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However Greece Has Voted Today, This Crisis Is Not Over - Yet the Government Is Letting Britain's Interests Down

05/07/2015 17:36 BST | Updated 05/07/2016 10:59 BST
Jonathan Brady/PA Wire

However the Greeks have voted today, the crisis is not over. A no vote will create a full blown Euro crisis affecting currency stability, European and British markets.

But a yes vote won't solve the problems as there is still no sustainable deal between the Eurozone and Greece on the table.

Britain will be affected either way. So why then are George Osborne and David Cameron doing so little to try and broker a solution or help Europe steer a course through the crisis?

Given the warnings from the Chancellor about how serious for Britain this is, it is about time the Government started engaging in some serious political and economic diplomacy before it is too late.

Already the economy and banking system in Greece is immensely fragile.

Capital controls are in place. Greeks desperate to get their money out of the banks are limited to just 60 Euros a day from cash machines. If Greece votes no today, without support those Greek banks will run quickly out of cash with huge implications for people's livelihoods, savings and the economy.

Greek exit means rampant inflation in Greece, including shortages of basic goods and chaotic uncertainty. And the shockwaves will be felt across the Eurozone with the stability of one of the world's biggest currencies under threat.

Faced with a no vote, we will need cool heads, urgent coordinated diplomatic action and economic intervention across Europe to limit the escalating crisis. So I hope the results show they voted yes today for that reason, because the instability will be huge.

But even if Greece has voted yes, urgent action will be needed. Greek banks are still under immense pressure. And whatever you think about the poor response from the Greek Government, the truth is that the offer from Eurozone leaders is completely unachievable.

As the IMF has made clear if Greece were able to meet every payment needed the plan proposed would see debt as a share of GDP in Greece remain at over 100% even by 2030.

No matter what we think of the irresponsible brinkmanship of their leaders we cannot impose further measures on Greece which we know will further shrink the economy.

It is not going to work. Greece should never have been included in the euro, but once it was all the Eurozone leaders had a responsibility to make it work.

There needed to be pressure for real reform in Greece at a time when it was achievable - and an understanding that the Eurozone countries stood or fell together.

Now that this failure risks reaping instability across Europe including here, we need big voices in Europe to persuade both Germany and Greece - and the whole of the Eurozone - that they need to agree an achievable long term plan that will actually get the Greek economy growing again rather than repeatedly putting it into reverse. Without growth any economy will struggle to pay its debts down.

The honest broker in that situation ought to be Britain. We are a major European economy, who can play a leading role and we are removed from the immediate negotiations because we are rightly not a member of the Eurozone. But instead our Government has taken a passive approach that is letting Britain's interests down.

The first emerging lesson from this Greece crisis ought to be that Britain is affected by decisions in Europe whether we are in the EU or not. Therefore we should be maximising our influence and engaging not sitting the side-lines. And the second lesson is that we should be continually arguing for reform including for reform of Europe's economic policy to focus on growth across every corner of the continent.

Imagine for a moment how a strong British Prime Minister engaged with the world around us in the national interest would be dealing with this and contrast it with the weak approach of this Government. George Osborne and David Cameron urgently need to tell us what they have done and are doing to stop this crisis escalating any further.

It is a tragedy of our foreign policy, economic policy and European policy that the Prime Minister is not capable of playing that role.

Yvette Cooper is the shadow home secretary and Labour MP for Normanton, Pontefract and Castleford