Sunday, November 06, 2011

So, as the dust settles on a momentous week, we can begin to discern what is happening both on a global and on a European scale. At best, the world has stood still and Europe has gone backwards. Within the latter, it's been established that one or more members of the EU can be exiled from both the eurozone and the EU in its entirety - something previously denied to the rafters.

And we've also seen democracy take a bit of a beating, ironically in the cradle of this institution, Greece.

But it's not been totally grim; we've had a few laughs at the expense of the French and Italian leaders, Messrs Sarkozy and Bersluscconi, neither of whom seem to have many days left in power. And then there's Mrs Merkel, doing her impression of King Canute and saying that the tidal demand that Germany take the only decisions that'll save the euro can be stayed by her saying they won't happen. Ever.

As one result of the week in which neither the world nor the EU were saved, we can now see distinctly different levels of democracy operating in Europe. From the lowest to the highest:-
Greece: No democracy at all: All fiscal decisions to be taken, one way or another, by the EU oligarchy.
Italy: Precious little democracy: Fiscal parameters set by the oligarchs and 'minders' established in the country's capital to make sure these are delivered on.
Portugal: Not sure of the details but think it's about here in the rankings.
Spain: Fiscal parameters set by Brussels but no bean counters on site in Madrid. Possibly now operating as a satrapy of Brussels, as predicted a while back by Edward Hugh.
France: In hock to the markets and circumscribed as to what it can do, as its exposure to Greek debt means the likely loss of its triple A ranking among the 'Anglo-Saxon' rating agencies.
Germany: Free to do what it likes. The people are to be obeyed in their antipathy towards run-away inflation, even if this means the collapse of the euro and the destruction of the EU dream. Likely to find this democratic power overwhelmed by events of the next few months. Or even weeks.
The UK: Not in the eurozone, so free to do what it likes as regards its (already) devalued currency and its budget. But naturally constrained by the reality that the collapse of the euro would lead to financial mayhem from which it would not be inviolate.

Anyway, that's enough from me. Here are a few citations from today's British press:-

Matthew D'Ancona in the Daily Telegraph.

Though its internal contradictions may yet have appalling economic consequences, the euro was always a political project, and one based on a quasi-religious, providential view of history and Europe’s destiny. After 1989, the EU and the idea of the euro filled the Marx-shaped hole in the world-view of the Left, and presented a new teleology in which a whole continent was going to be bound together, inexorably, by a single currency.  It is astonishing to hear the very same people who said Britain would be consigned to irrelevance outside the euro now insisting that we have a neighbourly duty to prevent its implosion: we do have such a duty, but it is based on hard-nosed self-interest, not obligation to the continental sages who – betraying their ignorance of history and its magnificent unpredictability – once insisted that their grand project would inevitably succeed.     One of the many errors the Founding Fathers of the euro made was to underestimate the resilience of the nation state.  In the case of the euro, nation states have, predictably, followed fiscal strategies that suit them, rather than the rules and pacts that support the currency. That’s what nations do – which is why the euro will need some kind of formal fiscal union if it is to survive, an even bigger pooling of sovereignty than the abolition of 17 national currencies.       The psychology of the EU – a postwar elite bureaucracy – is entirely out of kilter with this very modern surge of popular protest: technology-driven, non-hierarchical, anti-elitist. It is like trying to connect an old ribbon typewriter to an iPad.            This crisis is about much more than the fate of a 12-year-old currency. It is a test of what politicians are for, what they can achieve when pitted against market caprice and fiscal incontinence.

Larry Elliott in The Guardian.

Nothing being demanded of the eurozone – a credible bailout fund, a recapitalised banking system and decisive resolution of the Greek crisis – can be achieved easily.     In the meantime, the economic news got worse and worse. Friday provided evidence of a sharp drop in German industrial orders and a slide in the Eurozone's service sector. The G20 was required to do three things in Cannes. It needed to show that it could act together, as it did in London. It needed to stop the bleeding in the eurozone. And it needed to announce measures that would help roll back the threatening recessionary clouds.   It failed on all three counts.

Janet Daley in the Telegraph, on the specifics of the (widening) democracy deficit. And on the issue I've cited several times over the years - The clash of the supra-national zeitgeist of the EU with the sub-national zeitgeists of, for example, Scotland and Catalunya.

Thus far it has been politicians bending the knee. Whatever their governing classes decide, will Europe’s populations be prepared to sacrifice electoral self-determination? In peacetime, the voluntary renunciation of democratic rights is, so far as I know, unprecedented. But modern standards of prosperity have become so addictive – and Europeans so dependent on “social protection” (another favourite Barroso phrase) – that even the temporary loss of them may be too great a price to pay for an abstraction like political liberty.        Benjamin Franklin once said: “People willing to trade their freedom for temporary security deserve neither and will lose both.” In the present case, you have to insert the word “economic” in front of security, but the lesson still holds. If you lose the right to choose who governs you – or allow some greater authority to determine the limits of their power – what recourse do you have when the promises are broken and “security” becomes a prison?


Another post later tonight.

2 comments:

kalebeul said...

The "no democracy" gripe is pure demagogy. The Greek parliament can vote for default if it wants, and the public will shortly be able to vote in new representatives if it disagrees. No (foreign) tanks will appear on the streets.

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