How Greece Exposed Europe’s Potemkin Democracy

How Greece Exposed Europe’s Potemkin Democracy

How Greece Exposed Europe’s Potemkin Democracy

It’s not surprising that  Greece’s proposed referendum elicited such outrage. Europe doesn’t work like that.

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In June 1964, in a conversation with the Greek ambassador to Washington, President Lyndon Johnson gave free rein to his views on Greek sovereignty. “Fuck your Parliament and your Constitution…. We pay a lot of good American dollars to the Greeks, Mr. Ambassador. If your prime minister gives me talk about democracy, Parliament and Constitution, he, his Parliament and his Constitution may not last very long.”

Johnson had a notorious potty mouth. The leaders of the European Union are less blunt (being translated into twenty-three languages is an incentive to mind your language). But their frosty response to Greek Prime Minister George Papandreou, after he called for a national referendum to approve their austerity package, left little doubt about what they think of Greece’s right to self-determination. Responses ranged from the condescending to the baffled. “Totally irresponsible,” said French legislator Christian Estrosi. “I truly fail to understand what Greece intends to have a referendum about. Are there any real options?” asked Swedish Foreign Minister Carl Bildt.

Johnson made good on his promise. Within three years Greece found itself under a brutal US-backed military junta from which it did not emerge until 1974. This time around, the EU pledged banishment and penury if Greece strayed from the script. The Greek political class fell back into line. Papandreou resigned so that technocrats could take over. At the time of this writing the issues were when and how Greece will implode, and the scale and pace at which Italy will follow. Europe the continent is in trouble; Europe the project faces an existential threat.

That’s bad news for everyone, including Americans. Just as property binges in Las Vegas and Florida have spurred childcare cuts in Denmark and rent hikes in Portugal, so the collapse of the eurozone could have severe implications for police overtime in St. Louis and road-building in North Carolina. And Europe’s problems are essentially the same as those blighting the rest of the world: a crisis of economics exposed and underpinned by a crisis in democracy, both precipitated by the corrupt collusion of financial and political elites. For Europe, as for the United States, the result has been paralysis where decisive action was needed.

The crisis in economics is not difficult to fathom. A number of European countries took advantage of the low interest rates offered by their membership in the eurozone to borrow heavily. Banks across the continent lent freely. (Sound familiar?) Now some of the countries and many of the banks are broke. Initially, this was understood as a serious but containable irritation. Since the rescue of any one of the countries in question would not be too costly and the default of any would have raised serious questions about the viability of the euro, they were regarded as too small to allow to fail. Greece has the eighth-largest economy in the seventeen-member eurozone, with an economy one-tenth the size of Germany’s: Portugal and Ireland are tenth and eleventh. All put together, they have a GDP roughly the size of Florida.

The EU was intent on saving not the countries but the euro from contagion. Indeed, the collapse of the euro was so unthinkable that the European political class refused even to entertain the notion that there was a serious problem. Apparently they were the last to realize that Greece was headed for default. Their refusal to face facts devalued the most precious currency they had: credibility. Soon Spain was in the markets’ sights; now it’s Italy—the zone’s fourth- and third-largest economies, respectively.

By now the depth of the political problem has become apparent. The EU and the European Central Bank have no mechanisms, democratic or otherwise, to deal with the crisis. The eurozone and the larger, twenty-seven-nation EU have pooled pretty much everything apart from accountability. The nation-state still has authority, even though the EU has the power. “The crisis,” argued Italian Communist Antonio Gramsci, “consists precisely in the fact that the old is dying and the new cannot be born.”

It’s not just the markets that don’t believe the EU is capable of steering the continent out of this mess. Nobody does. The leaders of Germany, France, Italy and Spain are all suffering record low approval ratings at home. For the past few years at summits and bilateral meetings, they have cooked up rescue plans and then rammed them down the throats of supplicant nations. If the patient gagged, they simply waited a short while and tried again. The cynicism, anger and alienation this has engendered is difficult to overstate. Take Portugal. In March Prime Minister Jose Socrates resigned after his austerity plan was rejected, triggering an election that could not take place for two months. In the interim he remained acting prime minister, and reached an agreement with the EU and the International Monetary Fund for a €78 billion bailout. The terms were almost exactly the same as those Socrates had proposed and the Portuguese Parliament rejected six weeks earlier. When the elections finally took place, the turnout, at 58 percent, was the lowest in Portugal’s democratic history. “[When people] see the prime minister go to Brussels to announce austerity measures, they understand that the government itself decides very little,” political analyst Marina Costa Lobo told AFP.

The one thing standing in the way has been the people who have to live with the cuts imposed from without. It is their resistance, and their lack of any democratic connection to the EU, that keeps scuppering the deals. That is precisely why the prospect of a referendum in Greece was so terrifying. Papandreou thought there was a real chance of gaining grudging but popular support for the austerity measures. But Europe doesn’t work like that.

“It’s a big mess,” said Roberto D’Alimonte, a political science professor at LUISS Guido Carli University in Rome. “I don’t think it’s that the markets are too strong, but that democracy is weak.”

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