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Democracy vs. Bailout

April 7, 2014

Published in ‘New Europe’ Print and Digital Editions

BailoutThe eurozone crisis that began in 2009 led several EU economies under the direct control of the troika, a multi-national organ made up of the European Commission, the European Central Bank, and the International Monetary Fund. Meeting the troika’s conditions is imperative in order to receive financial aid from the European Stability Mechanism, a fund specifically set up to stabilize the ailing eurozone countries. As a result, national governments voluntarily abandoned part of their sovereignty in order to satisfy the requests of their creditors, while the entire functioning of national administrations became subordinated to the approval of the troika.

All of this is widely known, and decided by the EU governments. However, is the situation clear to European citizen? Especially, the implications of the bailout system to the functioning of democratic institutions? To this effect, a good example is the recent voting of a ‘multi-law’ passed before the Greek Parliament a week ego.

Greece has been negotiating for months with the troika in order to get the last 8.3 billion euro tranche of the current bailout programme from its EU and IMF creditors. Previously, an OECD report, ordered by the Greek government, recommended to lift around 500 structural obstacles in order to liberalize the Greek economy, ranging from suppressing barriers to entry in milk imports to facilitating access to partially restricted professions, to totally freeing employee layoffs. Some of the proposed measures were neutral, while others (such as the definition of ‘fresh milk’) could lead to the destruction of a whole sector of the economy. After a period of heated internal debates with union representatives and several strikes, the government decided to end this issue, given that the troika started to lose its patience, and the final tranche of the bailout programme was really needed. So, on Friday 28 March, the new bill was introduced in the Parliament, under an ‘urgent’ procedure, to be voted by next Sunday.

Practically speaking, a 200-page text, full of references to previous laws and regulations, that a human brain would need several weeks to read, understand, annotate, and comment was put to the vote in just two days. More to this, the hundreds of new regulations and amendments to previous laws were structured in just two articles, in such a way that a member of parliament could say ‘yes’ or ‘no’ in bulk, thus preventing any real discussion on the many intriguing reforms brought by the bill. What type of reforms? One would affect the very existence of thousands of pharmacies, another could erase a whole branch of agriculture… Many of these changes were probably necessary, but their effect on so many human lives are so drastic that at least they would merit a serious debate. Not to mention a decision to keep real estate tax evaluations at unrealistically high levels up to 2017 — a measure that has already killed real estate transactions and is viewed by many as illegal, but was imposed by the creditors in view of collecting more money from transaction taxes.

What happened with this bill was a bitter confrontation with the opposition, which left the session after unsuccessfully trying to introduce a non-confidence motion, and a ‘disciplinary’ voting of the bill by the government coalition members; that is, a vote under the threat of disciplinary measures. Only Mr. Nikitas Kaklamanis, a prominent member of the conservative party and former mayor of Athens refused to vote for the bill; he was immediately, seconds after his refusal, expelled from the party by the prime minister himself, in a spectacular gesture of authoritarianism. In the same way, the former prime minister Mr. George Papandreou voted against the bill, but was not expelled from his party, as this would have endangered the very existence of a government coalition. He was just insulted from other party members.

Finally the bill passed, the bailout tranche was released, and (nearly) everyone was happy; including the leading Eurogroup politicians who visited Athens for an EU meeting the next days. It is clear that being under bailout is not an easy situation; the stakes are high for the whole eurozone, and no mistakes are permitted. Nor are democratic sensibilities. But are the peoples of Europe fully aware of such situations? And do they really agree with their handling by EU leaders? These are some interesting questions to ask in view of the coming European elections in May.


From → Views & Opinions

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