Democracy and Transparency: the central victims of the euro crisis

I’m continuing to branch out of my usual strict cartoon remit here on slugger. Indeed I have enjoyed producing the written blog and moreover have taken on a few insights ever since I started my temporary work stint at Open Europe and I hope I can share some of those insights with the slugger community in a constructive manner.

Mats Persson, the Director of Open Europe and my boss for the mean time has produced a piece in today’s Telegraph Finance that is most subtle in analysis yet hard-hitting in content as he dissects the democratic heresy as inflicted against Greece and some of the other weaker eurozone states:

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: 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”.

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.

“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.

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.

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.

Certainly the scenes that the world saw yesterday of streets filled with 80,000 Athenians marching in protest against proposed austerity measures, which have since gone through, sent out a pretty clear message. Only for so long can governments and European bureaucrats go against the will of the people, otherwise as Mats concluded, the people will look to other and far more unpleasant alternatives.