Euro crisis: “We all know what to do, but we don’t know how to get re-elected once we have done it.”

In the Irish Times, Arthur Beesley identifies “one of the fundamental dilemmas in political leadership” being faced by eurozone politicians caught in a manifestation of  “the political trilemma of the world economy”

This presents a cocktail of nasty choices for EU leaders, many of whom seem more comfortable in the local arena than in the European amphitheatre.

Previously, they were free to do as they pleased in a currency system that did not hold debt-addiction to be any great sin. Now, national exchequers are on the hook for billions of euro if markets close to neighbouring countries. Furthermore, the drive to cut spending and increase tax creates social tensions of varying degrees. Add in the push for far-reaching policy co-ordination from Brussels and there is big potential for further pain down the line.

None of this is remotely appealing in electoral terms, for voters rarely give thanks for the avoidance of catastrophe. For a neat illustration of that, look no further than Merkel’s setback eight days ago in North Rhine-Westphalia, a regional poll which deprived her of a majority in the upper house of parliament.

That these are early days in the battle to save the euro only adds to the pressure. How would countries react, for example, if Greece didn’t repay the entirety of the bilateral loans that kick in this week? In the Berlaymont building in Brussels, home of the European Commission, officials point to a maxim set out years ago by Luxembourg’s long-serving prime minister, Jean-Claude Juncker: “We all know what to do, but we don’t know how to get re-elected once we have done it.”

If this stands as a powerful summary of one of the fundamental dilemmas in political leadership, it seems obvious at this point that the euro’s fate will be determined by the calibre of leadership shown. In a good or bad way, legacies will be made of this affair. The rescue fund does no more than “buy time”, says Merkel.

Indeed.  And to re-quote Stephanie Flanders, again.

But even the greatest fans of this new institution may still stop to ponder what has been lost – and what has been gained.

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  • Greenflag

    Jean Claude Juncker is like many European political leaders facing what could be called the leprechaun’s lemma (abbr. dilemma ) which is

    ‘When you get to the end of the rainbow -there is no pot of gold’ and what’s worse -there never was one anyway !

    Merkel for Fuehrer sorry that would be Fuehrerin (fem ) . I’m not sure about Sarkozy ? perhaps Nick Clegg could be Deputy as he’s already Deputy something or other ?

  • Mick Fealty

    That Pete, is the cut out and keep quote for the year, nay, the zeitgeist… May the good Lord be praised for Jean-Claude Juncker…

    We’ll watch quietly to see if anyone has the courage and the foresight to work out the answer to that…

  • Pete Baker

    Indeed, Mick.

    You might even say it’s an “important” point…

    Whether the [local] electorate are prepared to pay the democratic price is another matter.

  • Alias

    The problem with these europhiles in the Irish government is that they won’t even try to sell their bottoms to their pimps in the EU: they just bend over and say “Have at ’em, boys!” Greece, at least, screwed tens of billions out of the EU as the price for selling its fiscal sovereignty to the EU. Spain would demand a circa £300 billion bail-out fund as its price for selling its sovereignty and Portugal circa £40 billion. Ireland, full of grinning gombeens so keen on being seen as good Europeans at the heart of Europe, would simply give up its fiscal sovereignty without demanding as much as a fiver for its price.

    Actually, that quote may be “of the year” but its year is 2007. He was referring to economic reforms, and not to the electoral consequences of giving the sovereign democratic national electorates away to a supranational agency without the express consent of those national electorates.

  • Alias

    Typo: “…the electoral consequences of giving the sovereign democratic powers of national electorates away to a supranational agency without the express consent of those national electorates.”

  • Alias

    Incidentally, the problems created by a single currency are not problems that are created by globalisation: they are problems that are created by localisation.

    The Euro is a local currency despite its transnational pretensions. Its purpose is to be the currency of the emergent EU state, so it won’t serve any function for states that are not part of the EU. It is just 1 of 174 currencies in the world.

    So the problems that Eurozone states have encountered as entirely regional, not global, are of their own making: they chose to sign up to a currency that had a political and not an economic purpose.

  • aquifer

    Great quote.

    Instead of lowering corporation tax and paying with cuts, our MLAs will just give us electoral bribes now to stay poor later.

    e.g. Sammys rates rebate for grannies.

  • glencoppagagh

    “Ireland, full of grinning gombeens so keen on being seen as good Europeans at the heart of Europe, would simply give up its fiscal sovereignty without demanding as much as a fiver for its price”

    Maybe so, but their reward will be a lower cost of borrowing.

  • glencoppagagh

    Aquifer
    Can Stormont survive really serious cuts?

  • DC

    Without meaing to be trite I think it says more of the politicians than the electorate.