But the controversy goes to the heart of Europe’s problem with democracy. It’s not just fear of the risks of delay on febrile bond markets that has caused apoplexy, but the danger that Greeks might vote the wrong way. Voting is not how things are done in the EU. And whenever a state does actually consult its people – Denmark and Ireland had a go – they are made to vote again until they get it right.
But the democratic deficit has now tipped over into a democratic crisis. To protect the banks that lent to Greece and protected its elite from unwelcome tax demands, the country is being systematically stripped of its sovereignty, as EU and IMF officials swarm over its ministries drafting budgets, setting policy deadlines, “advising” on tax and pushing through state selloffs.
No wonder nationalist anger is growing. And all this to deliver a death spiral of spending cuts and tax increases that are sending Greece ever deeper into slump and debt. It makes no sense. Unless it’s understood that it’s not the Greek economy that’s being rescued, but European and US banks exposed to Greek debt. To protect the rentiers and prevent their own failures from seizing up the European credit system, Greece has undergone the deepest ever fiscal squeeze in a developed state without the possibility of any compensating monetary stimulus or devaluation – because of its euro membership.
I’m sorry. I can’t help it. I am sitting here with a smile on my face. The first card, probably a joker if the truth be told, is about to be removed from the house of cards Brussels built.
I used to be a pro-European. I was all for closer integration, economic ties and so forth. However, since the single European currency arrived, it’s become obvious that the “elites”, as Milne rightly puts it, really wanted a pure United States of Europe all along.
That was never going to work. The various referenda held on treaties, where a country’s population voted “no” only to be told to vote again but choose the right answer this time, were the first signs that all was not well.
I applaud Papandreou for suggesting his electorate should have a say in whether the solution to the Greek debt crisis should be accepted or not. Why should outside agencies have any say in how a sovereign country is run? The fact it annoyed Sarkozy and Merkel is icing on the cake.
The point here is it’s not Europe that’s in crisis, it’s the financial system itself. If a country cannot repay debts it has accrued in order to remain a functioning country at all, then why not simply write off those debts. Clear the debit sheet. Start over again. Yes, it’ll mean some heavy financial institutions, and perhaps even a couple of governments, will come crashing down—but that’s only for the best in my opinion.
The whole global financial system is broken, and blaming everything on one or two countries isn’t going to fix it.