Planned austerity and the erosion of democracy

 

austerity

austerity (Photo credit: 401(K) 2012)

Board of Governors - International Monetary Fu...

Board of Governors – International Monetary Fund (IMF) (Photo credit: Wikipedia)

This is my last blog  for a while on the subject of planned austerity. Over recent weeks, I have been engaging in an open,  three-way, debate with Rodney Willett and John Gelmini.

The latest thoughtful blog came from Rodney entitled:

More on planned austerity 

It has been a strange debate because increasingly our views are converging that there is currently a major problem with all the political parties, measured against what I described as the gold standard for political leadership, namely:

  • Strong leadership
  • Overarching vision
  • Coordinated and carefully analyzed strategy, and
  • Fully risked assessed, properly costed  and effectively managed delivery plans

At the margin, Rodney argues for devolution of power and localism, whereas I favour a national unity government with the power to promote growth and the strength to deal objectively, honestly and fairly with medium term austerity but in a carefully planned way. Rodney cannot envision an effective national unity Government in the UK, and I would counter that it is the wrong time for localism and further devolution of power.

Whilst, I respect the intellectual and philosophical arguments in favour of localism , I strongly believe that it is the wrong policy for the current crisis. Localism would seriously deflect from recovery and growth, in my view, and would inflict unnecessary pain on the young, the old and the vulnerable members of society. I favour strong central policies to promote growth.

What really worries me about uncontrolled austerity is the erosion of democracy. Look at what has happened in Greece, Italy and Spain in the last two years. Democratically elected Governments have had to give way to powerful, un-elected global forces, like the troika of the IMF, EU and the ECB.  Increasingly, democracy is seen as an impediment to solving the Euro crisis, for example. In Germany’s case, however, there is a powerful backstop, the Constitutional Court which can step in a protect the interests of ordinary people. On the other hand, most of the real solutions being proposed to counter the systemic weaknesses of the Euro favour increased regulation but at the cost of national sovereignty, and more critically democracy.

Over the last two years, I have argued extensively in this blog against simplistic policies of austerity, bacon-slicing or top-slicing Public Sector budgets, so that cuts fall largely on front-line services.

Returning to the UK, look at loss of democracy and power that has been transferred to the EU and its vast bureaucracies, as another example. Surely, the UK people should have a referendum on repatriating powers back to Westminster?

I am a passionate believer in democracy. Earlier in the year, I was fortunate enough to visit the Austrian Parliament building which I would thoroughly recommend. As you enter the building, there is a stunning display of neo-classical Greek architecture, featuring the pillars of ancient Greek democracy. I saw that other visitors were quick to see the irony with modern Greece and the current Austrian Government.

At this point, I would expect, John Gelmini to intervene and cite the Bilderberger conspiracy. Personally, I hope that there is no Bilderberger conspiracy but what really worries me is the erosion of democracy.

This is my last post on this theme but would welcome views from Rodney, John and others.

 

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4 responses

  1. Pingback: Radical reform of PFIs – John Gelmini « Dr Alf's Blog

  2. Pingback: How Europe’s New Gold Standard Undermines Democracy – Matthias Matthijs – Harvard Business Review « Dr Alf's Blog

  3. Hi Alf,
    As to the Bundesverfassungsgericht: I admit it has quite a bit of power, and I’m happy we have that institution in Germany, but in the present monetary crisis and the so-called “solutions” to it suggested by Draghi, there’s – as far as I know – no way they can stop the measures planned/discussed in the ECB.
    Best regards,
    Pit

    • Hi Pitt, thanks for the clarification. It will be interesting to hear the court’s decision in a few weeks but I agree, in practice, the ECB Will probably push-on.

      Best regards
      Alf

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