I mentioned a couple weeks back that I’m working through a trio of books on the common theme of the challenges facing liberal democracies, and specifically the European Union. I think this quote, from After Europe by the Bulgarian political scientist Ivan Krastev, particularly well illustrates the wicked insolubility of the Euro Debt Crisis that broke out first in Greece some eight years ago:
“In handling the rebellion from Athens, European leaders faced a stark choice. They could either allow Greece to default and thus put the common currency at risk, destroy the Greek economy, and send the message that in a political union of creditors and debtors there is no place for solidarity – or save Greece on (Greek Prime Minister Alexis) Tsipras’s terms and thereby signal that political blackmail works, inspiring populist parties across the continent.
Faced with the dilemma, European leaders identified a third option: to save Greece on such Draconian terms that no other populist government would ever be tempted to follow its example. Tsipras is now the living demonstration that there is no alternative to the economic policies of the European Union.
Krastev calls it “the victory of economic reason over the will of the voters” and writes that “For the common European currency to survive, voters of debtor nations must be deprived of their right to change economic policy despite retaining a capacity to change governments,” and that this is not democracy. He contends that
“a political union capable of backing the euro with a common fiscal policy cannot be accomplished as long as EU member states remain fully democratic. Their citizens will just not support it.”
So the choices are democracy or the common currency, but not both. It’s hard for me to find fault with his analysis. No wonder Krastev called his book “After Europe.”