The results of the French and Greek elections of May 6 suggest that Europe has entered into a period of very disturbed politics. Issues aside – and the issues could hardly be more unsettling – there is the appearance that Europe has gone back to electing weak short-lived coalition governments. The glue holding these governments together will be fear of facing elections rather than dedication to matters of principle.
Virtually unnoticed by our media was the fact that three days after the May 6 debacle came “Europe Day,“ the annual commemoration, as the New York Times notes, of “the day in 1950 that Robert Schuman issued a declaration calling for an integrated Europe…. an economic union that would [in Schuman’s words] make war not only unthinkable but materially impossible.” (“Europe at the Crossroads: Splinter or Unite,” New York Times, May 9, 2012).
In the immediate post-Second World War years, the European mind was kept concentrated by recollection of the horrors of the immediate past. This exercise made possible many compromises of matters of policy that stood in the way of European unity. Some historians now tell us that the differences among the parties made little real difference as foreign and defence policies were really out of the hands of the Europeans (transferred to NATO and the U.S.A) while the outlines of domestic policy came out of the minds of the senior civil servants and ultimately out of the universities where the ascendant wisdom was moderate socialism.
In those days, there was general agreement in left-of-centre circles in the UK, Canada and the United States, that the more enlightened Europeans were leading the way for all of us towards a benign state socialism. Our own politicians of the left cried out for us to emulate the Europeans, and the Northern Europeans in particular (the Swedes more particularly still) and to design cradle-to-grave security for all citizens.
Today, as in the 1930s, a public policy crisis has overtaken a economic crisis which in turn had overtaken a liquidity crisis in the present case initially caused by government’s benevolent over-investment in programs to help everyman by a home. The liquidity crisis was solved; but what emerged was a more fundamental solvency crisis of global scope. The immediate cause behind present instability was that governments big and small (except perhaps China and, for the time being, Brazil) were breaking under the strain of too much debt. The long-range cause had been the expansion in recent years of costly programs that have come to be considered entitlements. Most of obligations undertaken by our governments was put on the credit card – on the Never-Never as the Brits say. Politicians got to love the arguments in favour of expanding them, while continuing to encourage us not to notice that budgetary deficits were getting larger and sovereign debt was expanding exponentially.
With the liquidity crisis evidently behind them, austerity replaced growth as the primary concern. The political parties of longest standing found themselves stuck with the dirty work; and so as soon as the people were called in to pronounce their verdict these centrist parties were punished. A long and still-growing list of new parties were rushed into the list, most of them devoted to simplistic single-issue solutions and sometimes to brutal action. All of this again conforms to the situation of the 1920s and 1930s.
This week’s political news reflects a long –overdue reckoning upon parties who accepted debt that cannot be paid — debt which everybody knew could never be paid. A few months ago, a tough-love solution was accepted by Ireland, Portugal, and Greece, while in almost every other European country negotiations to work out variants on this strategy started up and are still going on. In two countries, Greece and Italy, the leaders of the elected governments, Papandreou and Berlusconi, resigned so that new governments could be accepted by their parliaments without holding elections. These new governments were headed by alleged “technocrats” – which, being translated, means the very men who had guided the politicians through years of promotion and implementation of the policies that have created the present mess.
The fact that Europe’s situation is relatively worse than Britain’s or North America’s is precisely because levels of state involvement in the economy and in social programmes have for the past sixty years been higher in Europe than in America. The dilemma now is that the cuts in spending and in “benefits” are reducing spending by the public – thus reducing capital, and thus reducing the pool of taxable income. Advocates for the optimistic interpretation – chief among whom for obvious reasons is Barack Obama, President of theUnited States — pretend to be convinced that the quick-fix has worked and that slow recovery is the reality of the moment. In fact, the reality of the moment is a dead-cat bounce.
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My interest here is in examining and putting into historical context the political consequences of these economic policies. As for solutions I offer only this thought: that people who imagine that they have the answers should not be trusted. There is a corollary: that the solution to crippling debt cannot be more debt. This is like saying that the way to overcome gravity is to climb up higher and try jumping again.
Meanwhile, protests against these highly unpopular policies are occurring everywhere while the behaviour and the slogans that appear in public are becoming more blatantly anarchistic. On the far left and far right, pledges are declared to throw the indebtedness back in the face of the bankers (of which German s are major figures.) Among other hot-button issues raised by protesters and embraced by the new parties is immigration, blamed for excessive burdens on services (schools, health, etc) also blamed for crime, and more generally for putting in jeopardy the historical legacy of Europeans. At both extremes, have appeared political parties devoted to returning by force the unwanted non-Europeans. This, too, is a feature reminiscent of the pre-Hitler years.
On Sunday, May 6 the Greek electorate reduced to one-half the number of seats previously held by members of the two parties at the centre of the governing coalition. Votes are now so scattered across so many parties that it has proved impossible to form a government, and so another snap lection will be held in June – yet another unwanted burden for taxpayers. Meanwhile, as the new loan instalments come due and as negotiations are contemplated for further loans, Greece is without a government.
On the same day the French voters threw out Nicolas Sarkozy, the architect, with Chancellor Merkel, of the template under which desperate governments were to be rescued. The new Socialist President, Francois Hollande, insists that a new pact must be negotiated, one based on his own motto: that “Austerity can no longer be anything that is inevitable.”
An eerie mirror-image of the politics of politics of 1920s – is emerging. At that time, the political wisdom was that Germany had caused the Stock Market Crisis as she sought through resort to deliberate inflation to escape the lawful debt imposed on her by the victors in the recent war. Today, the newest cohort of European politicians are hinting at walking out of the Eurozone, if that’s what it takes. They can then resort to their own currency– which of course can be manipulated, just as the Deutschmark was in the 1920s, into a medium good only for paying off debts.
The Europeans – having got over their fear of having the likes of Hitler and Mussolini back and suspecting that the vices of those rulers were in any case exaggerated in memory for the political benefit of the Anglo-Saxons – are resuming the pattern of politics thatpreceded Hitler and Mussolini. Unstable party politics is calling forth absolutist solutions, and resurrecting national-chauvinism to replace the vision of common European destiny.
Given the Biblical best-before-date of three-score-and- ten, we have to accept that no one now alive can tell us what those years were really like. Perhaps that is why God gave us historians.
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