Thursday

21st Oct 2021

Opinion

Democracy at a discount

The eurozone crisis is yet again a painful reminder of how challenging it is to reconcile democracy and capitalism when the political institutions are lacking. It is now the self-appointed troika - the IMF, the European Commission and the European Central Bank - that decides the Greeks’ future living conditions.

The temporary rescue funds are established outside of the Lisbon Treaty and the Stability and Growth Pact. The funds are set up as a voluntary loan agreement among the eurozone countries. It is thus an intergovernmental, ad-hoc arrangement and it is the above-mentioned troika, which ensures that the measures are implemented.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

  • The French President Nicolas Sarkozy and German Chancellor Angela Merkel lack a European mandate (Photo: elysee.fr)

These institutions have never been voted upon. In addition, French President Nicolas Sarkozy and German Chancellor Angela Merkel lack a European mandate. Nevertheless, these and others heads of governments have agreed upon a series of financial, economic, social and wage policies that affect the well-being of very many Europeans. Such issues belong, according to the Lisbon Treaty, to the remit of the member states.

When George Papandreou opted for something as obvious as a referendum, it resulted in an outcry. Why could the citizens not express their opinion, even if this only meant a choice between two evils, between plague and cholera? The citizens could not be allowed a say because doing so takes time. Greece would be bankrupt before the referendum could be carried out. Uncertainty and falling stock markets would push interest rates upwards. It would ruin banks and undermine state finances.

Italy would probably also be on the verge of bankruptcy before the Greeks would have settled the case. So it is not just the Greek citizens who should participate in a referendum, but also Italian and all other European citizens.

The crisis affects all Europeans and beyond. Democracy requires that all affected parties can be heard. All those subjected to the law should be allowed to have a say in its generation! It is the European Parliament and a European-wide referendum that are the right paths for the management of the eurozone crisis.

The European political architecture is in many ways impressive. It is an attempt to politically catch up with economic globalisation. The supranational institutions that have been established – a parliament, a council, a court and an executive commission – can decide upon common European problems. The only problem is the lack of competencies in the most important fields.

The EU has no competence in fiscal policies, cannot redistribute resources, issue state bonds, print money and it has no sovereign tax basis. All this belongs to the competency of member states.

The EU is not a state. It does not have the necessary capabilities and resources to act as one, even though this could be needed these days. The EU does not function as a lender of last resort of government debt and does not possess the requisite power in the sphere of finance to support the central banks’ market interventions.

With his initiative, Papandreou put democracy on the agenda and demonstrated what is now at stake. He forcefully made clear the fact that the management of the eurozone crisis is a battle over what should have the upper hand: Economics or politics? Capitalism or democracy?

The writer is Director of ARENA – Centre for European Studies, University of Oslo, Norway

Disclaimer

The views expressed in this opinion piece are the author's, not those of EUobserver.

€8bn Greek payment on ice until referendum

Greece will not receive an €8 billion tranche of EU and International Monetary Fund (IMF) money until after its referendum on the eurozone rescue plan, reports indicate.

EU tells Greece: Choose the euro or go

Europe delivered a stark ultimatum to Greece on Wednesday night, demanding that the country’s planned referendum ask plainly whether the country’s citizens wish to stay in the euro or to get out.

Papandreou pulls back from referendum

Greek PM George Papandreou is readying himself to step down, according to reports, and is likely to be replaced by a former vice-president of the ECB. A referendum on the new bail-out deal for Greece appears to have been shelved.

MEPs poised to vote blank cheque for Europol using AI tools

Fair Trials, EDRi and other civil society organisations are calling on MEPs to hold true to protect our fundamental rights. We urge MEPs to vote against the revision of Europol's mandate, which distinctly lacks meaningful accountability and safeguards.

Column

Nothing as destructive as radical change

With Poland throwing the legal order of Europe in disarray, Russia rationing Europe's gas supply and the UK reneging on its Brexit commitments, perhaps the moment has come again to read a few essays by French philosopher Michel de Montaigne.

Time for EU to grow up as a democracy

Conference on the Future of Europe must address shortcomings in the EU model of 'dual democracy' and prevent backsliding in member states.

Stakeholders' Highlights

  1. Nordic Council of MinistersNew report reveals bad environmental habits
  2. Nordic Council of MinistersImproving the integration of young refugees
  3. Nordic Council of MinistersNATO Secretary General guest at the Session of the Nordic Council
  4. Nordic Council of MinistersCan you love whoever you want in care homes?
  5. Nordic Council of MinistersNineteen demands by Nordic young people to save biodiversity
  6. Nordic Council of MinistersSustainable public procurement is an effective way to achieve global goals

Latest News

  1. Dutch lawyers take Frontex to EU court over pushbacks
  2. Polish rule-of-law debate boils over to EU summit
  3. MEPs back EU food reform, despite strong lobbying
  4. EU calls for end to gas price speculation
  5. Romania pushes live-animal exports despite EU criticism
  6. MEPs poised to vote blank cheque for Europol using AI tools
  7. EU re-launches mammoth fiscal debates
  8. Czech politics in limbo over Zeman health crisis

Join EUobserver

Support quality EU news

Join us