Brave new continent

It’s sometimes good to step out of your comfort zone and take a look at the big changes around you. I am not talking about the big, and often unpredictable geopolitical changes taking place around the globe, but about more profound trends.

It is evident, for example, that politicians in the West are beginning to take issue at excess wealth and the role of the markets. The years from the early 1980s and until the fall of Lehman Brothers in 2008 were the golden era of unchecked capitalism.

Now this is changing and it’s hard to say where the trend will stop. Bankers and executives are seeing their salaries shrink, shareholders and big depositors are expected to pay a price for the risks they have taken, whether in state bonds or money in high-risk lenders. In any case, we appear to be entering a new cycle where wealth is no longer an object of worship.

Interestingly, the social media have created some sense of direct democracy. Powerful institutions and authoritarian governments are being challenged by the social media – a trend seen from the Arab Spring to the monarchy in Spain, and the Vatican.

The implications of all this will be far-reaching. The impact of traditional media and politics, furthermore, is on the wane. Running a country has become far more challenging under these circumstances. This endless stream of information is affecting the authority of politicians and other players.

Meanwhile, the chasm between European elites and the public has never been as wide in the postwar period as it is today. The average voter in southern Europe does not feel represented by Eurocrats like Jose Manuel Barroso and Olli Rehn, German Foreign Minister Wolfgang Schaeuble or other Eurogroup officials. He has never voted for them, they have never spoken to him, he does not share their ask-no-questions mentality. The distance between elites and ordinary people was made evident by recent elections in Italy. Although the Europeans decided that the indebted Mediterranean country should go with the Motni model, voters instead gave their vote to the anti-systemic candidate Beppe Grillo and the populist former Prime Minister Silvio Berlusconi.

No one can know where Europe, and particularly the south, is going. These are historical times marked by the end of prosperity and easy money.

We will have to wait and see whether the future of the continent holds more turmoil or whether traditional institutions can still help us strike a balance between democracy and the markets.