Who is accountable to whom? The question is pivotal to the running of any organisation. And an organisation is in trouble whenever the answer is: “Well, it’s all a bit complicated.” That is currently the answer in relation to some of the UK’s publicly funded institutions. More immediately worrying, it is also the answer in relation to the entire eurozone.
The Greek crisis is as much to do with accountability, democracy and responsibility as it is about economics. In January, Greece elected a government “opposed to austerity”. The new Prime Minister, Alexis Tsipras, had a theoretical mandate to renegotiate the package imposed on his country by leaders in Berlin and Brussels. But as the new Prime Minister he continued to need their financial support. So to whom is he accountable? The voters who propelled him to a historic victory or Angela Merkel and the ECB? As he and we are discovering, unsurprisingly, “Well, it’s all a bit complicated”.
Tsipras might have given the impression during the election that he was a potential leader who could act almost unilaterally in relation to economic policy. Who can blame him? General elections are parochial affairs where leaders seem titans. In the recent UK election, the rest of the world did not get much of a look in, as if Britain operated independently of the global economy.
Cameron and Osborne had a “plan”. Miliband claimed to have a “better plan”. But of course even as a newly elected PM on a honeymoon, Tsipras had no space to act unilaterally to implement his plan. His creditors continued to impose conditions in the form of sweeping cuts and reforms.
Who is more powerful? The Greek voters who can remove a government from power at an election, not least for failing to stick to promises on the economy? Or is it the ECB and the German government who at any moment can pull the plug on further deals and cause even greater chaos?
However, Merkel and other eurozone leaders have conflicting responsibilities too. There are limits to the patience of Merkel’s electorate in Germany as she asks them, in effect, to pay to keep Greece afloat while the Greek government refuses to accept demands for reforms and cuts – the ones that Greek voters opposed at the ballot box.
But Merkel is committed to the eurozone, a project of considerably higher importance at the moment than the current demands on her from David Cameron. Indeed, she must be exhausted as leaders to the left and the right of her play up. Above all she must keep those who vote for her in her sights. And they are in Germany, not in Greece – or in Portugal or Spain, the other two countries hanging on precariously.
Eurosceptic Tory MPs
Eurosceptic Tory MPs
1/7 Owen Paterson
Formerly a cabinet minister, Owen Paterson is now free to make his opinion known on the backbenchers. On the subject of Europe, he does so regularly – claiming recently that the EU referendum was “rigged” in favour of staying in
2/7 John Redwood
A longstanding eurosceptic, Mr Redwood warned last year that businesses that spoke out in favour of EU membership would be punished at the check-outs by anti-EU
3/7 Bill Cash
Awkward squad rebel Bill Cash said last year that he thought the EU had become an undemocratic, German-dominated project. “An increasingly assertive German Europe is at odds with British national interests,” he wrote in the Daily Telegraph
4/7 Philip Davies
From the Conservative party’s hard right wing, Philip Davies has been a longstanding critic of the EU. He founded the Better off Out campaign and is so eurosceptic that Ukip decided not to stand a candidate against him in 2010 because they agreed with him
5/7 Nadine Dorries
Outspoken Tory MP Nadine Dorries has previously advocated an alliance with Ukip. At the height of the Greek crisis in 2013 she said that the EU was “dying on its feet”
6/7 Liam Fox
The former defence secretary is a central figure on the right wing of the Conservative party. He’s long put pressure on David Cameron over EU negotiations
7/7 Zac Goldsmith
A socially liberal eurosceptic, Goldsmith was one of the founding members of the People’s Pledge campaign to get MPs to sign up for an EU referendum. His father ran the Referendum Party, a precursor to Ukip
The voters in various parts of the eurozone are both powerful and impotent – as well as holding quite often contradictory views that exhausted leaders must seek to reconcile. German voters are angry at the cost of maintaining the current eurozone, yet on the whole want it to survive intact. From a different perspective, this is still the majority view in Greece. Most voters want to be part of the euro, yet are riled by the constraints imposed by governments or a European Central Bank they did not elect.
Outside the eurozone, the gap between what some governments hope to do and can do in reality can be wide. In the UK it was said of a potential Labour government that if it put up taxes on high earners there would be less revenue. The money or the high earners, sometimes both, would move elsewhere. George Osborne was re-elected with his plan to move the British economy into surplus, although I suspect his party was elected in spite of this particular objective. Nonetheless, Osborne is not fully in control of this or his country’s fate. A crisis in the eurozone arising from the exit of Greece would impact on the UK. Only UK voters can vote in or out Osborne and his colleagues, but the impact of the Conservative government on the UK economy will be determined partly by what happens elsewhere in the global economy.
Such blurred lines of accountability and responsibility in the UK are nothing compared with those in the eurozone. Monetary union was largely the vision of German and French leaders in the late 1980s and early 1990s who also sought political union in an EU with a relatively small number of members. The original criteria for joining the euro, as agreed in the Maastricht Treaty, were strict. In his early Budgets, Gordon Brown used to joke that his borrowing and spending were “well within the Maastricht criteria”. They were, contrary to the recent misleading orthodoxy that Brown was a reckless borrower. Part of the joke was that he had no intention of joining the euro. In contrast, countries miles away from meeting the Maastricht criteria joined the single currency.
The ambiguities about accountability in the eurozone are deliberately unresolved. To move towards resolution would involve big decisions and massive changes in the political culture of individual countries. Above all there can no longer be an assumption or pretence in any eurozone country that its elected leaders are in near full control of their economy.
Equally, the more powerful members must accept that they have responsibilities for the weaker ones as if they were part of their own country. Greater political integration is inevitable even if voters in one country cannot remove mighty leaders or dissenting ones from another.
The only other option is for restive countries to pull out of the eurozone. No one seems keen on this route and yet the political implications of varying countries being part of a single currency have still not been fully thought through. And until they have, it is crazy for the UK to hold its referendum on EU membership. But then again the staging and timing of the referendum has little to do with democracy or accountability either.