well this is something inherent in the nature of asking people to voluntarily lend you money. You may be bona fide a democracy, but if the people who you are relying on say “we’re not going to lend you any more money because we doubt you will repay us”, you don’t vote for that outcome, but your democracy has to deal with it. If these people are foreigners saying “we want you to do X before we will lend you any money”, your democracy has to deal with that. For this reason, I’m not sure the imposition of conditions from external lenders is undemocratic – I mean lenders are surely free to set their conditions, and your democracy must decide how to react to those conditions.

Maybe a referendum is the right thing, because unless you happen to have a general election conveniently scheduled, you have to accept what the current incumbents decide.

If you take a look at this here short article by a well respected international economist you will see

1. somebody agreeing with you about democracies being rail roaded
and
2. somebody pointing out that the IMF has nothing to do with it – in this instance, they are not guity

http://voxeu.org/index.php?q=node/7222

Here is another economist urging the IMF to get off the sidelines and take control

http://www.piie.com/realtime/?p=2500

and here’s another possible undemocratic outcome – the ECB starts throwing its weight around

http://worthwhile.typepad.com/worthwhile_canadian_initi/2011/11/could-the-ecb-become-the-central-fiscal-authority.html

Finally, I can’t find the relevant links, but what this really shows is that a system of separate democracies isn’t very good at solving collective problems when those democracies have conflicting interests. Voters in countries will strong public finances aren’t going to vote for splashing their cash on Greeks and Italians, Greeks and Italians aren’t going to vote for hardship if they can help it.

Some people like to say this crisis is a crisis of capitalism – I think it’s nothing of the sort, it’s a crises of the political structure of the Eurozone, and a consequence of trying to have a single currency in a region not suited to having one, or without the necessary political mechanisms.

I am afraid you are still not looking hard enough at the EU and the Euro. Iceland: defaulted but still a free country. Ireland, Greece, Italy – not so obvious and in the Eurozone. The Euro was setup constitutionally to be anti-democratic (target inflation, fuck unemployment is the not so implicit rule of the ECB). Any democratic oversight to change policy would have to take place at the European level, of which there is very little.

The current form of the EU and democracy are incompatible. And that is why we are all Eurosceptics now:)

“Well, well. I’m hardly the first to note the irony that a vague and nebulous concept – “markets” – has unseated the Italian Prime Minister, a feat that innumerable opposition politicians, crusading journalists, police and prosecutors couldn’t achieve after years of hard work.”

Markets are the only thing the monkey political class have to answer to.

I don’t think it’s entirely unfair to think that, as far as the EU is concerned, we the people are now feeling the sting of a gigantic long con.

Something I think is unfair is that often people look at the vast numbers of people who are anti-EU and see them as troglodytes; xenophobic anachronisms who want empire and commonwealth and all that old fashioned crap. But here’s the thing, there are tens of millions of people in the UK who are opposed to being in the EU, and they can’t all be that stupid. Maybe they just look at the tons of money being pumped into the EU and the amount of idiocy going on there and think that maybe this relationship, of us paying for the stupidity of our neighbours while lacking the funds to fix our own stupidity, is not sustainable.

When the Iraq war happened and it was clear half the country didn’t want us to get involved people saw that as a reason not to go to war. And yet we’re up to our neck in the EU and at least half the country hasn’t wanted us to get stuck into that particular quagmire for decades. Maybe it time to throw these people a democratic bone and acknowledge that the British people are not continental Europeans and most would like more distance than successive governments have allowed us.

Is there not a case for re-evaluating our membership of the EU without the casual assumption that it has to be a good and perfect thing? I mean I like a lot of what we get from the EU, but surely every system needs to be kept under close scrutiny to ensure it remains fair.

Which is why The Raygun/Thatcher revolution wanted everything to be run by markets. It replaces democracy, which the Right has never liked.

There is also a saying that countries gets the politicians they deserve – most Italians presumably wanted Berlusconi and his crew, so we can’t blame the IMF for voting for him, can we?

“I look from our domestic debt industry, with its aggressive lending practices and cheerful lawsuits for decades-long repayment” – ahh, university ‘top up fees’, the latest wheeze to ensure the propagation of debt culture.

Actually, the ‘true face of power’ has probably not changed very much for a aeons, it’s just that the largesse of such a system surfaces every now and then, and it’s easier to be angry with it’s human face (Berlusconi) rather than the nefarious mechanisms and activities that sustain such arrangements – not least because the general public have little insight or knowledge of them.

And states wouldn’t have to face the markets if they didn’t typically get into so much debt. But state officials love debt – jam today, someone else’s problem tomorrow. Solves every problem until it becomes the problem.

“There is also a saying that countries gets the politicians they deserve – most Italians presumably wanted Berlusconi and his crew, so we can’t blame the IMF for voting for him, can we?”

Not necessarily: there is no democratic mechanism (and Italy’s PR is a particular failure) that can consistently aggregate everyone’s diverse preferences and come up with a sensible winner. Democracies don’t put people into power, they throw people out of power. And the main problem with Italy isn’t Burlosconi but the complete absence of good competitors.

[7] Sarkosy, Blair, Putin ……… nutters, all of them.

Were they nutty pre-power, or do we blame the job; managing expectations that can never reconciled in a snake pit?

“And states wouldn’t have to face the markets if they didn’t typically get into so much debt.”

Deficit, not debt. Once you balance a budget it puts you in a stronger position to re-negotiate the terms of debt because you have the option of default.

It seems to me that Germany and France are the ones twisting arms and behaving as though Greeks didn’t need democracy. I’m no fan of the IMF’s past actions, but they aren’t the only villains of this piece.

We would be enraged if our debts had been inflated in relation to GDP like the Greeks. Wrong-headed extreme austerity measures, all to satisfy the politics of Germany and France, who were the drivers behind the Euro.

The fact that there is talk of a need for martial law in Greece should be enough to alert us to the nature of what possibly faces us all. We could be heading for very bad times, paying for the mistakes of our politicians and for the consequences of the capture of our democracy by the financial industry who will still thrive while we pay for their sins for generations.

Monglor,

It is perfectly possible for a large number of people to be wrong. For example, there is, I suspect a popular majority in favour of capital punishment in this country.

Secondly, the vast majority of the people in this country don’t have a first clue about what the EU is and what it does. Lots of people in this country are xenophobic and stupid. For example, look at the combined readerships of the Sun and the Mail and the Express. To a person they probably hate the EU, but if you asked them what it was, how it worked, or whether they voted in the last European elections they couldn’t give you a decent answer.

You’re right, that there are plenty of problems within the EU, but if you actually start explaining to people: Well, you want a free trade area, thats fine, but you also want common standards on all sorts of things, food safety, fire safety, so that businesses only need to work to one set of regulations. At which point people say ‘oh, well that makes sense’, then you ask them how we should come up with these common rules, clearly some sort of organisation is needed. At which point you’ve created the EU from scratch. Likewise, there are issues which are bigger than one country can handle, so you need some system for cooperation etc.

The trouble is that people don’t think like that – they think: ‘That bloody frenchman is telling me what to do, I hate the bloody French because they’re foreign’

Well, well. I’m hardly the first to note the irony of constantly mentioning the IMF and never once referring to the European officials. The left need to get over their paranoia about the IMF and start to understand who is really calling the shots in the European debt crisis. Hint: it ain’t the IMF, it is the European institutions. Their officials are not the cuddly social democrats of lefty lore.

President Clinton lost against the bond market in the 1990s, so the chances of Papandreou and Berlusconi not being brought down were minimal. You might not like that type of power being used against elected politicians. Yet it is governments who are the ones selling debt to fund their promises. The party is over when the people being asked to buy the debt lose faith in the governments ability to manage. A loss of faith in a government is what a bond market crisis is essentially all about.

The ECB officials have wanted Berlusconi gone for some time. They were manipulating the Italian bond market to keep yields high enough to pressure him, but keeping them below crisis levels. Enter Merkozy to say what everyone has known for two years. However, the European officials were paranoid about anyone even discussing the issue. The euro project had failed and maybe some members ought to leave. They have spent the last two years refusing to even answer questions about the possibility. Now the leaders of the two most powerful members were openly discussing the prospect of some leaving. It was a deliberate ploy to provoke capital flight from the periphery. It worked and they got acceptable technocrats installed in Greece and Italy. If anything, it worked too well and the selling in the Italian bond market midweek overwhelmed them. The ECB was in the position where theirs was the only bid for Italian debt.

The technocrats will not solve the fundamental problems, they may buy time but the whole project is a running sore that will gradually impoverish the periphery even more. Because it is a running sore uncertainty will continue and international firms will be very wary of doing cross-border trade with firms in peripheral nations. Who knows if they will even still be members of the euro in three months will be the attitude, and If they do trade at all with them they will be charged a premium for the risk. Impoverishing their consumers. This will increasingly be the norm. http://ftalphaville.ft.com/blog/2011/11/11/743711/a-drachma-tic-moment-in-greek-oil-trading/

Only Iran in open credit is prepared to sell oil to Greece. No one else wants to sell to them because of uncertainty over payment. A crisis made and mismanaged in Europe.

@1 – If so, then Britain is a tyranny.

Thanks for using a multiple voice when you’re expressing xenophobia as well.

The op’s right, we’re going to have to chose between democracy and corporatism soon. The right’s choice is clear – corporatism. Labour needs to dissent.

13
It’s not often I quote Tim Worstall, but corporatism has not been confined to business interests, the unions of old were part of that system and they were there courtesy of Labour and, more specifically, the post-war consensus.
The Labour Party dropped the unions like a brick after 1984 (an irony in itself) and changed their allegience to one led by the Thatcherites.
That Labour should dissent – don’t hold your breath.

@13 – His made-up theory that people organising themselves in any way is somehow equal to a multinational business?

What rot. Stopped reading right there, I don’t have time for the hard right.

Isn’t it simply the case that Europe, in the political sense, has seen the financial crisis as a golden chance to create the’Brussels Dream’, a federal state, smaller than the original idea but still a federal state, controlled and micro-managed from the office of some faceless penpusher. The threat of expulsion from the euro is more than just a warning to the likes of Greece, Ireland and Portugal to sort out their finances, it also serves as a warning to prospective member states. You do things our way, or you can’t join the club and, given that Merkel, Sarkozy, Lagarde at the IMF are all very much to the right of the political spectrum, I suspect that membership will be used as both a stick to beat the heads of more left leaning governments, but also a carrot to persuade the moderates to impose a more right wing system on their people. Hardline austerity in exchange for membership, thereby giving access to lower rate loans. Or, as the religious types would say, trading your soul for the Devils’ favours.

13 – Er, how was Nick expressing xenophobia? You seem to enjoy throwing that word around too much, you’re in danger of playing up to a steroetypical right-wing view of what lefties are like when debating the EU. The key point about British as opposed to EU “tyranny” is that we in Britain can elect a government that can cease to be “tyrannical”. We cannot however elect a government for the whole EU. We should be aiming to decentralise power downwards to county level, not centralise it upwards to EU level.

@17 – It’s a word which people are scared to use about Little Englanders, when it applies to each and every one of them.

And no, we can’t. A minority of this country’s people gets to elect a government, a vast number of people are wasting their time voting here in the national elections. The EU is far more democratic, it’s got a large PR element as well as national government-elected officials in control. The democratic deficit is very much on Britain’s side.

“Decentralising” is another word for allowing rights to be restricted on a geographical basis, rather than having a single set of democratic values. Ideally, I’d like to see national governments go away like the relics of another age they are.

@ Leon

we’re going to have to chose between democracy and corporatism

We have democracy and we have corporatism.

If you think democracy is intended to be, or is effective as, or could be effective as a bulwark against corporatism, you are a more of a fool than you have yet demonstrated.

How are we going to choose?

By voting?

@19 – Well, your choice is corporatism then. Thanks for making your side clear.

” The EU is far more democratic”

If this is your understanding no wonder your at the bottom of the pile

@21 – Of course, you view me as sub-human because I actually look at the facts.

@ Leon

Well, your choice is corporatism then.

Not at all. I hate corporatism.

But we need to find a better way to counter it than democracy.

Who can we vote for that will try to curtail it?

Ed Milliband?

From the WSJ last week ……

“The second reason the ECB may refuse to make huge bond purchases is moral hazard. The ECB would lose its leverage to drive fundamental reform in Italy. The discipline imposed by high interest rates currently offers the best hope of making the euro zone more competitive. And if the ECB accepts the role of lender of last resort to countries, it can’t be rescinded. Its relationship with governments will have changed fundamentally, making it hard to resist future demands. The ECB effectively will have ceded a large slice of its cherished independence.”

Don’t you just love the elites hatred of national sovereignty? Worth remembering when other Murdoch papers lecturing on the wonders of ,eh …….National sovereignty.

@23 – What do you call occupy? What do you call 37 degrees?

The END choice isn’t the same as the tools you use to get there. This is a struggle for which of the choices I gave controls our future.

@23 – What do you call occupy?

Extra democratic. And all the better for that.

What do you call 37 degrees?

Our body temperature.

People in the UK have a weird view of the EU; as has been noted above much of it reflects a pretty low level of understanding, and yes even xenophobia. On the one hand they complain about it being undemocratic, but on the other they insist on national vetoes. Many people want the benefits of EU membership, but don’t really want to be in the club. Small, oil rich Norway might be able to pull that off…we probably can’t!

Some of those calling for us to pull out might like to reflect that had the UK actually acted to be at the centre of the EU project, rather than sit on the sidelines throwing rocks, we might be better off. I’d have preferred UK more aligned with Europe for example as it might have avoided the folly of slavishly following the US into Iraq.

Future history is difficult , but as someone pointed out earlier today on Radio 4, things with Iceland, Irealnd and Greece might have been a hell of a lot worse without the EU and ECB. There is no guarantee that the EU… however it evolves… will let the UK cherry pick which bits of the benefits of EU membership we want.

People are right to be concerned about democracy… but it’s not as if the Greek and Italian examples say a lot for the electorates or elites concerned is it?

@26 – 38 degrees. Wrong key!

@27 – ‘xactly

Galen @ 27:

“things with Iceland, Irealnd and Greece might have been a hell of a lot worse without the EU and ECB.”

Without the Euro, they’d almost certainly be better.

@29 – Pfft.

Iceland wasn’t linked to the Euro, and remains in deep trouble, even WITH it’s balance of trade.
Ireland, on the other hand, shows the dangers of pandering to corporate interests and yet is going straight back down that road again…

Greece? Well, sure, if you want a cheap source of labour who’ll do near-anything to get food after they defaulted…

““Decentralising” is another word for allowing rights to be restricted on a geographical basis, rather than having a single set of democratic values. Ideally, I’d like to see national governments go away like the relics of another age they are.”

Decentralising is a way of allowing people to have much control over their town town/county/country as possible. Why for example should middle class Tory voters in say, Surrey, have a say over the lives of working class votes in Labour’s heartlands and vice versa? In fairness there is an acceptance in the UK that one region can effectively rule over the other – otherwise the South East would have tried to secede under Labour or South Yorkshire would be trying to secede now. Such tolerance does not extend to a European level though. Similarly I doubt Europeans would appreciate being outvoted by Asians or Asians by Americans and so on.

The fact is that you may wish for the nation state and national feeling to die off but it shows no signs of doing so, The majority of people in this country are certainly not UKIP-inclined but nor are they “progressive” internationalists. The sooner the Left comes to terms with this the better. Good article on this here which puts it better than I can: http://www.politics.co.uk/comment-analysis/2011/11/07/comment-the-left-must-abandon-the-eu

Indeed if they actually attempted to foster a national feeling rather than undermine it the Left might be able to legitimise the welfare state (while of course avoiding going down the dangerous “blood and soil” route).

@32 – “Such tolerance does not extend to a European level though”

Why not? You’re drawing artificial lines in the sand. (Hint: xenophobia)

And of course you’re a hardline isolationist. This isn’t surprising for the hard right. Calling for blood, constantly. Gotta have those intercene wars!

28. Galen10

Some of those calling for us to pull out might like to reflect that had the UK actually acted to be at the centre of the EU project, rather than sit on the sidelines throwing rocks, we might be better off. I’d have preferred UK more aligned with Europe for example as it might have avoided the folly of slavishly following the US into Iraq.

Some people want to be a small cog in a vast machine. Others prefer to be free. I have never seen the appeal of the slave mentality myself, but I know that others do not share that view. They would much rather be in Mordor than the Shire.

But for the laughs, tell us how we would be better off at the centre of the EU project? By which you mean subservient to France’s self-selected oligarchy.

We might have followed the US into Iraq. It did not harm us much and may on the whole have benefited us. But we did follow the French into Libya. Which seems to be turning out worse. Being part of the EU is not guarantee of sensible policies. As most bad ideas these last 200 years have come from Europe.

Future history is difficult , but as someone pointed out earlier today on Radio 4, things with Iceland, Irealnd and Greece might have been a hell of a lot worse without the EU and ECB.

Then they are fools. Without the Euro they would not be in the mess they are in.

There is no guarantee that the EU… however it evolves… will let the UK cherry pick which bits of the benefits of EU membership we want.

Sure. That route lies national extinction. Whichever way we want to play it. A good reason to get out.

People are right to be concerned about democracy… but it’s not as if the Greek and Italian examples say a lot for the electorates or elites concerned is it?

No. So naturally you want them to rule us too. Amazing.

@34 – Oh darn straight!

http://www.salon.com/2002/12/17/tolkien_brin/singleton/

I’m all for the future, not the past you turn to.

“By which you mean subservient to France’s self-selected oligarchy.”

Nope, that’s the sort of moronic conspiracy theory you dredge out because you don’t even begin to understand the structure of the UK government, let alone the EU.

Leon @ 33:

“Why not? You’re drawing artificial lines in the sand. (Hint: xenophobia)”

Err no, he’s just describing how people feel about national identity and governments. You may prefer to stick your head in the sand, ostrich-like, and not acknowledge that people do feel this way, but that’s your problem, not anybody else’s.

@ 35:

“Oh darn straight!

http://www.salon.com/2002/12/17/tolkien_brin/singleton/“

That article’s a load of rubbish; the author’s view of history is hopelessly whiggish and triumphalistic, and his reading of The Lord of the Rings is similarly superficial (how many “indomitable Romantic heroes” were overweight, middle-aged men who succeeded at their task through luck and were left physical and emotional cripples by their experiences?).

@36 – You’re a typical Elf, I see.

And it is absolutely an artificial line, and one which has only existed for a relatively short period (2-3 centuries, depending on location) for the vast majority of the Human race.

FR:

Surely, the lesson from your piece is that states should not borrow more than is absolutely necessary, otherwise a democratic polity will find itself partly controlled by its creditors. Unfortunately, the left is addicted to spending more money than is raised in taxes…

“Some of those calling for us to pull out might like to reflect that had the UK actually acted to be at the centre of the EU project, rather than sit on the sidelines throwing rocks, we might be better off. I’d have preferred UK more aligned with Europe for example as it might have avoided the folly of slavishly following the US into Iraq.”

Oh rly? How has being at the centre at Europe worked out for Italy? Being pro-EU was perhaps the main plank of Italian mainstream politics in recent years. They are being torn to shreds, essentially because their econonomy doesn’t quite match up to Germany’s. I agree that being a bit on the sidelines hasn’t worked out so well for us, we might still be drawn into the crisis. But there is no reason whatsoever to imagine that being further in would have actually helped.

And Spain was in Iraq too. So it is hardly an either/or with the US’s foreign interventions either.

@38 – And the right is addicted to cutting taxes for the rich and STILL spending more than the far smaller account it collects on services for the rich. And?

SMFS @34:

“Sure. That route lies national extinction. Whichever way we want to play it. A good reason to get out.”

Are they polluting our precious bodily fluids too?

I’m hardly the first to note the irony that a vague and nebulous concept – “markets” – has unseated the Italian Prime Minister, a feat that innumerable opposition politicians, crusading journalists, police and prosecutors couldn’t achieve after years of hard work.

Well you might not be the first, but you’re all being a touch simplistic. Berlusconi went because he lost his majority in the Italian Parliament. And he lost that majority in part because of the bond markets, but also in part because of a gradual loss of authority hastened by opposition politicians, crusading journalists, police and prosecutors. The bond markets didn’t snap their fingers and start the orchestra playing, it was merely the final nail in the coffin.