John Kampfner: Greece may be the epicentre – but this is a European crisis

Which politician will be brave enough to tell voters the days of abundance are over?

Share

Elections grip the imagination because they combine drama with the rare moment of public participation in politics. Few elections are as significant as yesterday's in Greece, amid dire warnings from Europe's elite that voters must continue to embrace German-imposed austerity to stave off financial collapse.

The outcome will, in the short term, have a considerable impact on the livelihoods of millions of people, not just in Greece but far beyond. Last night's early indications of an inconclusive result, with the centre-right pro-bailout New Democracy party running neck-and-neck with the radical-left anti-austerity Syriza, will only sharpen the mood of emergency. The result appeared merely to confirm the previously messy elections in May, which were seen as adding to the atmosphere of instability and fear. It is now likely to take days, if not weeks, for a new government to be formed, amid worries of a run on the banks and the need for the ECB and others to step in. As world leaders were gathering in Mexico for a G20 summit, the markets will look to them for instant reassurance, otherwise known as rhetorical sticking-plaster.

But for all the doom-laden predictions, the verdict of Greece's despondent and angry voters will not influence the longer-term historical cycle: for what we are watching is the inexorable, albeit now-accelerated, decline of a political bloc wedded to two competing economic orthodoxies, each as self-indulgent as the other. While both models appear to be at loggerheads, they are each jointly and separately responsible for the mayhem that took hold in 2008 and continues to this day.

In one corner are the disciples of unbridled free markets. With their simplistic notions of the profit motive as a driver of growth, their selective disdain for state intervention (abhorrent except when it comes to propping up casino banks), and their dogged refusal to factor in broad consequences for their actions, they have propelled Europe and the US not just to the brink of financial ruin but to social strife.

In the other corner are the myopic advocates of the high-tax, high-subsidy model, based around 20th-century notions of a bloated public sector and unsustainable welfare. In Britain, low productivity remains endemic. In France, a laughably short working week requires industrious employees to take large chunks of time off in order not to get their bosses in trouble. In Spain, over-manning was long seen as a means of guaranteeing employment.

What unites these two approaches is a sense of entitlement, particularly among the post-war, baby-boom older generation. Just as CEOs of the most powerful private-sector corporations are intensely relaxed – to coin a Mandelsonian phrase – with exponential salary rises, so public authorities have felt little remorse in awarding ludicrous bonuses and pay-offs to their friends. Doctors in the UK complain about broken promises on pensions, but did they, or anyone else in a similar position for that matter, ever wonder about the sustainability of paying people large sums lasting decades?

Underpinning both flawed practices was a consumerist feeding frenzy that took hold in the 1990s, the era of post-Communist Western political and economic hegemony, the so-called "End of History". Governments behaved recklessly, encouraging banks to encourage individuals to copy them.

In Greece, profligacy was boosted further by corruption. It was hard to resist the temptation to screw the system because pretty much everyone was doing it, led by the political and financial elite. Now that the music has stopped, as ever, the people being punished are not the ones who caused the problems to begin with.

With the recession in Greece now into its fifth year, the suffering for many is real and intense. It seems likely that the Greeks will be allowed to renegotiate parts of the bailout, but probably only at the fringes of the deal. It seems hard to imagine a time when the country will get back on its feet and when, or if, they do, it seems harder still to see the private sector producing the necessary impetus to growth. Under the straitjacket imposed by the ECB, IMF and the German government, the public sector will have nothing to offer.

Even if their medicine is far too severe, driving unemployment higher and choking growth, the German diagnosis of the original ailment is beyond dispute. The conspicuous consumption produced by the easy money of globalisation was never going to last. The more productive and less spendthrift Teutonic approach has, for all its sombreness, the merit of sustainability.

 

Austerity was always going to be hard sell, even if we were all going to be in it together. As we saw pretty much from the outset, that was not going to happen. The culprits – the bankers and their many associates – have emerged almost completely unscathed. The then Labour government in Britain had the opportunity, back in 2008-09, to punish them. Instead, ministers rolled over. The Coalition has since produced a series of reforms that are so lightweight as to be virtually meaningless.

Across Europe, the sense of dislocation is tangible. In Greece, this will be exacerbated among many by resentment at having been bullied into voting the "right way". If, after years of misery, the Greeks, and not just the Greeks, feel that ordinary people have borne the pain, while the global super-rich have got even richer, playing the currency, equities and property markets, then nobody will be surprised if political extremism takes hold.

Greece may be the epicentre of the crisis, but this is a European crisis – of greed and irresponsibility. It will take far more than bailouts and exhortations to voters to solve. What is needed is a new economic paradigm that does not depend on public- and private-sector excess. But which politician anywhere in Europe will be brave enough to tell voters that the days of super-abundance are over and that societies will have to find less materially exuberant ways of determining success? In short, this is a matter of managing decline, as fairly as possible. But that is an election slogan that nobody, whatever their views on the bailout, the euro or the Germans, wishes to hear.

John Kampfner is author of 'Blair's Wars' and 'Freedom For Sale' Twitter: @johnkampfner

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Austen Lloyd: Commercial Property Solicitor - Exeter

Excellent Salary: Austen Lloyd: EXETER - A great new opportunity with real pot...

Austen Lloyd: Senior Private Client Solicitor - Exeter

Excellent Salary: Austen Lloyd: EXETER - An outstanding senior opportunity for...

Sauce Recruitment: Retail Planning Manager - Home Entertainment UK

salary equal to £40K pro-rata: Sauce Recruitment: Are you available to start a...

Ashdown Group: Front-End Developer - London - up to £40,000

£35000 - £40000 per annum: Ashdown Group: Creative Front-End Developer - Claph...

Day In a Page

Read Next
 

Errors & Omissions: When is a baroness not a baroness? Titles still cause confusion

Guy Keleny
 

CPAC 2015: What I learnt from the US — and what the US could learn from Ukip

Nigel Farage
HIV pill: Scientists hail discovery of 'game-changer' that cuts the risk of infection among gay men by 86%

Scientists hail daily pill that protects against HIV infection

Breakthrough in battle against global scourge – but will the NHS pay for it?
How we must adjust our lifestyles to nature: Welcome to the 'Anthropocene', the human epoch

Time to play God

Welcome to the 'Anthropocene', the human epoch where we may need to redefine nature itself
MacGyver returns, but with a difference: Handyman hero of classic 1980s TV series to be recast as a woman

MacGyver returns, but with a difference

Handyman hero of classic 1980s TV series to be recast as a woman
Tunnel renaissance: Why cities are hiding roads down in the ground

Tunnel renaissance

Why cities are hiding roads underground
'Backstreet Boys - Show 'Em What You're Made Of': An affectionate look at five middle-aged men

Boys to men

The Backstreet Boys might be middle-aged, married and have dodgy knees, but a heartfelt documentary reveals they’re not going gently into pop’s good night
Crufts 2015: Should foreign dogs be allowed to compete?

Crufts 2015

Should foreign dogs be allowed to compete?
10 best projectors

How to make your home cinema more cinematic: 10 best projectors

Want to recreate the big-screen experience in your sitting room? IndyBest sizes up gadgets to form your film-watching
Manchester City 1 Barcelona 2 player ratings: Luis Suarez? Lionel Messi? Joe Hart? Who was the star man?

Manchester City vs Barcelona player ratings

Luis Suarez? Lionel Messi? Joe Hart? Who was the star man at the Etihad?
Arsenal vs Monaco: Monaco - the making of Gunners' manager Arsene Wenger

Monaco: the making of Wenger

Jack Pitt-Brooke speaks to former players and learns the Frenchman’s man-management has always been one of his best skills
Cricket World Cup 2015: Chris Gayle - the West Indies' enigma lives up to his reputation

Chris Gayle: The West Indies' enigma

Some said the game's eternal rebel was washed up. As ever, he proved he writes the scripts by producing a blistering World Cup innings
In Ukraine a dark world of hybrid warfare and murky loyalties prevails

In Ukraine a dark world of hybrid warfare

This war in the shadows has been going on since the fall of Mr Yanukovych
'Birdman' and 'Bullets Over Broadway': Homage or plagiarism?

Homage or plagiarism?

'Birdman' shares much DNA with Woody Allen's 'Bullets Over Broadway'
Broadchurch ends as damp squib not even David Tennant can revive

A damp squib not even David Tennant can revive

Broadchurch, Series 2 finale, review
A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower: inside the mansion of Germany's 'Bishop of Bling'

Inside the mansion of Germany's 'Bishop of Bling'

A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower