The Politics of Fear

My recent experience in dealing with the financial crisis in Greece and in Europe has confirmed my belief that this is a political crisis more than a financial one. In trying to confront its fiscal deficit, Europe has run up a democratic deficit.
This post was published on the now-closed HuffPost Contributor platform. Contributors control their own work and posted freely to our site. If you need to flag this entry as abusive, send us an email.
Members of the Greek far-right ultra nationalist party Golden Dawn (Chryssi Avghi) demonstrate outside the Turkish consulate in the northern Greek city of Thessaloniki during the visit of the leader of the Turkish ultra-nationalist group Grey Wolves, Devlet Bacheli, on 28 June, 2012. Golden Dawn has ridden a wave of anger against rampant undocumented immigration and a surge in crime, emerging as the fifth-largest party in the 300-seat parliament with 18 seats after taking nearly 7.0 percent in recent elections. AFP PHOTO /Sakis Mitrolidis (Photo credit should read SAKIS MITROLIDIS/AFP/GettyImages)
Members of the Greek far-right ultra nationalist party Golden Dawn (Chryssi Avghi) demonstrate outside the Turkish consulate in the northern Greek city of Thessaloniki during the visit of the leader of the Turkish ultra-nationalist group Grey Wolves, Devlet Bacheli, on 28 June, 2012. Golden Dawn has ridden a wave of anger against rampant undocumented immigration and a surge in crime, emerging as the fifth-largest party in the 300-seat parliament with 18 seats after taking nearly 7.0 percent in recent elections. AFP PHOTO /Sakis Mitrolidis (Photo credit should read SAKIS MITROLIDIS/AFP/GettyImages)

BERLIN -- To those who were surprised that the European Union received the Nobel Peace Prize, I say: "Think twice." This was not only a deserved award for Europe's contribution to bringing peace and stabilizing democracies in the recent past -- the Nobel Committee was also sending a clear warning to contemporary leaders. I could almost hear them saying: "On this difficult odyssey, don't abandon ship. In today's world, the EU is too valuable to squander."

It was an indirect but powerful rebuttal to the dangerous nationalist and populist rhetoric some politicians have adopted when describing the recent financial crisis.

This message couldn't have come at a better time.

Like ghosts from the past, we see political violence, xenophobia, migrants being scapegoated and extreme nationalism creeping into our public debates -- even into our parliaments. This is a Europe diverging from its founding principles. Principles that rendered nationalistic hatreds an anathema.

But it is these politics of fear that seem to have incapacitated Europe. A Europe seemingly incapable of ending this crisis, a fractious Europe. This has undermined a sense of trust between us and in our European institutions. This climate does not inspire confidence either in our citizens or the markets. Nor will our retreat into a renationalization of Europe be the solution.

My recent experience in dealing with the financial crisis in Greece and in Europe has confirmed my belief that this is a political crisis more than a financial one.

I am convinced that, with the political will, we could have avoided much pain, squelched market fears and stabilized the euro, while at the same time reformed ailing, unsustainable economies such as ours in Greece.

Despite media hype to the contrary, it is the Greek people who first and foremost have wanted this change.

Instead, we allowed fear and mistrust to overcome us. And fear begets more fear and uncertainty.

Instead of understanding, we have name-calling.

Instead of collective, transparent action by our institutions, we have moved into a mode where the community method is undermined by makeshift intergovernmental decision-making, with the balance of power tipping dangerously towards the very large member states.

Instead of real, necessary reform and fiscal responsibility, we are implementing an overdose of austerity -- dealing more with symptoms and less with the root causes of the economic woes of Europe.

Instead of rewarding superhuman efforts, we are condemned for our shortcomings.

More than anything else, it has been this political climate that has undermined our common efforts to deal with today's financial crisis.

Whether it is banks or governments, we have adopted a passive, almost defeatist, attitude, which we cloak in the language of "caution and responsibility."

It is our responsibility to break this cycle of fear and mistrust now. We are vastly underestimating our own capacities as a union. Our capacity to calm markets or create jobs. We again need to believe in the great capacity of our peoples north and south, west and east. We must rekindle the spirit that united us in 1989 when the Berlin Wall fell. We know the difficulties we then faced. But we did not cower. We decided to invest in the potential Europe and our peoples had. And there is so much hidden or untapped potential in our youth, our experience, our diversity and our cultures.

But this not simply an issue of political will. We must combine this will with an understanding of our real weaknesses. Over the decades we have become more and more interdependent in Europe. This was not by chance, this was by design -- from the days of Monnet and Schuman. It is this interdependence that has made the wars of the past unthinkable.

But if interdependence is important to keep the peace, it is not enough to make us effective, adaptive, powerful on the global scene. Neither does interdependence guarantee the democratic empowerment of our citizens and the liberation of our peoples' potential.

In fact, this interdependence today is seen by many as a straight jacket, hindering us rather than giving us the capacity to deal with new global challenges.

The debate about the breakup of the euro, or even euro-exits, is a case in point.

Our citizens, therefore, wonder whether this European structure is still useful or if we should go our own separate, independent ways. As in The Odyssey, the sirens are beckoning that we change course. However sweet their song, we know their purpose is that we crash on the shallow rocks. If we are to avoid these rocks, we need to radically rethink our governance structures and policy responses so that we capitalize on our strengths and neutralize our weaknesses.

Three fundamental principles must underpin a more progressive Europe.

First, we must strengthen Europe's institutional capacity. Priority today must be in the financial-economic sphere. The eurozone is the world's largest economy, the euro is the world's second reserve currency and on aggregate we have strong economic fundamentals; but we are not able to leverage our strengths due to weak or missing institutions. Despite significant progress such as:

- More robust fiscal monitoring;- The European Stability Mechanism;- The Six-Pack to strengthen governance and oversight; and- A broader mandate for the European Central Bank, with the recent introduction of Outright Monetary Transactions, we must go one step further.

We have already pooled our risks, now we must pool our strengths. Eurobonds and a federal banking union are vital tools to safeguard the EU from similar crises and set our economy on a more stable footing.

Second, we need to liberate and reenergize Europe's human capacity. High unemployment needs to be offset by investment in our human capital, education, research, green growth and the necessary infrastructure for green energy and a knowledge society. In our race towards competitiveness, we are emulating models that have little to do with our traditions. In many emerging markets, a lack of collective bargaining and democratic accountability, low wages, substandard working conditions and denigration of the environment combined with tax havens (which have robbed countries of huge revenues -- up to 11 billion euros per year in Greece alone) may offer a temporary comparative advantage. But in seeking growth, we cannot race to the bottom. We must base our competitiveness on quality, not inequality.

Third, we must strengthen our democratic capacity. We need innovative democratic institutions that will empower our citizens and strengthen the legitimacy of our decisions.

The EU's complex decision-making process has been an outcome of a delicate historical balance between member states. Today, however, people feel they are sidelined by these decisions. In trying to confront its fiscal deficit, Europe has run up a democratic deficit.

As we take the next steps towards European integration, we must give ownership of this process to the people. Policies imposed on citizens without their active consent are doomed to fail. Already, a frustrated, educated but unemployed younger generation is losing faith in our European institutions and values.

This vacuum has created fertile ground for populism and extremism. When our citizens feel disempowered, they will turn to saviors or target scapegoats as they do not participate through dialogue and responsible deliberation to understand and solve common problems.

Europe can regain the confidence of the markets, but first we must regain the confidence of our citizens. That is why I called for a referendum in Greece, so that people could debate and decide on their own future.

There is nothing wrong with European countries ceding sovereignty in the interest of creating a stronger Europe. (Indeed, they already have.) But as we do so, we need to rethink how our representatives in the Union are elected and how decisions are made. An EU president, elected by a European Parliament (or even a directly elected president), European-wide referenda, forms of more direct citizen participation and the use of social media are ideas already ripe to explore.

This new Europe, as I see it, will not be the product of one grandiose decision, dictated by an elite minority of powerful nations or some anonymous bureaucrats in Brussels. Small, incremental but complementary steps -- made by each of us individually and all of us together -- will build the values and the foundations for the Europe that we want.

Democracy and education will give new capacity to our citizens and that, in the end, will empower Europe and reinforce its legitimacy in our societies and around the world.

We do have a choice. Either we empower Europe and its citizens and become a catalyst for humanizing our global economy, or globalization will dehumanize our societies and undermine the European project. As a citizen of Europe, I vote for the first choice.

George Papandreou is the former prime minister of Greece. His remarks are adapted from a roundtable discussion at the Berggruen Institute of Governance recent "town hall" meeting in Berlin.

This blog is part of a series on "Europe: Beyond the Crisis," produced by The Huffington Post and the Berggruen Institute. For more information on the Berggruen Institute on Governance, visit berggruen.org.

Popular in the Community

Close

What's Hot