Democracy in crisis: From Arab Spring to EU Fall?

November 15th, 2011

Schmidt

The following opinion piece was written by international relations professor Vivien Schmidt, a long-time EU watcher, and director of both the Center for International Relations and the Center for the Study of Europe. She is also the author of Policy Change and Discourse in Europe.

 

 

The resignation of Greek Prime Minister George Papandreou and Prime Minister Silvio Berlusconi of Italy are very different with regard to democracy in crisis. Berlusconi’s resignation may actually be a sign of democracy at work. Papandreou’s resignation is bound up with the Eurozone and the power of the EU.

Belusconi’s demise has mostly to do with the power of the financial markets and how these have forced a response from a stalemated Italian political system. Belusconi’s last-ditch effort to get the markets off his back, by offering to have the IMF vet Italy’s reform efforts every three months, is testimony to this. But even without those outside pressures, Italy has been having an internal crisis of national democracy for a while now. The fall of Berlusconi may very well be a new chance to make democracy work – with the EU playing a positive role.

Italy has been “rescued by Europe” in the past, in the mid-1990s when technical governments followed by the Center Left under Prime Minister Prodi performed the seemingly impossible, making a massive effort to put the country’s accounts in order to join the Euro. This could happen again as the Eurozone dictates the policies that Italy needs to become competitive again under a ‘technical’ government until new elections are held.

In the case of Italy, then, democratic legitimacy could be said to be preserved if we think of what happens as a tradeoff: the country briefly gives up participatory input – represented by the policies of an elected government – for potentially good policy output by a technocratic one, appointed by the President.

Papandreou’s resignation, by contrast, is directly linked to the Eurozone and the power of the EU. In order to avoid default, Papandreou had to make a “pact with the devil” that all countries in danger of default do – give up control over national policy in exchange for a supranational bailout. Even this can be considered democratically legitimate to the extent that a country for a short time gives up participatory input in exchange for good policy input. The difference is that when non-Eurozone countries go to the IMF, they give up control of their economic policy in exchange for a negotiated reduction in debt and a short, sharp period of austerity plus a devaluation of their currency.

Greece, as a member of the Eurozone, could not devalue its currency, and in the first bailout it did not even get a renegotiation of its debt, promised only in the second bailout package. In exchange for following the policies dictated by the Troika (IMF, ECB, and EU Commission), the bailout – including the second tranche – was only going to bring its debt back to its old level in 10 years, accompanied by an equally long, sharp period of austerity that would produce devaluation not of the currency but of salaries.

So what Greece got is no participatory input and bad policy output. While Papandreou ignored the increasingly vociferous protests of the Greek public over the past two years, thereby denying the protesters any democratic input, the policies themselves produced no growth while imposing increasing pain on a disenfranchised public. This is a recipe for disaster.

In this light, Papandreou’s call for a referendum could be seen as a genuine desire to bring participatory democracy back in, by allowing the electorate to vote on whether to accept the bailout package and, by extension, to stay in or to leave the Eurozone. The catch here, however, is that in re-enfranchising the Greek public he was single-handedly disenfranchising the greater public of Eurozone countries, for whom the fate of the euro itself was likely to depend on the outcome of the Greek referendum.

While Greece and Italy have specific problems with regard to the intrusions of the Eurozone crisis on democracy, the EU as a whole has another set of problems of its own. With regard to the Eurozone crisis, the EU has been largely governed by the member state leaders with the European Central Bank and to a lesser extent the EU Commission. The European Parliament, the only directly elected body in the EU, has barely been involved, while the implementation of the rules tends to be automatic, with tehnocratic oversight. There has been little public debate over the recipe for economic reform – austerity for all, across the board – and it is not working, as seen from the slowdown in European economies, including Germany.

If this continues, we might have to start talking about a democracy crisis for the EU as whole.

Contact Schmidt at 617-358-1092; vschmidt@bu.edu

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