Adrian Hamilton: The democratic deficit at the heart of the crisis

World View

Adrian Hamilton
Thursday 10 November 2011 01:00
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It's not often that the Chancellor, George Osborne, gets anything right, but for once he was correct when he told the meeting of his fellow EU finance ministers this week that political changes in Greece and Italy did not address the kernel of the financial crisis.

Indeed, in many ways they are an excuse for not addressing it. George Papandreou may resign, Silvio Berlusconi may say he will go (no one trusts him even to do that) but the fundamental democratic problem of markets and leaders demanding cuts opposed by the people remains as stark as ever. Even starker once you remove the premiers from the picture and get down to talking of unity governments and non-political leadership which can only widen the gap between the people and their rulers.

Not that the democratic deficit was what George Osborne was referring to. No, what Osborne meant when he referred to the finance ministers as "we" was actually "they". It was up to the eurozone countries to get their act together. Britain was not going to help them although it acknowledged that its own future was now tied up with the travails of the euro members.

Having lectured them on that, the Chancellor spent most of the meeting batting away demands for a financial transactions tax on the grounds that, while it was a good idea in principle, in practice EU proposals would adversely affect the City. Which is precisely the political conundrum of this crisis.

On the one side are the countries which might be able to help but are reluctant to take the necessary action because they fear their voters won't accept it. On the other side are the indebted countries being hounded by the markets whose voters have lost faith in the measures being proposed by the rich. The end result is a world in which every government is looking to its own without the will or the leadership to produce any kin d of internationally co-ordinated action.

Yet that is what is needed if the world is to break out of a vicious circle of austerity and enforced recession. Take the G20 last week. Here was a unique opportunity for the leaders of the major economies, those with surpluses and those with deficits, those with money to invest and those desperately needed sources of cash, to get together to try and boost confidence and economic activity. And what did they do? They sat around watching events in a country which wasn't even represented, Greece, and throwing up their hands saying it was up to the eurozone to sort itself out before they would do anything.

But this isn't just a problem of Greece and Italy. The US is showing no leadership because, for all his talk of reflation, President Obama is hamstrung by a Congress bent on seeking party advantage before the presidential elections next year. Chancellor Merkel in Germany and President Sarkozy in France face the same problem, forcing them both to look to their own.

The leadership of China is also due to change, putting power for the first time into the hands of a generation brought up under the one-child family policy. India's Prime Minister has become something of a broken reed unable to act outside the domestic concerns of his country. And, here in Britain, David Cameron can no longer act on European affairs because of his backbenchers.

Of course, in these circumstances there is a cry for unity governments run by technocrats – as discussed in both Greece and Italy at the moment. The markets, as other governments, would love something more predictable than the messiness of politics. But messiness is what democratic politics are about. If we are to square the circle of market demands and popular acceptance then it can only be achieved if austerity is accompanied by measures for growth. And that demands leaders to lift their eyes and join in actions which may be against their electoral interests. It's called leadership.

The plight of Tibet must not be brushed aside as we seek Chinese help

A Buddhist monk burning himself to death in a Saigon square in 1963 is one of the abiding and most upsetting images of the Vietnam War. Such scenes have recently been repeated not once but nearly a dozen times in the Tibetan parts of China.

Last Thursday, Palden Choetso, a 35-year-old nun, killed herself by self-immolation in China's Sichuan Province. She was the second nun to do so and the 11th Tibetan to act in this peculiarly terrible way this year.

This is more than an act of political protest – it's a cry of desperation by a people brutally oppressed by the Chinese authorities. So far, most of the news coming to the West has been about the narrower region of what is now called Tibet. But these suicides are taking place in the Ganzi area where Tibetans have been made the subject of a particularly savage crackdown.

The West is not going to intervene. One of the most depressing comments from the G20 last week was the suggestion that the price of Chinese assistance to the euro would be silence on human rights. But the plight of the Tibetans cannot be allowed to just disappear in deliberate ignorance. Western leaders must keep referring to it in their talks in China and the public must keep making certain that they do.

a.hamilton@independent.co.uk

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