Rage undermines Europe’s future

Greece was just the start. The effort to rein in deficits and debt by reducing citizens’ incomes and raising the costs and taxes that they must bear is spreading fear and uncertainty across Europe. Ireland and Portugal are reeling under the combined weight of austerity measures and a lack of faith on the part of international markets that they will resist following Greece in submitting to bailout by the European Union and the International Monetary Fund. The storming of the Conservative Party’s offices in London on Wednesday could have happened anywhere: in Athens, in Paris, wherever young people feel that they are being cheated out of a future, deprived of the benefits of previous generations. Europe’s golden age is ending, tarnished by its citizens’ rage, humbled by its leaders’ inability to propose solutions that will manage public finances and still provide citizens with the basics of a dignified life: education, health services, jobs and decent pensions. No matter how much these cradle-to-grave benefits are scoffed at by critics of the European model, they are the basics of human life; ensuring that they continue where they are established and spread to other parts of the world is a noble cause that should be encouraged rather than discarded. It is clear that Europe cannot continue to provide all its people with the benefits to which they had become accustomed over the past half century or so. Germany, the continent’s economic powerhouse, is carrying out painful spending cuts, even though its economy is growing faster than expected. Germany has also been the loudest voice in favor of austerity measures aimed at reducing deficits and debt. The rest of Europe has followed, reaching the point where the EU is debating measures that could include suspending the voting rights of countries that break the monetary rules. On the other hand, no one can claim that austerity is the way toward a bright future. The United States has chosen to keep stimulating its economy with seemingly endless billions of dollars, taking the opposite route to that of Europe. But Ireland, which was the first to take drastic cost-cutting measures (and was held up as a model to Greece when it was still pretending that it was safe from crisis), is now under merciless attack, with the cost of its borrowing reaching record levels. The same applies to Portugal. It is becoming increasingly clear that the cost of borrowing will keep going up as long as investors feel sure that they can push up the price of bonds without sending the debtor country over the brink – because it will be bailed out by its partners. It is time to acknowledge that the only way to stop the feeding frenzy is to use the EU’s 1-trillion-euro emergency fund as the basis for a eurobond, against which troubled nations will borrow at a price set by their partners and not by the markets. The EU countries are already putting up the money for the rescue fund; it makes no sense to allow international speculators to determine the price that they will pay to bail out their own partners. Besides the economic aspects, the crisis is political. Voters may understand that something must be done but they have every right to feel angry and to express this – because it is not the majority of citizens who are to blame for the lack of regulations that have pushed some countries to the brink nor for the collapse of discipline and lack of accountability in other countries, and Greece is the poster child for this. So, the people will respond only up to a point to the calls for more and more sacrifices. The large abstention during the first round of voting in Greece’s local and regional elections last Sunday is a potent message: The people are angry. The fact that the government still got the most votes and the opposition parties did not gain the upper hand means that most citizens are not yet ready to the reject the efforts to right the economy. They are close to the tipping point, though. And unless the EU finds a balance between what its governments will demand of citizens and what they will offer in return, Greece could be the first EU member incapable of satisfying its own citizens and its partners. Anger will continue to grow and each ruling party will pay the price, leading to revolving-door governments and political paralysis at the EU level. This crisis could destroy the very foundation of a united Europe.