Leader: Technocrats take over

EUROPE’S intractable fiscal deficits have now bred a new liability: a democratic deficit.

The need to respond to markets with urgent action has seen the emergence of a new type of government headed by technocrats who have, at best, a tangential relationship with electorates. In Greece, the cradle of democracy, the new prime minister is Lucas Papademos, who has never been elected by anybody. As governor of the Bank of Greece he was one of the key operators who massaged the economic statistics to certify that Greece qualified for admission to the Eurozone – with consequences the world is now experiencing. To promote one of the creators of the current crisis to preside over finding a solution might seem perverse. Its nearest Scottish parallel would be if Alex Salmond were to step down and hand the government over to Sir Fred Goodwin.

In Italy, too, the departure of Silvio Berlusconi – in other circumstances a cause for celebration – has been choreographed to ensure the succession of Mario Monti, who last week was appointed a senator-for-life in preparation for his new role as prime minister. Critics of recent British governments for importing ministers with alleged specialist expertise into office via the House of Lords should note the phenomenon is not unique to this country. Both his appointment and that of Papademos might be excused on the grounds that any nation, in an acute emergency, has a right to draft into service leaders whose talents are peculiarly suited to resolving the crisis. But there is more to this development than answering a nation’s needs. The signs are that Messrs Monti and Papademos were promoted to office more at the behest of EU leaders and financial controllers than their respective electorates.

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It is difficult to avoid the impression that Brussels, which these days may sometimes seem like a euphemism for Berlin, is putting in its own receivers to manage basket-case economies. Until last year, Monti had spent nearly a decade as a European commissioner. Papademos was vice-president of the European Central Bank from 2002 to 2010; now it looks as if he has been posted as manager of its Athens branch.

The reality is that the future of the 17 Eurozone countries and, by extension, much of the economic destiny of the other ten EU member states and the wider world is being determined by the heads of the IMF and the ECB, whose common characteristic is a complete absence of any democratic mandate. Brussels eurocrats might sneer at the notion of consulting Greek fishermen or Italian farmers about the intricacies of bond yield spreads and quantitative easing, but there are obvious perils in going down that road.

The history of the EU and its bureaucracy has bred a mindset in which notions of electoral accountability are often secondary. Now the fiscal destiny of Europe is in the hands of a German economist at the ECB, whose decisions on quantitative easing, bond purchases, etc will affect an entire continent. When he makes those decisions, the one factor he is unlikely to take into consideration is the view of national electorates. The same applies to Christine Lagarde, managing director of the IMF.

President Barack Obama recently called on Europe to get a grip on its finances, but there is no coherent decision-making process. The question is: how long will the electorates of Europe accept government by diktat, emanating from unaccountable bodies and individuals, but crucially affecting their own jobs, homes and quality of life? So far there is mostly grudging acceptance, but if technocracy were to fail, after sidelining democracy, the backlash could be ferocious. Even this grave crisis does not justify the mothballing of democracy.

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