The 80,000 Greeks that came out in Athens yesterday to protest the latest round of bailout austerity imposed by EU-ECB-IMF troika can shout all they want. They can even express their disgust at the polling booths in the country’s general elections, scheduled for April. It won’t make much difference. To get its second bailout, the leaders of Greece’s main political parties are required to submit a written commitment to fully implement the package regardless of who wins the elections in April.
Everyone recognises that Greece needs fundamental reform – the country has for too long epitomised reckless economic behaviour. But as Andreas Vosskuhle, the heavyweight President of the German Constitutional Court, said in a recent speech: “It would be tragic and fatal if we were to lose democracy on the road to saving the euro.” Beyond everything else, this is the central dilemma the eurozone faces: necessary economic reforms are constantly pitted against basic democratic principles.
The demand for a written assurance to stick to the austerity plan in Greece is only one in a series of direct assaults on democracy, accountability and transparency that have followed in the wake of the eurozone crisis, including:
The technocratic regimes in Italy and Greece: Berlusconi was hopeless and Mario Monti has given Italy a boost, but the replacement of elected governments in Greece and Italy – under heavy pressure from eurozone leaders – with unelected technocratic regimes, has left a very bad taste. This was unintentionally summed up by the President of the European Council, Herman Van Rompuy, when he remarked in a recent speech that “Italy needs reforms, not elections".
This a practical issue too: reforms decided by technocrats without a proper popular mandate are less likely to be implemented and to stand the test of time.
An EU ‘budget-veto’ commissioner: A leaked German/Dutch plan would see the creation of a Commissioner, with the power to veto the budgets of poorer eurozone states – the proposal instantly drew a barrage of criticism and looks to be a step too far a the moment.
Central banks dictating economic policy: In August last year, the ECB sent an absolutely extraordinary letter to Berlusconi’s government, setting out a range of prescriptive reforms, including changes to the Italian Constitution, that Rome needed to enact in return for the ECB agreeing to buy Italian government bonds. These demands, which were only revealed months afterwards through leaks, appeared to have become government policy.
“Dark, secret rooms”: Symptomatic of the crisis, Eurogroup Chairman Jean-Claude Juncker suggested last year that eurozone meetings should take place in “dark, secret rooms” to avoid market speculation, admitting that he often “had to lie” during his career. In creditor and debtor countries alike, elected MPs are becoming increasingly frustrated at playing second fiddle.
Reduced insight for citizens: Citizens are left in the dark too. The opaqueness has even spread to traditional pro-transparency, non-euro countries such as Denmark. Since the eurozone crisis erupted, the website of the Danish parliament no longer publishes draft minutes of upcoming European Council summits – a great service which used to grant citizens insight. No explanation is given except for bilaget er fortroligt (the document is confidential).
The secrecy of the fiscal compact: negotiations on the much-hyped euro fiscal compact have equally been shrouded in great secrecy and the legality of key aspects of the document remains dubious.
The ECB’s mysterious balance-sheet: Apart from complaints in Germany that it’s engaging in illegal state financing (against promises made to German citizens), the ECB doesn’t publish any break-down of their bond purchases (not even with a time lag), nor any information about where the bonds they hold lay on the balance sheet. As the bond-buying amounts to a hidden, and growing, cost of the crisis to eurozone taxpayers, this begs the question: who, exactly, is accountable for these decisions?
And the list can be made much, much longer. As some are keen to point out, as all of this is happening under the auspices of (mostly) elected governments, it’s perfectly consistent with democracy. But even if that is true, the eurozone elite continues to test the limits of democracy at its own peril. If policies remain the same irrespective of who’s in power, sooner or later, voters will look to other, and far more unpleasant, alternatives.