Europe’s Illiberal Establishment

On March 25, Europe’s leaders convened in the birthplace of the “European project” to celebrate the 60th anniversary of the Treaty of Rome. But what exactly was there to celebrate?

Were they reveling in Europe’s disintegration, which they now call “multi-speed” or “variable geometry” Europe? Or were they there to applaud their business-as-usual approach to every crisis – an approach that has fanned the flames of xenophobic nationalism throughout the European Union?

Even dyed-in-the-wool Europhiles admitted that the Rome gathering felt more like a wake than a party. A few days later, British Prime Minister Theresa May sent her letter to the EU formally triggering the United Kingdom’s slow but irreversible exit.

The liberal establishment in London and around the continent is aghast at how populism is tearing Europe apart. Like the Bourbons, they have learned nothing and forgotten nothing. Not once did they pause for critical self-reflection, and now they feign shock at the legitimacy gap and the anti-establishment passion that threatens the status quo and, consequently, their authority.

Back in 2015, I often warned Greece’s creditors – the crème de la crème of the international liberal establishment (the International Monetary Fund, the European Commission, the European Central Bank, German and French officials, and so on) – that strangling our new government in its cradle was not in their interest. If our democratic, Europeanist, progressive challenge to permanent debt bondage were snuffed out, I told them, the deepening crisis would produce a xenophobic, illiberal, anti-European wave not only in Greece but across the continent.

Like reckless giants, they did not heed the omens. Greece’s brief rebellion against permanent depression was ruthlessly suppressed in the summer of 2015. It was a very modern coup: EU institutions used banks, not tanks. Unlike the coups that overthrew Greece’s democracy in 1967 or Czechoslovakia’s Prague Spring a year later, the usurpers wore suits and sipped mineral water.

The official version of these events was that the EU was obliged to intervene to force a wayward population back to the path of fiscal rectitude and structural reform. In reality, the coup leaders’ main concern was to avoid admitting what they had been doing since 2010: extending a generalized bankruptcy into the future by forcing Greece to accept new, European taxpayer-funded loans, conditional on ever-greater austerity that could only shrink Greek national income further.

The only way to continue doing this in 2015 and beyond, however, was to push Greece deeper into insolvency. And that required crushing our Greek Spring.

Interestingly, the surrender document forced upon Greece’s prime minister, and approved by Parliament, was phrased as if it had been written at the request of the Greek authorities. Like Czechoslovakia’s leaders in 1968, forced by the Kremlin to sign a letter inviting the Warsaw Pact to invade their country, the victim was required to pretend that it had requested its punishment. The EU was only responding kindly to that request. Greece experienced collectively the treatment Britain’s poor receive when they claim benefits at Job Centers, where they must accept responsibility for their humiliation by affirming condescending platitudes such as: “My only limitations are the ones I set for myself.”

This punitive turn on the part of the European establishment was accompanied by the loss of all self-restraint. As Greece’s finance minister, in early 2015, I learned that the salaries of the Chair, CEO, and members of the board of a public institution (the Hellenic Financial Stability Facility [HFSF]) were stratospheric. To economize, but also to restore fairness, I announced a salary cut of around 40%, reflecting the average reduction in wages throughout Greece since the start of the crisis in 2010.

The EU, usually so keen to shrink my ministry’s outlays on wages and pensions, did not exactly embrace my decision. The European Commission demanded that I reverse it: after all, these salaries went to functionaries selected by EU bureaucrats – people they considered their own. After the EU forced our government into submission, and following my resignation, those salaries were raised by up to 71% – the CEO’s annual pay was bumped to €220,000 ($235,000). In the same month, pensioners receiving €300 per month would have their monthly benefits cut by up to €100.

Once upon a time, the liberal project’s defining feature was, in John F. Kennedy’s stirring words, the readiness to “pay any price, bear any burden, meet any hardship, support any friend, oppose any foe, in order to assure the survival and the success of liberty.” Even neoliberals, like Ronald Reagan and Margaret Thatcher, strove to win hearts and minds, to convince the working class that tax cuts and deregulation were in its interest.

Alas, following Europe’s economic crisis, something other than liberalism, or even neoliberalism, has taken over our establishment, seemingly without anyone noticing. Europe now has a highly illiberal establishment that does not even try to win over the population.

Greece was just the start. The repression of the Greek Spring in 2015 led the left-wing Podemos party to lose its momentum in Spain; no doubt many of its potential voters feared a fate similar to ours. And, having observed the EU’s callous disregard for democracy in Greece, Spain, and elsewhere, many supporters of Britain’s Labour Party went on to vote for Brexit, which in turn boosted Donald Trump, whose triumph in the United States filled the sails of xenophobic nationalists throughout Europe and the world.

Now that the so-called liberal establishment is feeling the nationalist, bigoted backlash that its own illiberalism brought about, it is responding a little like the proverbial parricide who appeals to the court for leniency on the grounds that he is now an orphan. It is time to tell Europe’s elites that they have only themselves to blame. And it is time for progressives to join forces and reclaim European democracy from an establishment that has lost its way and endangered European unity.

Copyright: Project Syndicate 2017 Europe’s Illiberal Establishment