It isn't just the euro. Europe's democracy itself is at stake

[marmar]

It isn't just the euro. Europe's democracy itself is at stake
Greece illustrates the danger of allowing rating agencies, despite their abysmal record, to lord it over the political terrain

Amartya Sen
guardian.co.uk, Wednesday 22 June 2011


Europe has led the world in the practice of democracy. It is therefore worrying that the dangers to democratic governance today, coming through the back door of financial priority, are not receiving the attention they should. There are profound issues to be faced about how Europe's democratic governance could be undermined by the hugely heightened role of financial institutions and rating agencies, which now lord it freely over parts of Europe's political terrain.

Two distinct issues need to be separated. The first concerns the place of democratic priorities, including what Walter Bagehot and John Stuart Mill saw as the need for "governance by discussion". Suppose we accept that the powerful financial bosses have a realistic understanding of what needs to be done. This would strengthen the case for paying attention to their voices in a democratic dialogue. But that is not the same thing as allowing the international financial institutions and rating agencies the unilateral power to command democratically elected governments.

Second, it is quite hard to see that the sacrifices that the financial commanders have been demanding from precarious countries would deliver the ultimate viability of these countries and guarantee the continuation of the euro within an unreformed pattern of financial amalgamation and an unchanged membership of the euro club. The diagnosis of economic problems by rating agencies is not the voice of verity that they pretend. It is worth remembering that the record of rating agencies in certifying financial and business institutions preceding the 2008 economic crisis was so abysmal that the US Congress seriously debated whether they should be prosecuted.

Since much of Europe is now engaged in achieving quick reduction of public deficits through drastic reduction of public expenditure, it is crucial to scrutinise realistically what the likely impact of the chosen policies may be, both on people and the generating of public revenue through economic growth. The high morals of "sacrifice" do, of course, have an intoxicating effect. This is the philosophy of the "right" corset: "If madam is at all comfortable in it, then madam certainly needs a smaller size." However, if the demands of financial appropriateness are linked too mechanically to immediate cuts, the result could be the killing of the goose that lays the golden egg of economic growth. ..............(more)

The complete piece is at: http://www.guardian.co.uk/commentisfree/2011/jun/22/euro-europes-democracy-rating-agencies

[Imajika]

1. Ratings agencies and financial houses are crooked...

Just as creditors tend to be.

Still, Greece simply shouldn't have borrowed so much. Had they not, they would not be so indebted to these bankers and their minions.

People and the governments they elect need to do a better job of living within their means.

[Lucky Luciano]

2. Greece also has major tax collection issues. nt

[2banon]

3. Appartently Forbes and Goldman Sacs people are over in Greece right now

ready to grab up all of Greece's assets/resources. Sweet huh?

Listen to today's interview with Max Kaiser on Guns and Butter

http://www.kpfa.org/archive/id/70900

[SlipperySlope]

4. Europe will have to choose between Democracy and the Euro

The democratic will of the people of Europe has been clearly expressed over and over again; no more bailouts, no more austerity. This means that Greece must default. So must Portugal and Spain. The price of this default will be the end of the Euro, but the Euro was flawed and undemocratic from the moment of creation.

The tension we are seeing comes from the powers that wish to preserve the Euro at the price of democracy. They will see democracy die to save their precious currency union.

[JDPriestly]

5. Meanwhile, under our Constitution, our government guarantees the full

faith and credit of our debts but the Fed controls the lending of our money. So, the Fed actually has more control over our financial situation than our elected representatives even though the Constitution provides that Congress should issue our money and decide on our government's budgets.

Basically, if you think about it, you have to question whether we have a democracy at all in the US when it comes to managing our currency, debt and basic economic structure. I'm just not sure that we do.