29 February 2016

Labour hires discredited Varoufakis, reaches ‘peak Corbyn’


Imagine you are Jeremy Corbyn. The dysfunctional backstabbing tearing the Conservatives apart over Brexit has temporarily taken the heat off the Labour party’s own shambolic state. All you have to do as Labour leader is keep relatively quiet about the EU and let the eurosceptics battle it out. But you’re a socialist revolutionary, not content to sit by and let Westminster carry on without you, especially not when your party membership is falling at a dizzying rate. Plus you are in danger of being upstaged by your American counterpart and his impressive eyebrows.

So to remind everyone what you stand for, do you:

a) Endorse a failing autocratic regime in Latin America which claims to support its people but in fact leaves them queuing for toilet paper and unable to access basic healthcare,
b) Broadcast to the world that you intend to leave Britain’s nuclear submarines without nuclear warheads, to reassure Putin and others that they have nothing to be afraid of, or
c) Find the worst performing EU economy, whose crippling debts threatened to destroy the entire Eurozone, and hire its disgraced former finance minister as an economic advisor?

Yes, over the weekend Corbyn revealed that the infamous Yanis Varoufakis has been meeting with shadow chancellor John McDonnell and is advising the Labour party “in some capacity”. His reasoning?

“I realise we’re not in the Eurozone but it’s a question of understanding how we challenge the notion that you can cut your way to prosperity when in reality you have to grow your way to prosperity.”

Whatever your political leanings, it’s hard to deny that Greece was in a sorry state last year, when Varoufakis and his newly-elected Syriza party were pitted against the EU establishment in a fight to reduce Greece’s €240 billion debt and secure another bailout. As CapX Editor Iain Martin wrote at the time:

“What a disaster this crisis, and the Euro more broadly, has been for the Greek people from the start. There has been poor leadership by Angela Merkel and the Euro elite desperate to save their project, even if it means Greek pensioners weeping outside banks…. And then the Greeks were driven into the arms of the Marxist Syriza, its rise facilitated by the behaviour of the Euro elite.”

So it’s not hard to sympathise with the Greek situation, the Greek people, or even the Greek politicians like Varoufakis who went up against Merkel and Schäuble in the euro crisis. But to go from sympathy to admiration is a bit of a stretch. As Tory MP Greg Hands, Chief Secretary to the Treasury, has pointed out:

“Corbyn says he can learn from Varoufakis’s ‘experience in Europe’ but that experience was one of deep recession, capital flight, banks being forced to close for days on end and a government that struggled to pay public sector workers their wages and pensions.”

The Corbyn retinue’s fawning respect for a man who risked bankrupting his country with precarious bouts of game theory is disturbing. Let’s not forget that six months ago Greeks were forced to queue at ATMs for a capped withdrawal of €60 a day and prevented from sending money abroad. It is even more worrying if we remember that the Syriza platform was not just about Eurozone debt, but included plans to raise the minimum wage by 29.5 percent, bring back a bonus for pensioners, and deal with unemployment by creating or re-instating hundreds of unnecessary government jobs. (One of the first acts of the new Syriza government was the re-hiring of the 600 cleaning ladies at Greece’s finance ministry.)

Even if cosying up to a discredited populist who was forced to resign from his own radical government wasn’t bad politics, why on earth is Corbyn wading into the euro crisis debate now? For one thing, he’s a year late. As he himself mentions, Britain isn’t in the Eurozone. It is never going to be in the Eurozone. The UK managed to remain on the sidelines during the endless negotiations about Greece’s debt – it wasn’t really our problem, and Cameron was happy to keep it that way.

For Corbyn to start picking sides now, when the deal has been done and the rest of Europe has moved on, has no purpose except to remind British voters that the euro project is at risk of failing spectacularly and that Greece’s proposed solution to the migrant crisis is open borders. That is either the genius move of a secret Outer playing a masterful game of manipulation, or a poorly-considered invitation for any like-minded socialist to join the Corbyn club, regardless of the political implications. My money is on the latter.

As it stands, Varoufakis will probably be a welcome addition to John McDonnell’s team, which already includes Jeremy Corbyn’s son Seb (age 25) as chief of staff. Imagine if David Cameron hired his own son to work with George Osborne, and then invited Sarah Palin to come on board as an advisor. For Corbyn’s Labour party, this is business as usual.

Rachel Cunliffe is Deputy Editor of CapX.