ECONOMY

The year of living dangerously as good times give way to rage

BRUSSELS (AFP) – It was Europe’s «annus horribilis» with game-changing bailouts for Greece and Ireland, more emergency financial rescues seemingly guaranteed and tens of millions of citizens expressing rage when the boom times went belly up. Even humble journalists working through the night of Sunday, May 9, when the 27 states that make up the European Union cooked up a trillion-dollar public-debt war-chest, knew they were covering events of lasting significance. Three days earlier, three people died at a bank in Athens that caught fire after rioters threw firebombs during a demonstration to protest the price to be paid by ordinary Greek people for their government’s 110-billion-euro international bailout. As Greek President Karolos Papoulias warned that his country stood on the «edge of the abyss,» the world wondered: Can this really be contained? Ireland’s bailout was scarcely less. And experts predict Portugal and Spain will need more. Commentators homed in on the fact that the worst affected have been «young democracies,» for whom the memory of military dictatorships remain fresh. When euro finance ministers held just the first of many such emergency sessions that Sunday – outside trading hours – it was clear the contagion couldn’t be controlled. Once it was Argentina, Indonesia or Mexico staring at bankruptcy. Now Europe faces radical reform if it is to properly anchor a 10-year-old currency with a central bank but no central government, and compete with the new world’s developing giants. First though, with loans comes interest – and, as Scottish historian Niall Ferguson says in «The Ascent of Money: A Financial History of the World,» the terms can feel as rapacious as those offered by Glaswegian loan sharks. And so the bailout culture spawned the age of austerity. From the Greek «austeros,» meaning bitter or harsh, when wine or fruit makes the tongue dry, austerity was one of those words that entered the lexicon of everyday life. Millions have already been affected. French soccer icon Eric Cantona failed with a Facebook call for people to withdraw their savings and bring down the banks. Exarchia Square in Athens, the scene of a police killing of a teenager that sparked major rioting two years ago in an eerie precursor of the trouble ahead, has long been known as a hotbed of anarchists, drug dealers and stray dogs. But 2010 austerity even extended to the animal kingdom when Andrex, an iconic toilet roll brand, decided to save money and employ a digitized dog rather than the puppies that set apart its advertising over the previous 38 years. French Finance Minister Christine Lagarde, who spent much of her career as a lawyer in the United States, called the May 9 deal a «historic turning point.» How we think about wealth, poverty, taxation, politics and government changed irretrievably – and ordinary people did not hide their anger. The gates of the Irish parliament were rammed by a cement-mixer truck with «Toxic Anglo Bank» written on it during a Europe-wide day of protest at the end of September. The offer from non-euro London of a loan to help Ireland’s collapsed banking system revived centuries of mistrust over English motives. In Brussels that same day, as many as 100,000 marched in protest. One group of Romanian police officers facing salary cuts, pension raids and compulsory redundancies traveled two days and nights on a bus from the Black Sea country only to run smack into riot police guarding EU headquarters, banks blamed for excessive risk-taking and designer stores that hid behind private security guards. Then, in December, angry students clashed with police outside the «mother of parliaments» in London, with tuition fees set to treble and the coalition’s deputy prime minister labeled a «liar and a snake.» David Cameron, the Conservative premier, said: «The decisions we make will affect every single person in our [countries]. And the effects of those decisions will stay with us for years, perhaps decades.» Once Winston Churchill mortgaged the «Great» in Britain and bankrupted the Treasury to defeat Hitler. Historian Simon Schama told the Financial Times that the world is teetering on the brink of a new age of rage. The reason is simple: massive cuts to public services; capping and reduction of salaries (while publicly bailed-out banks restore huge profits); bumper tax increases; cuts to social welfare; VAT increases; and pension fund raids either directly (in the case of Ireland) or indirectly (as in France, where President Nicolas Sarkozy extended the retirement age). Sarkozy, like Queen Elizabeth II with her staff Christmas party, canceled a lavish annual garden party in order to show he understood citizens’ pain. But already on eight out of nine days of French protest in 2010, more than one million people came out to demonstrate against Sarkozy’s reform. The effect on European politics is clear, with far-right parties currently in government in Italy and sitting in the parliaments of Austria, Bulgaria, Denmark, Hungary, Latvia, Slovakia, Sweden and the Netherlands. «It’s the European version of the Tea Party movement,» said Fabrice Pothier, director of the Carnegie Europe think tank, referring to the ultra-conservative faction in the United States. «A very reactionary response to the crisis.» There will be more.