November 17, 2011 10:43 pm
One professor to another: listen to the people, or fail
After economic default comes political default. Politicians in Greece and Italy have failed. Now it’s the technocrats’ turn.
Having been pummeled by the bond markets and disgraced by their own intrigues, the Greek political class has turned to Lucas Papademos while the Italians have turned to Mario Monti. Both are skilled and reputable economists, but a sceptic can be forgiven for asking: why should ordinary citizens trust them?
Both belong to the class of bankers and economists who dropped Europe into this mess in the first place. Both occupied commanding positions in European Union institutions that winked at a decade of Greek and Italian lies about their public finances. So why then are Greece and Italy turning to Eurocrats to pull them out? Because no one else has any authority left.
Technocrats are supposed to have the mysterious authority of being above politics. But there is no “above politics”. The crisis is political all the way through.
The problems both countries face are not technocratic. The measures that must be taken are obvious enough: regain control of public finances, restart demand and make the two southern economies competitive again. The problem is political: how to push a reluctant bureaucracy to reform itself, how to corral parliamentarians into voting for tax increases, and how to persuade a hard-pressed people that the proposed sacrifices are fair and that there is light at the end of the tunnel.
As Greece has shown, if you can’t persuade people that austerity is fair, a country can become ungovernable. This is now the issue in southern Europe.
Mr Monti and Mr Papademos have to restore governability but neither has much political legitimacy. Neither came into office as a result of a popular vote, and if the technocrats fail, the political class will resume power saying “I told you so”. If the technocrats succeed, the political class will take the credit. Either way, the politicians think they will win and lead their countries back to their bad old ways.
Time is of the essence and neither man has much time. They will be opposed at every turn by public sector workers, employers and the bond market. These interests will try to wait them out or, failing that, drive the hardest possible bargain for their support.
Both men cultivate their “above politics” image, but both are wily enough to know what they are up against. In a speech in Washington in April, Mr Papademos said the chief problem in Greece was not choosing an economic remedy but implementing it across the board.
The two leaders are counting on the inexorable facts of crisis to compel the public to support their austerity agendas. But while facts are stubborn things, they are not obvious. Greece and Italy would not be in the state they are in if the facts spoke for themselves. It will take immense political skill to persuade southern Europe that the facts are the facts.
Economic crisis has shown up, once again, the democratic deficit at the heart of the European project as a whole. The eurozone’s elected political class failed, for more than a decade, to tell voters what a common currency would cost. No politician dared to explain to the Greeks or the Italians, let alone Germans, the truth. The truth was that Italy and Greece were not competitive and were paying themselves more than they could afford. The German people were not told that a currency union transfers political and economic cost from profligate states to prudent ones like their own.
Mr Monti and Mr Papademos believe they can afford to tell their people the truth because, unlike politicians, they do not have to face an election. But repairing Italy and Greece will take a long time and, for that longer haul, technocratic legitimacy will not be enough. After half a century of the European experiment, political legitimacy remains what it is in every democracy: incorrigibly national, local and political.
It must be earned at the ballot box. Turning to experts to solve problems of legitimacy and consent is a sign, not of strength, but weakness. After Mr Monti and Mr Papademos, Europe will need elected politicians who earn their legitimacy the hard way, by telling the people the truth.
For the moment, it is a good sign that Mr Monti is being called “the professor”. It’s an indication that the people want him to succeed. Having been a professor myself and having done my time in politics, I would offer only one piece of advice: convince your people that you are doing this not for the banks, not for Europe, not for the bond market, but for them, your fellow countrymen and women. Remember they, not the bond market or the European Union, have the ultimate power. If they believe you are on their side, you can succeed. If they believe you are not on their side, you will fail and they can make your country ungovernable.
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The writer is a former Canadian politician now teaching at the University of Toronto
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Copyright The Financial Times Limited 2011.
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