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With crisis seemingly averted for now, Europe’s leaders need to explain the issues better

Posted on 27 October 2011 | 8:10am

The mood music out of the eurozone crisis summit was pretty good, the reactions not bad, and so the sense is of disaster averted.
The problem is that further difficult steps now have to be taken, and what happens when they are is far from certain. Europe’s leaders have laid down what should happen, but it doesn’t automatically follow that it will.
So the road ahead remains rocky, and a lot can still go wrong. Leaders also need to do a better job of explaining what is actually happening.
When a crisis like this develops, the political and media class alike make enormous assumptions about the knowledge of the general public. The sums involved are huge, and once we are into talking about trillions, they tend to fly over many heads.
I can remember early on in our time in government briefing the media, both during the Asian economic crisis, and the Russian crisis, and thinking to myself as I did so ‘I don’t understand some of what I’m saying, the journalists don’t want to admit that they don’t understand, and thank heavens that clever chap from the Treasury is here to help me.’
Country by country, issue by issue, leaders should be engaged in some very nuts and bolts communications about what is actually happening and what it means.
In the case of the UK, that means a TV broadcast by PM or Chancellor, with some good old-fashioned graphics, and some nice simple explanations for default, bank recapitalization, bondholder, and all these other words that are central to the crisis.
There you go George, time to show you can connect with Mr and Mrs Normal, who understand their own finances but are currently being asked to take on trust the understanding of Europe’s leaders who have thus far done a pretty poor job at crisis management and crisis explanation.

  • Mike

    The Euro-phones seem to get all the airtim. The debate needs to be reshaped such that EU membership is not seen to a negative. We need to hear more about how the EU cleaned up UK seas of sewage, protected our drinking water and wildlife habitats, ensured that goods sold are safe, stopped tobacco advertising, protected health from hazardous substances, improved energy efficiency. Which if these things would the Europhobes like to reverse?

  • Tim Odriscoll

    Very honest. Perhaps the BBC could show the excellent Inside Job documentary as a start.

  • Exactly right AC – some plain-speaking and good explanations are called for but if I hear or read those words: do what is right, I will scream. It is all we ever hear from the LibCons – as though the whole world’s troubles can be filtered down to doing what is right…natural disaster, disease and dis-ease, these are not necessarily anyone’s ‘fault’.

    Plain-speaking should be garnered with love and compassion…GO is going to need the ultimate make-over to achieve that.

  • John_65536

    You want our leaders to act as teachers? Now there’s an interesting concept. Epetition time methinks. If you can’t teach it to the man in the street, you can’t legislate it!

  • George

    Have a read of this, hopefully it will explain just why so many people want more accountability than the EU is prepared to give:
    http://www.openeurope.org.uk/research/top100waste.pdf

    This is not to say everything about the EU is bad but if needs to clean itself up too.

  • Whatifwhatif

    I don’t think I would like the explanations to come from Cam or Osbo, they’re too far up each other’s armpit. 

    Osbo is bound to make out that if it’s a positive situation it was Cam’s influence that made it so (as if the Euro members and especially Germany didn’t already realise that sacrifices had to be made for their collective sakes).

    Tim Harford (sp?) – undercover economist of the FT is always entertaining and informative.  Let’s get him on the box pdq.

    I wouldn’t mind knowing what the heck the IMF were up to when Euro parities were being collected / compared and who was bothering about the reliability of nation members’ tax takes (esp those of most of southern Europe).

  • Robert

    Yes – dulce et decorum est – and all that.

    I am enjoying Steve Bell’s take on “24 hours to save the Euro” coming from William Hague. Now GO, too, raising a wry smile.

  • MicheleB

    One must empathise with types that just cannot comprehend ‘normal’ life.  I feel shame every time I think about nagging my Mum to go to better caffs when she was out at lunchtime.  Had I realised the difference that a few pence could make re the price of a cuppa I wouldn’t have presumed she was saving it instead for her Park Drives or Woodies!

    I’ve posted before about an experiment that Brian Hayes persuaded Olga Maitland to take part in (early 90s I think) and someone here reminded me that Michael Portillo had done something similar but on TV more recently …. living in pay-as-you-go accommodation for a couple of weeks.

    Perhaps we should start an e-Petition requesting Cam/Osbo have spells in ‘average’ accommodation and having to pay for every little thing out of an average weekly income.  I’m sick to the back teeth of their spouting from no experience, even though their talk isn’t directed at people in my own position.

    On the other hand perhaps an e-Petition about those that voted for certain cuts in job/pay/personnel numbers should offer themselves up for similar savings in Parliament?

  • Dave Simons

    Speaking about good old-fashioned graphics and nice simple explanations I wonder if someone could explain the following? Last November ‘The Times’ published some old-fashioned graphics relating to the National Debt as a percentage of Gross Domestic Product for a number of countries. It included all countries in the Eurozone plus the USA. In today’s ‘Times’ on page 7 this has been partly repeated for selected European Union countries. Last November Portugal, France, the USA, the Irish Republic, Belgium, Italy and Greece had higher National Debts as a percentage of GDP than the UK. In today’s ‘Times’, France, Germany, Portugal, the Irish Republic, Belgium, Italy and Greece have higher National Debts as a percentage of GDP than the UK – the USA is not included. The big change is Germany – about 75% last year, 83.2% this year. The UK has remained about the same at 79.9%, slightly up on last year.
    For the last eighteen months George Osborne and his colleagues in the Coalition Government have been justifying their swingeing cuts programme by telling the public that the UK is in a worse state of debt as a result of the Labour Government’s profligacy than everyone else – in fact nearly as bad as Greece. What I want to know is: which debt is being referred to by George and pals when they say that? It obviously can’t be the National Debt as a percentage of GDP as reported by the Conservative-supporting ‘Times’. And why do they never seem to get challenged on this by investigative journalists, academics and Opposition politicians?

  • Janiete

    I get the distinct impression that most commentators and probably as many legislators don’t understand the issues themselves. In an interesting item on Newsnight last night, Nick Leeson (the guy who brought down Barings Bank) said as much. Basically that’s how he got away with his reckless behaviour.

    Alistair Darling asked a crucial question in the HOC today, as to whether the ‘Big Bazooka’ firepower was in cash or in complex financial instruments. Unfortunately it’s the latter.

    The financial sector has brought us to the brink of catastrophe. Perhaps it’s time politicians admitted they don’t really understand what the banks are up to. At least until stability and growth returns, financial activities could be restricted to those we can actually understand and therefore can regulate properly.  

  • Anonymous

    Hi Alistair
    Your last paragragh says it all. Unfortunately we have reached a point where to take our leaders on trust on the European issue (et al) is something Mr and Mrs Normal find increasingly hard to go along with.  For too long vested interest groups have presented conflicting and confusing messages to them. The subject is complicated and most people recognise that some  aspects of integration made good sense but are averse to others. This makes a happy hunting ground for those who mis-use trust to gain personal advantage by mis-informing and spreading  their myths, prejudices and partisan views and untruths.

     So nobody trusts anyone and cherry picking is not on should referendum day arrive, which looks increasingly likely. Not a good place to start from.  We desperately need  unbiased, informed and understandable explanations of benefits and available options during what is going to be a very critical period in the determination of what is best for all European nations. ( Britain needs Europe more than Europe needs Britain) If ever there was a time for strong leadership and good communication, this is it. I hope a man for the time comes along soon  but I’m not overly optimistic. 

  • marymot

    This why we should never be ruled by referendum!  So many people will vote on prejudice very often fostered by our great British media. By all means let people vote in referenda but only if they’ve passed an exam on the subject—-although with a low pass mark!
     

  • Gilliebc

    Apparently the Chinese may be interested in buying some of the EU’s debts. (Source Skynews).

    Whether that’s a good thing or a bad thing, I’ve no idea really.  But slightly suspect the latter.

  • Janiete

    To be fair Dave, opposition politicians have repeatedly pointed this out, although I accept we allowed the Government to get ahead during the Labour leadership elections.  The trouble is our media refuses to convey that message to the electorate. Right wing newspapers constantly peddle the Tory view, whilst on TV, the best we get is an odd soundbite. More commonly, a supposedly impartial presenter challenges a Government spokesman, conveniently omitting the most pertinent criticisms of their argument. Rarely are Labour MPs allowed to challenge coalition spokesmen directly.  In the most part this is straightforward right wing media manipulation but I think incompetence also plays a part. The British establishment does not take democracy and the public’s right to access impartial, factual information seriously enough. You might enjoy John Mann MP nailing G Osborne on the Tory debt lie at::http://www.youtube.com/watch?v=AQYfPhtWpy8&feature=youtu.be

  • Dave Simons

    For a very short spell Matthew Paris tried living on the unemployment rate in the 1980s and he found he couldn’t do it. And yes, Michael Portillo did try something similar recently with as much success as Matty – he revealed that he normally spent as much when he went to his hairdresser’s as he was trying to live on – £80 I think (slightly more than me – I usually spend  about £6 for a trim at what I call ‘the barber’s’). Unfortunately the abysmal failure of these Tories to adapt their lifestyles to those of others does not seem to have much effect on their attitudes and certainly not on their political pinions and allegiances. It’s probably just something they have a little snigger about in their clubs.

  • MicheleB

    They never get challenged on Fox’s ‘unfunded commitment’ either (which I’ve already droned on about).

    I have the feeling that Labour and its side of the media are lying back knowing that the easy option is to let things get as bad as they can till 2015 when we will surely have reached another ‘things can only get better’ period (I’ve droned on about that before too).

  • Ehtch

    Maybe George was including the average personal debt of a person in the UK in his figures, which could very well be relatively quite high, what with maxing credit cards and quite high average property prices with resulting high mortgage debt. That is the only way I can think of explaining what he has come out with for the last couple of years – smoke and mirrors misinformation.

  • MicheleB

    Many of us have had a lot to say about Greece and cash-in-hand experiences on holiday and suspicions about tax being treated as a joke by many ….. while mostly still empathising about the present hardships for all Greeks. 

    This 15mins programme (quite hard to catch through the accent) gives another version of things and if it’s true that Greek gold reserves were stolen during WWII, maybe it could be more widely acknowledged so we don’t all only know about the seemingly magnanimous bail out.

    http://www.bbc.co.uk/iplayer/console/b016g4wr

  • MicheleB

    Nobody has said the EU does not need reform, rather they have said that reform is unlikely to happen for people that are threatening to leave, it’s  like blackmail, petulant toy-throwing.

    We need to admit what a petulant ignorant shameless shaky PM we have, someone that relies on others to cover his bad manners.  He called EM a ‘mug’ at PMQs this week and last week referred again to ‘dodgy dossiers’. He must have forgotten (or maybe didn’t even know) that the last time he did the latter an apologetic retraction was made on his behalf.

  • Great clip Janiet, when’s it from?

    Osborne’s assertion that German debt will overtake UK debt seems ludicrous.  Even before the Eurocrisis the costs associated with the cancellation of their nuclear program were clearly going to be astronomical. 

  • This is the brave new world of cybermedia where the people can chat to each other and work out the writing on the wall for themselves John.  We just haven’t really got going in Europe yet and we need to, fast!

  • George

    Just indulge me: 
    How long have we been members of the EU? During this time, has there been any reform other than yet more powers being ceded to the EU by Labour, Conservative and now Coalition governments? Remind me how beneficial it is to us that the Parliament moves between Brussels and Strasbourg regularly, just one example of political will (the French) over common sense and economics.Your rant about Cameron being ‘petulant ignorant shameless shaky’, what exactly does it have to do with the title of this piece?

  • Olli Issakainen

    Italy sold £7bn of 10-year bonds at 6.06%. This is unsustainable level. Portugal is becoming another Greece. Increase of EFSF to EUR1tr will only make things worse and the coming economic collapse bigger. The US is in worse shape than eurozone, and now faces a total collapse in 2012 as the dollar loses its role as the world´s reserve currency. I expect the US to collapse in March 2012. According to FT IMF is planning a new world currency called “Bancor”.

    Ps. Italy´s situation means that markets do not trust the eurozone deal.

  • Olli Issakainen

    Been a bit busy lately due to a new job, but here is a comprehensive report on the eurozone deal.
    Eurozone now faces even bigger challenge than the sovereign debt crisis. Looming recession.
    Europe´s debt crisis is, in fact, a growth and employment crisis. Austerity demanded by banks has killed growth, but without growth there will be recession.
    Austerity measures across Europe have only made the situation worse, exactly as I predicted long time ago.
    It is time to realise that we face a DEMAND problem in the economy thanks to neoliberalism.
    Neoliberalism must be abandoned, otherwise there will not be a recovery.
    The eurozone deal will lead to closer fiscal union – exactly as I predicted. The Telegraph wrote that it was a step towards the United States of Europe.
    The problems of the eurozone deal are as follows.
    The Greek bailout will not be enough. 50% writedown on the bonds by private investors will not make the public finances sustainable by 2020.
    The debt will still be at least 120% of GDP. Greece must leave the eurozone and have its own currency. This is the only possible solution.
    Harsh austerity measures by ECB, EU and IMF have only made things worse in Greece. The money has gone to banks – not to Greece.
    And there is still a possibility that “haircut” might be rejected.
    There will be more social unrest in Greece and Italy making reforms politically difficult.
    EFSF was boosted to EUR1tr (= bailout fund). This only makes the whole Ponzi scheme even more dangerous. Anyway, at least EUR2tr will be needed for Spain and Italy.
    Bank recapitalisation only makes things worse because banks will not be able to get the money from the private sector. So they will cut their lending to meet the 9% capital level, Less money to lend means recession.
    Initial market reaction to the eurozone deal was positive – markets wanted to believe.
    But the deal does not help the GROWTH in Europe a bit. There will now be a recession because of neoliberal austerity.
    Portugal, Spain and ITALY will not be able to pay their debts.
    Only long-term solution is a break-up of the euro, or a full political union.
    The whole eurozone deal was a massive confidence trick. It will not work. Slow growth in Italy, which has too much debt, will bring the whole Europe down.
    Without growth, the crisis will not go away. 

  • George

    Olli,
    Might not agree with this guy’s politics but try reading his financial analyses.

    http://hat4uk.wordpress.com/

  • MicheleB

    I must be misunderstanding my own language because to me your ‘what exactly does it have to do with the title of this piece?’ would be better asked about your own input.

    Yes we have been members of the EU for decades but it wasn’t ever expected to be closed thereafter, we always knew would  draw in other partners throughout its existence.

    Tell you what, if you do NOT think the constructive way to go is
    to work WITH our EU partners
    and not constantly be thweatening to walk out and slam the door  …..
    inhale …… why don’t you explain what our place in the world would be like as EX-EU members?  The floor is yours.

    We benefit from Europe being a fairer place than it was, we benefit from sharing Europe’s opportunities among recently ‘released’ East European countries. 

    Of course there is upheaval at the moment, etiquettes that have to be learned by people who’ve not had the chances or responsibilities before but get real ….. we were (well I know I was) born in to a country that was well-placed (despite the ravages of WWII) and we do not own the planet.  There but for good fortune.

  • Janiete

    Not sure of exact date but the file was uploaded to Utube on 7 Nov 2010. Osborne certainly shows what a prat he is.

  • George

    Yes you’re correct, you’re misunderstanding your own language.

    Rather than going off at a tangent, look at the OpenEurope site and tell me where they’re wrong. Digest my previous comment above and tell me why you disagree.

    I don’t know where you live but cloud cuckoo land springs to mind. The birthplace of democracy has ‘cooked’ the books and the rest of the eurozone has simply accepted it so that it could join the euro club. And yet, you’re talking about ‘etiquettes that have to be learned. You need to get real and recognise that the former communist countries are the ones abiding by the rules whilst the older democracies are the ones breaking them.

    Do some serious thinking for a change and tell me, ‘they have said that reform is unlikely’, who are you talking about?

  • Dave Simons

    Thanks Janiete. That was possibly after the article in ‘The Times’ last year and may even have been occasioned by it.

  • MicheleB

    You need to learn something; it is not necessary for people to agree with each other.  By disagreeing with you I am not ‘going off on a tangent’ (your closed mind means that you make no allowance for the differing cultures of late arrivals in to EU and expect nobody else to).

    We have no meeting ground, we differ, end of.