States, markets and citizens on collision course

The uncertain outcome of the Italian elections and the success of Beppe Grillo have again demonstrated the undercurrents agitating Europe’s crisis-stricken countries. Will the EU, or even more crucially the markets, now make a gesture to break the vicious circle of crisis and citizens’ defiance?

Published on 28 February 2013 at 16:01

The tension that is simmering below the surface between the democracies of Europe and the international financial markets is not likely to end anytime soon and no one can predict its outcome.

The markets speak their own unforgiving language. They are threatening to pull the lending plug on Europe. But without borrowed money, or bonds, it will be nearly impossible for the bloc to maintain the standard of living and the level of welfare and social benefits that have defined the way its societies function since the end of World War II.

In fact, the markets are pushing the money to the East, where people are more accustomed to lower living standards and democracy functions differently.

The level of change and sacrifice in order to reach the targets that the financial markets are demanding, especially from southern Europe, is difficult, if not utterly impossible to achieve. No nation is ready to accept a major and widespread change of lifestyle – for the worse – without having an inevitable violent reaction.

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Politically manageable transition

The European elite, centred in Brussels and Berlin, believed that the transition to a more competitive and thrifty Europe would be a process that was politically manageable. This may have been the case for certain northern European countries that have a good grasp of the concepts of the social contract and show more fortitude in the face of adversity.

In the case of Greece, as well as that of Italy, however, reforms and harsh cutbacks have not been so easy to swallow and have not been passed easily. In such countries, austerity awakens the instinct to react against anything that shakes up the status quo and strengthens society’s anti-systemic tendencies.

Breaking the vicious cycle

How can we break out of this vicious cycle? It is impossible to tell. The crisis has deepened and broadened the already large cultural and political divides that separate European nations. And now it looks like the financial markets are not at all prepared to tone down their demands and take a step back. The risk of Europe entering a protracted phase of instability and economic hardship is on the horizon as the markets continue to increase the spreads and certain citizens vote for politicians like Italy’s Beppe Grillo.

The limits and strength of democracy are set to be sorely tested, even though European democracy often seems a shallow institution that is played out behind the scenes of the public stage – something neglected by those who champion Silvio Berlusconi today when just yesterday they were presenting him as a paradigm of corruption and entanglement.

Opinion

Stepping up to the democratic challenge

“The Italian election has confirmed many sophisticated people in their view that democracy – or at least, unmoderated democracy – doesn’t work. Left to themselves, they say, voters keep opting for lower taxes and higher spending. That’s why Europe is in such a mess”, writes the columnist and Conservative MEP Daniel Hannan in The Daily Telegraph.

Many in Brussels argue for a restriction in democratic rights, but there is another option. “Why not trust voters more?” asks Hannan, quoting the words of the late British Conservative MP Keith Joseph, who said: “Give people more responsibility and they’ll behave more responsibly.” Hannan points to the example of Switzerland, whose citizens are given a great deal of political responsibility through regular referendums. He adds –

Treat voters like children and you get sulks and tantrums. Treat them like adults and you get – well, you get Switzerland.

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