Debt Crisis Lays Waste to European Governments | April 27, 2012

A likely change of power in France. No confidence votes in Romania and the Czech Republic.

The Dutch government’s resignation. Since the start of the debt crisis, 16 nations in the EU have seen a change of government.

Since the spring of 2010, the governments of more than half of the European Union’s 27 member states have fallen or been voted out of office. In most cases, a direct line could be drawn between the government’s exit and the austerity measures put in place because of the economic situation.

After Great Britain, Spain and Italy, France could be the next large EU member to see a change of the guard. Socialist presidential candidate Francois Hollande has a good chance of replacing current conservative President Nicolas Sarkozy when the French take to the polls in a second round of voting on May 6.

Only Germany, Poland and smaller states – including Lithuania, Estonia, Austria, Luxembourg and Malta – enjoy stable governing parties or coalitions.

Leaders in the rest of the EU have turned into victims of the economic crisis. On Friday, Romania’s government collapsed after failing a no-confidence vote. Voters in the Netherlands will vote in the second set of early elections since the crisis erupted.

In Greece, the epicenter of the crisis, a new parliament will be elected on May 6. It could usher yet another government after changes in 2009 and 2011. Sweden and Bulgaria, meanwhile, are led by minority governments.

Changes across the political spectrum

Over the past two years, 11 governments in the 17-member eurozone have collapsed or been voted out of power. In many cases, it does not appear that liberal or conservative leanings made a difference. Governments from both the left and right have been forced to vacate the halls of power.

Sarkozy exiting a voting booth

Sarkozy could be on the way out

In Spain, it was the conservatives who recently came to power, while it looks like socialists will replace the conservatives in France. In Greece and Italy, more neutral technocrats took over the business of governing after none of the parties could gain the public’s trust.

“We have to get used to new faces and ideas all the time,” said a European diplomat with experience in the eurozone meetings. He did not want his name connected to complaints about his international counterparts.

A lack of continuity makes it even more difficult to push through the rescue measures that the common currency area needs. German Chancellor Angela Merkel could lose one of her closest allies in the drive for austerity if Sarkozy is voted out of office. So far, she has received support only from Austria, Finland, Luxembourg and the Netherlands, all of which are countries that pay more into the EU than they get out of it.

No captain in the storm

The eurozone is suffering from a lack of leadership, according to Udo Bullmann, a European Parliament member from Germany’s Social Democratic Party.

“There are too few people leading European governments,” he said, “who have the courage to appear in front of people at home and say, ‘I am doing something that’s unpopular but has to be done and I’m doing it so that tomorrow I can ensure a better future.'”

But European leaders have not been willing to make that step, Bullman said.

Not everyone is happy with Merkel’s influence on the debt crisis

“That’s why from outside of Europe – if we’re not careful – it will look like we are failing at a historic mission,” he added. “And I’m afraid that might become the case.”

European Commission President Jose Manuel Barroso said he is also concerned about a lack of leadership in the EU. As countries come up with ways to deal with the debt crisis either on their own or in smaller groups, the Commission has seen its influence decline.

That is one of the reasons Barroso has called for the EU Commission to take over economic decision-making as a way of strengthen existing institutions.

“Only a renewal of Europe – more Europe – and better European leadership will create trust. Trust in our ability to act,” he said.

Barroso wants the 17 eurozone countries to give up some of their sovereign rights in order to improve the coordination of their economic and tax policies.

What’s up for negotiation?

The fiscal compact agreed upon in March by 25 EU members – with the Czech Republic and Great Britain abstaining – represents a first step in Barroso’s direction. However, the agreement is not yet binding. France’s Hollande said he would change the deal if elected, and Ireland has said it will put the compact to a referendum at the end of May.

EU Council President Herman van Rompuy said he would consider a special summit to discuss a growth agreement in addition to the fiscal agreement. The few European states that are still solvent and enjoy top marks from international ratings agencies have come out starkly against the introduction of eurobonds or any other form of debt to be held across the eurozone.

A euro symbol in peeling paint

The eurozone is facing some existential questions

That, however, is just what indebted European states say they need in order to get out of the crisis. For now, Germany, the Netherlands, Austria, Finland, Luxembourg and France say they do not want financial solidarity to be a one-way street where Europe’s south siphons money from the north. That’s according to Markus Ferber, a member of European Parliament and financial affairs expert from Germany’s Christian Social Union.

Germany and other countries improved their competiveness in a timely manner and should not let themselves be seen only as paymasters, Ferber said.

“This form of solidarity, of course, cannot be allowed to exist,” he told DW. “Solidarity also has to mean that southern Europeans enact reforms and increase their competitiveness. That’s the only way there will be solidarity in this agreement. Otherwise, we will have the horrible thing no one wants to talk about: a permanent transfer union where money flows from the north to the south. That’s not something German taxpayers will accept.”

“Perverse solidarity”

But European solidarity also cannot come to mean that poor states have to pay to help relatively wealthy ones either, according to Richard Sulik, a neoliberal former parliamentary president in Slovakia. Greece is out of money and has no one to blame but itself, he added.

“Is it solidarity to tell a Slovakian retiree, ‘My dear man, we’re raising the value-added tax so that a Greek retiree can continue getting 1,200 euros a month?'” he said. “That’s a perverse form of solidarity that has nothing to do with real solidarity.”

Sulik’s opposition to expanding the European Financial Stability Facility, one of Europe’s bailout funds, brought down the Slovakian government in 2011. The new government eventually signed on to the fund’s expansion.

Other eurozone countries have also expressed their discontent with the management of the current crisis. Finalnd’s government wants to reserve special rights when it comes to bailout funds. In the Netherlands, the now-collapsed minority government was only able to agree on a budget after the government had officially resigned.

Opinion polls in Germany show that a decreasing number of people are in favor of the European Union. That’s led Ferber to call for more democratic checks and balances. He thinks the German chancellor and French president should not be able to go into a back room and make a deal that applies to the entire EU or eurozone.

“What makes people uneasy is that some small group can decide something that has major implications in other countries and is not subject to any kind of checks,” Ferber said.

Author: Bernd Riegert / sms
Editor: Shant Shahrigian


About Pat Donworth, D.Min.

I express myself as teacher, writer, and consciousness explorer. These driving interests have manifested in my work/service as a university and hospital chaplain; a book and magazine writer/editor, and teacher and workshop leader. I designed this blog to be a portal that points to and assists awakening souls to implement, and make practical, the changes that will usher in a new world based on unity, compassion, and collaboration.
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