Thursday, 20 October 2011

If the Euro goes down, democracy may fall with it.

It’s impossible to tell exactly how the Eurozone crisis will play out, but there’s a danger the political dimension to the ongoing drama is often overlooked amid the economic tumult. When we talk of worst-case scenarios, involving Greek default, countries withdrawing from the single currency or maybe even the collapse of the Euro itself, the financial consequences are almost too big to contemplate. Bank exposures to sovereign debt may lead to a complete unravelling of global markets and a worldwide depression. But what of the politics? Can we be positive that the democratic certainties of modern Europe aren’t in danger of collapsing into the Mediterranean?

One thing that’s easy to forget for those of us born from the late 1960s onwards is that there is not a strong history of democracy in southern Europe. Up until 1975, General Franco ruled the roost in Spain – a fact which didn’t deter the growth of package tourism, as Brits and many other northern Europeans are notorious for putting a spot of sun ahead of any human rights considerations. While students were getting battered by the police in Spanish universities in the late 60s and early 70s, working-class families abandoned Clacton for the Costas.

Greece is another favourite holiday destination with an ugly past. After various constitutional crises and red scares, a military junta brought tanks onto the streets of Athens in 1967 and seized power for a seven-year period. And what about Portugal? The small, western European nation doesn’t tend to get a lot of pages in the history books, but their military actually did its people a favour back in the 1970s. Around the time the Greek Colonels were being forced out of power, Portuguese junior officers brought to an end the Estado Novo (New State) of Antonio de Oliveiro Salazar – a stifling, authoritarian Catholic regime that certainly wasn’t very ‘novo’ by the time it met its demise.

Of all the southern European nations currently in the Eurozone firing line, only Italy really has a claim to sustained democracy since the end of the Second World War. Weak government, corruption, terrorism and organised crime have, however, been a terrible blight on Italian political life. And the cult of personality surrounding Silvio Berlusconi is hardly a model that many democrats would embrace with open arms.

Does all this political baggage actually matter? My feeling is that it matters a great deal. In times of huge economic turmoil, austerity and social unrest, there is every possibility that the ‘normality’ we’ve known for the past few decades could be turned on its head. Greece is the obvious candidate, perhaps, because of its disastrous financial predicament and volatile street protests heavily infiltrated by anarchists.

Let’s imagine we head towards a disorderly exit from the Euro and the creation of, say, a ‘new’ Drachma which is worth very little. People who have already taken pay cuts, lost their jobs or seen their standard of living decline may end up finding half their life savings disappearing too. A whiff of the Weimar Republic would be in the air. At that stage, there’s a danger that any political or military force with a populist agenda might have a strong appeal or be able to fill a vacuum created by the failure of the democratically elected politicians.

Could a country such as Spain really abandon democracy 35 years after Franco? The chances are probably small, but I would hesitate to say they are non-existent. It’s important to remember that there’s a strong strand of conservative sentiment that runs very deep in the country. While Falangist parties get virtually no support in elections today, there’s undoubtedly an older segment of the population that has a nostalgia for the days of authoritarian rule. More worryingly though, almost half of the young population of Spain is currently unemployed – a situation which is pretty incompatible in the long term with a healthy, functioning democracy.

We are used to dictatorships falling. Just in the past year, we’ve seen the obliteration of the regimes in Tunisia, Egypt and, of course, Libya. It’s important to remember that democracies can fall too. The decadence, liberalism and economic growth of the Goldene Zwanziger in Germany gave way to the Great Depression, hyperinflation, instability, mass unemployment and – ultimately – the brutal oppression of the Nazis.

Europe comes with a lot of history. Merkel, Sarkozy and the others who are dawdling over economic solutions need to remember the potential political costs.

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