted upon by elected representatives in the legislature. If we are to respect one of our fundamental democratic principles then prisoners should be able to vote on these elected representatives since they will live under their laws.

If this is denied to a prisoner then the democratic principle is violated and the deprivation of the prisoner’s freedom is extended beyond their time in prison. For me, that’s unacceptable. Hence you’ve got to give some prisoners the vote.

Published in Palatinate, Official Durham Student Newspaper – 16th June 2012

http://www.palatinate.org.uk/?p=24244