Given the choice between the opinion of resident Times economist Daniel Finkelstein and that of Cyrus Engerer on the current “wave of change” hitting Europe and the wider world I should be forgiven for opting for the former. It is an undeniable fact that popular sentiment lies closer to Cyrus Engerer’s way of thinking – that there is a social-democrat/socialist/progressive wave of change that is rejecting austerity and that has some plan to rebuild Europe through jobs and competitiveness. Or something like that.
I chose Cyrus simply as an example. His sentiments echo clearly those of many other “anti-austerity” hopefuls – and not just in Malta. Here is Cyrus posting on facebook commemorating Europe Day (my translation):
This year Europe Day has a more important meaning where we are watching Europe that has for a bit over ten years been practically run by conservative parties. Last year Denmark chose the Social-Democrat party, France did the same last Sunday and it seems that Social-Democrat parties have begun to win local and regional elections in many countries (Germany, Malta, United Kingdom). The call for the leftist parties is one of hope, progress and growth thanks to investment in youth, education and work instead of austerity. What do you think?
Well I think that Cyrus is confused about the real drive behind the votes. His activism within Malta’s Labour party, a party that is eager to jump onto what seems to be a progressive bandwagon might have much to do with this and he cannot be blamed for this bit of predictable rhetoric. On the other hand the current political situation merits a deeper analysis than the simple explanation of a pendulum switch from conservative to socialist (&c.).
I believe that this is not really a positive vote in favour of some progressive (or socialist or social democrat) pan-European movement but a negative vote against austerity. Cyrus omits to mention, for example, the administrative elections in Italy which were not exactly a success for the Partito Democratico – the largest leftist movement in Italy. Instead, the administrative elections produced a surprise result with the popularity of the Grillini (Movimento Cinque Stelle) best described as the anti-establishment party. Beppe Grillo – the movement’s founder described the success of his Movimento in this manner:
Qui siamo veramente a un cambiamento epocale di pensiero della politica. I cittadini votano se stessi. Stiamo avendo successo. Questo è solo l’inizio. Dalla rigenerazione di cui parlava il nostro presidente della Repubblica, siamo passati alla liquefazione. La destra, il Pdl, il centro: non c’è più nulla. Si stanno liquefacendo in questa diarrea politica. Finalmente i cittadini si riappropriano delle istituzioni perché sono le istituzioni.
Grillo’s analysis centres on the rejection of the current political establishment – the liquidation of the standard political system. Though not far from the truth, Grillo’s reading of the signs is also “egoistic” in political party terms. We could acknowledge “positive” voting for the grillini but then again the message of “ousting” the political establishment is much stronger and larger than the Grillo reality. For that we have just to look at the Le Pen vote in France. Once the first round of presidential elections was over and the options were red or blue we did not really witness the landslide rejection of Sarkozy and the tsunami of progressive votes that many had predicted. Hollande and his progressive growth promises just about scraped through.
Yes, socialist and labourite parties across Europe would love to believe in a wave of positive choices in favour of a program built on investment and spending to encourage growth. That would be the program that ultimately delivers the death sentence to the Merkozy inspired austerity measures. But do they really have something going? Or is this the child spitting out the medicine and going for the sugared placebo? Even before we start hedging our bets on whether the placebo of “growth” and “the new Marshall plan” will work we should be asking what these programs really mean.
Back to Finkelstein – whom I will quote in order not to bastardise by summarising:
Here’s what I think happened in Greece, and in France, and in the local elections in Italy a few days ago. Voters went to the polls to see if they agreed that two plus two equals four and decided that they did not. Simple arithmetic ran for office, and lost.
Now what exactly does Finkelstein mean by “simple arithmetic”? Thankfully Finkelstein explains what this actually translates to in democratic terms:
The financial crisis saw governments step in to take over debts that had been incurred by private citizens. They could do this because their power to tax their citizens assured lenders that they were good for the money. But two things have happened since 2008. The first is that the size of the debt grew so large in some countries that even its power to tax wouldn’t raise enough money. The second, which was dramatically underlined by the election results at the weekend, is that the power to tax proved to be theoretical. Democratic governments can’t tax (or reduce spending) if voters won’t let them.
The clash between financial reality and democratic response is as big a political crisis as most of us have ever seen. All over Europe, voters are in revolt against paying the bills they and their fellow countrymen have incurred. And not just in Europe. A recent visit to Japan found a country flitting from one prime minister to the next and still, after many years of struggle, no closer to determining how — or even whether — to deal with its economic problems.
On Europe Day, we would do well to look more closely at this kind of message. The rhetoric of “growth” is all well and good. So is it facile to condemn “democracy controlled by markets”. The importance of responsible governance can never be sufficiently underlined. When I look at the recent outings by Joseph Muscat what with all the karma that “Taghlim. Tahrig. &c” I can only see a pandering to the huge chunk of voters who will act as most voters would: voting for the option that promises less tax and more spending.
Malta does not even have a movement such as the Movimento Cinque Stelle – and what with Alternattiva seeming to be lured by the progressive promises of a “growth driven” plan of recovery (an inevitable step given AD’s heart lies strongly with the working left) there seem to be less options for delivering the message of no confidence to the entire political class. Meanwhile in parliament today Tonio Fenech summarised what this year’s budget means to the population:
“(…) increasing pensions, the tax reductions for SMEs and for parents whose children are in private schools, the incentives for the property sector and the investment we’re carrying out in the economy,”
The brunt of his attack on Joseph Muscat was based on the notion that this government has actually increased spending notwithstanding the 40 million euro budget cuts. Interestingly Fenech’s damning accusation for Muscat was that “A Labour government will be an austerity government… “. This leaves us with much food for thought regarding both political parties. Is Gonzi’s PN eager to shed any links it has with “austerity” plans and if so does that mean that both our main political parties are jumping on the “growth” bandwagon because that is where the votes evidently lie?
Earlier Fenech had sung his praises for Francois Hollande’s policies regarding the stability pact stating that:
the Maltese government has “consistently emphasised that growth and stability go hand in hand and should not be divorced,” adding that the pact needs to be balanced between growth and stability because “there is no growth without stability.”
President Barroso of the European Commission has given a lukewarm reception to the Hollande ideas (see this article on the WSJ) so where does this put the PN government policy wise? Will it be backing Hollande to the hilt in this new battle of “austerity vs growth”?
Given that elections are still round the corner, and once the focus shifts away from Franco Debono’s timetable for parliament, it will be interesting to see how the “growth vs austerity” battle will translate in Malta. Better still, it will definitely be another sad day for the anti-establishment voters who would have hoped for an option that recaptures the power that has long been lost to the institutionally cocooned behemoths that we have long labelled as “PLPN”.
* Note: The Times (UK) article links might not be immediately available to non-subscribers.
