Earlier this week, Debating Europe put several of your comments to Olli Rehn, the EU Commissioner for Economic and Monetary Affairs and the Euro. One of those comments came from a reader in France, Rémi, who argued that: “The main problem of the euro is the strong dependence on financial markets.”
On the one hand, it’s true that most (if not all) European economies are extremely vulnerable to the whims of the financial markets right now. On the other hand, this fact didn’t seem to trouble Italian voters when they turned out in massive numbers to support Beppe Grillo’s anti-austerity Five-Star Movement in elections last month. Does it matter that Italy is stuck in political gridlock precisely as the eurozone crisis threatens to reignite? Should voters have maybe considered more carefully the impact of their vote on Italy’s borrowing rates? Or does this sort of calculation completely undermine democracy?
We spoke to Niccolò Rinaldi, an Italian MEP and Vice-President of the liberal ALDE Group in the European Parliament, about the situation in Italy and about the impact of the eurozone crisis on democracy in Europe. We started with a comment sent in from Effie, who argued that the crisis was forcing an end to the traditional ‘centre-left’ versus ‘centre-right’ division in politics: “The Italian elections, as well as the Greek elections, show that the cooperation of the right and left has become a necessity for further progress…“
Well, I don’t agree with Effie. I think that the ‘grand coalition’ we have seen over the last year between left and right in Italy [under the Monti government], first, did not really enable the country to adopt the required reforms. Secondly, it created quite a gap between the establishment on one side and citizens on the other.
Citizens need to make a choice between a clear progressive centre-left agenda and, on the other hand, a right-wing – possibly also reformist – agenda. The mixture of the two will only create further confusion…
On that note, we had a comment sent in from Eusebio, who predicted that the left and right will anyway be unable to form a coalition, and that Italy will be forced to hold another election in the coming weeks.
Well, I agree that it’s quite likely we will need to have fresh elections; not really in a few weeks, but maybe in a year’s time. First, though, Italy will need to pass a new electoral law, because the current instability is a consequence of the existing, over-complicated law which has one system for the lower chamber and another for the upper chamber. There might be enough room for manoeuvre to find a new electoral law before fresh elections are held.
Italy will probably also need to pass a number of laws supported by both the left and the right to try to stabilise the markets, and these will include passing a new budget. But I cannot really see a long-term (or even a medium-term) agreement between the left and right. This means we will need fresh elections and that will, of course, imply further turmoil in the market.
The issue of the markets and their impact on democracy is an important one, and we have to be very careful here. We have already experienced these issues in 2011, and we cannot play with democracy with threats from the markets. Grand coalitions between left and right may seem tempting, but the result is still instability. If we manage to put in place a good electoral law, then the result will be much more preferable for Europe and for the markets: to have a full, legitimate majority, either of the left or the right.
To get another perspective, we also spoke to Pierre Wunsch, Director of the National Bank of Belgium. We asked him whether voters should care what the markets think, or whether this kind of logic has a negative impact on democracy:
Let me put it this way: national politics are here to stay, and we need to get used to the idea that electoral results may not be what we would like to see from Brussels. We may like what Mario Monti did a lot, but Mario Monti received only 10% of the vote, and we have to live with the constraints coming from national democracies.
Sometimes we are faced with developments that we would not have preferred, but there is no point in complaining. Today it is Italy, tomorrow it might be another country. People know what they feel, and they need to have a way to express their frustrations. Sometimes we may feel they express it in a way that is not going to help, but we need to hear that.
Finally, we asked the same question to Thierry Philipponnat, Secretary General of Finance Watch, an NGO set up in 2011 as a “counterweight to the private interest lobbying of the financial industry.“
I think democracy and politics should not be subordinated to financial markets. What voters should take into account is the credibility of the politicians they are voting for. Are they voting for political forces that have a proper plan that fits their vision of the way society should be organised?
What I find very worrying – and this may be the case in Italy – is a growing trend of voters rejecting the usual political forces. This is happening because many political forces do not tackle the important things that citizens care about, and voters realise this and are angry.
What do YOU think? Should voters care what markets think? Or does this sort of calculation completely undermine democracy? And what has been the impact of the eurozone crisis on democracy in Europe? Let us know your thoughts and comments in the form below, and we’ll take them to policy-makers and experts for their reactions.