The Greek bank run on EU democracy

July 13, 2015 10:12
As Greeks gather outside their parliament in Athens, a woman wears part of the flag of the European Union, which has displayed its democratic deficit in its handling of the Greek crisis. Photo: AFP

Now the Greeks have said no to the bailout plan and five years of belt tightening.

The fact that the Greek nation voted to reject Brussels reveals as much about European Union undemocracy as about Greek democracy.

The European establishment tried to intervene on the eve of the referendum.

EU politicians threatened that a "no" vote would trigger a "Grexit" from the eurozone.

What is worse, eurozone officials attempted to suppress an International Monetary Fund debt sustainability report that spoke in favour of Greece, only to reverse their course in the face of US disagreement.

That served to agitate resentment in Greece and led to the "no" vote.

Academics and journalists have long been commenting on the EU’s "democratic deficit".

For example, the president of the European Commission is not directly elected.

As for European Parliament elections, turnout remains low (just 43 percent in 2009). This raises questions about the legislature's legitimacy.

What I am concerned about, however, is that the EU risks edging closer beyond a "democratic deficit" to "democratic insolvency", judging from its behavior in the course of the crisis.

As early as 2011, the French and German leaders played a complicit role in ousting Greece's then prime minister, George Papandreou, who planned to put a bailout plan to a referendum, the Financial Times reported.

In the same year, as Italy set up an unelected government in response to the debt crisis, European Council president Herman van Rompuy claimed that “this country needs reforms, not elections”.

While Brussels’ actual interference might be limited, the implications of Van Rompuy’s claim must have sent shivers down the spine of many European leaders.

Some might contend that, since austerity is unpopular by nature, any given "direct democracy" is bound to reject it.

However, it is a fact that indirect democracies, characterized by representative governments, like in Britain, do voluntarily implement fiscal consolidation.

However, the Greek referendum was essentially a vote on Greece’s fate in Europe.

The Greeks should be allowed a say on their future.

True, European integration was born to be elite-driven, replacing democracy with technocracy in the name of “supranationalism”.

Brussels’ legitimacy derives not from democracy but from expertise. So why bother with democratic deficit or insolvency?

But a technocracy without democracy is an autocracy.

Greece’s austerity has no end in sight.

The fact is, the austerity policy is an extension of the domestic politics of EU member states.

It has nothing to do with impartial oversight.

And Brussels has lost touch with public opinion not because of the depoliticisation of decision making.

On the contrary, Brussels inadvertently politicized a sizeable portion of the European electorate, who now come under the label of Euroskeptics.

Such tensions do nobody in Europe any good.

A polity without public approval stagnates in the long run.

One solution is to enhance accountability of European-level officials by, for instance, endorsing the direct election of the European Commission's president.

This only targets the symptom, not the cause, though.

Europeans remain loyal to their own countries, not the distant European Union.

I do not envisage how the low turnout rate can be raised or indeed why it should be raised.

My proposal is that Europe should re-examine democracy at its very core.

Democracy? Whose democracy? For whom?

An ideal democracy must comprise citizens who are willing to confront their common fate.

It is easier for democracy to take root in homogeneous nation-states like South Korea and the Scandinavian countries, because national interests coincide with those of the dominant ethnic group.

This explains why South Koreans rushed to donate gold to their country when asked to do so.

In multinational states like Britain, Belgium and Iraq, democracy should entail devolution.

The general public should endorse sharing extra resources with secessionist or poor regions.

What is left for EU-scale democracy when member states try very hard (legitimately) to limit their revenue-sharing with crisis-stricken countries?

The EU is federalist in name but confederalist in essence.

In practice, it has elements of both, but the logic of the euro is making it ever more federalist.

If this continues, the EU risks turning into a vehicle of power for the European "core".

The best way out is for the European core to form a federation with significant devolution, combined with a confederation with the periphery.

This ensures maximal flexibility in policy making and sustainability in European integration.

Greece is the cradle of democracy.

Let us all witness a rebirth of European democracy, starting from Greece.

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EJ Insight contributor