G20 Summit Haunted by Fear of Democracy
Confronted with the exacerbation of the crisis, the world’s most powerful countries who met in Cannes last week-end were utterly nonplussed by the Greek decision to propose a referendum that might invalidate the EU’s austerity super-plan. Thrown out the door, the euro zone crisis came back in through the window.
Everything had been set. For the leaders of the big countries and G20 emerging countries, the summit that started in Cannes on Monday was supposed to end, if not with the draft of a global strategy to “consolidate growth”, at least with the publication of an agreement on the ways out of the financial crisis. A plan had been narrowly snatched during the extraordinary EU summit on October 26 to master the euro zone sovereign debt. Taking advantage of the G20’s French presidency, Nicolas Sarkozy thought it would offer him the last opportunity to strut as “world regent”. He did not scruple to concede to Angela Merkel whatever she demanded in order to screw down the lid of austerity over the euro zone and “reassure the markets” so that the Europeans might appear “in tip-top shape” in Cannes. And he accordingly laid his cards face-up on the domestic table, warning French people that after the G20 summit they would be informed of the “unavoidable” super-rigour plan by Prime Minister François Fillon the following week.
The plan now obsolete
Then crash! Down fell the beautiful plan, and just because the Greek prime minister, George Papandreou, chose to submit the EU plan to the Greek people’s sovereign verdict. Thrown out the door, the euro zone crisis came back in through the window. And shows what it really is: one of the major wheels in the cataclysmic mechanism that has taken over the whole of the capitalist system since the 2007-2008 crash. The news was no sooner known than the spread – that is the difference between interest rates for German bonds and interest rates for other countries (France included) — picked up again, threatening more particularly Italy, which is now speculators’ main target.
In Paris, as in Berlin, every effort is being made to shove aside, if not Papandreou (who was immediately summoned to Cannes), then at least his decision to have recourse to a referendum, France and Germany vowing that they are “set with their European partners on fully implementing, and as soon as possible, the decisions made in Brussels.” In other words: a member State’s popular sovereignty holds good only if it conforms to the decisions of the heads of state’s inner sanctum.
Now the issue raised by the Greek political crisis is precisely the issue of democracy. The heads of State have under-rated the rebellion of the whole Greek people against the tutelage explicitly imposed by the troika (the EU, ECB, and IMF) through the European plan. As the G20 opened, that truth exploded in their faces. The same applies to their denial of the disaster provoked by the successive bloodletting enforced on Athens for the last two years. “Athens is ordered to do the impossible,” warned Heiner Flasbeck in l’Humanité (on October 25). Heiner Flasbec, chief economist with UNCED was co-author of an UNCED report on the devastating effects of austerity: the remedy does not cure the diseased, but kills them.
Before the summit Barack Obama openly worried about the consequences of a European slump. For even if the difficulties the euro faces need not sadden the king of the dollar, which may actually profit by them, they are liable to have a terrible impact on the United States, since they are the EU’s first commercial partner. Especially as the world’s most powerful empire is presently in dire straights. The level of its debt ($15 000 billion) has never been so high. Its current debt ($150,000 billion) is at its highest in its recorded history, and the threat of a new plunge into recession is looming nearer. Consumption, the main driving force of growth, is at a standstill. Massive unemployment still prevails and household incomes have even decreased by 10% over the last two years and a half, according to the figures just released by the bureau of statistics in Washington.
An anachronistic world
The other big countries consequently fare hardly any better. Japan is sliding irreversibly into recession under the unmitigated effect of the rise in the value of the yen, an episode in the monetary war waged by the US through the dollar. And even China, which has been imperatively called to the euro zone’s rescue, is confronted with a bout of inflation and a relative slackening of its growth.
In fact, as the G20 opened, the intensification of the crisis pushed the question of democracy to the forefront. Whether you consider the referendum snatched by the Greek people or the mobilization of the opponents of neo-liberal globalization or the Indignados, the finding is the same: a world where, as Wall Street occupiers and their counterparts elsewhere say, 99% of all citizens do not really have a say, is just anachronistic. And this fact, in addition to being insufferable, is a factor of inefficiency.
The original article was published, in French, in L’Humanité, France;s progressive daily. This English version was translated by Isabelle Métral and first appeared on the website L’Humanite-in-English< http://www.humaniteinenglish.com/> Since this publication the referendum referred to has, of course, been abandoned. The photo, by Oxfam, shows protestors with masks of world leaders in a demonstration in favour of a global transaction levy, often called the Tobin Tax.