How the EU brought the new italian government to power.
John Weeks is Professor Emeritus at SOAS, University of London, and associate of Prime Economics
There seems some disagreement as to whether Nero played the violin or the harp as Rome burned in AD 64. Whatever happened 1554 years ago, most would agree that we observe a substantial amount of bizarrely complacent fiddling in Brussels as the aggressively xenophobic coalition of neofascists and 5 Star anti-immigrant bigots attempt to form their misbegotten government in Rome.
We received a clear message of priorities when the (allegedly) politically neutral Italian president refused to accept the proposed Lega-M5S coalition not for its racist immigration policies, not for its aggressively anti-Roma policies, but because the person nominated for finance minister committed the sin of criticizing the euro (noted with disgust by Yanis Varoufakis). Should anyone miss the implied priory, the president chose a former functionary of the International Monetary Fund to form an interim government.
The Italian crisis unfolds as across Europe we find authoritarians in power in Hungary and Poland, and Austria ruled by a coalition of rightists and neo-fascists. In the midst of spreading malaise we should reflect on how Europe came to this degeneration of democracy.
By the middle of the 19th century the major powers of Western Europe had established themselves or were in the process of doing so, Great Britain and France, followed by the consolidation of Germany and Italy. During the subsequent one hundred years the governments of these powers led their citizens into war after war, each more barbarous than the one before.
After WWII European economic and political integration seemed the apparent solution to this alarming tendency of European governments to launch wars against each other. In the wake of that war the commitment of the leaders of the major European powers to peace was profound and deep. Important to that commitment was the US military occupation of Germany and Italy, and the putative threat of Soviet aggression. While it would be misleading to view integration as the political companion to NATO, we should not ignore the effect of US political and military hegemony over post-war Western Europe.
Placing the origins of European integration in the context of Cold War rivalry helps explain the rapid integration steps after the collapse of the Soviet Union. Discussions of a common currency began early as the 1960s (notably the 1969 Werner Plan), formalized in the 1972 Pompidou-Brandt Agreement. However, substantial progress awaited the historic event derivative from the collapse of the USSR – the unification of Germany.
In a breathtakingly short period, the dominant force in Europe changed from ancien regime of the United States and the Soviet Union to newly unified Germany. This shift of power paralleled another fundamental change, namely the transubstantiation of the European Union from cooperation across governments for peace to a neoliberal economic project. This change occurred with stunning success via a series of treaties severely constraining national governments. Beginning with Maastricht, these treaties, with less and less flexibility, constrain national governments from implementing progressive economic policies. They are by their nature anti-democratic as well as reactionary.
Because governments make the decisions that lead to war, agreements among governments are the appropriate and perhaps only practical way to establish non-aggression pacts, mutual assistance commitments and formal alliances. Depending on the specific laws and institutions of countries, these top-down treaties may or may not be approved by national legislatures. To be effective, such treaties should be irreversible. People from different countries do not go to war unless their governments order them to do so. Constraining governments from making war is a singularly appropriate constraint on the democratic process among civilized countries.
The two principle EU Treaties, On European Union and On the Functioning of the European Union, are anti-democratic for an obvious reason. They are the de facto constitution of the Union. Unlike the constitutions of all other countries, they specify in detail the nature of the economic system that every member state must implement. These details, such as the infamous fiscal deficit rule of 3% of GDP and the ECB’s inflation target of 2%, cannot be changed by national legislatures or the European Parliament. The treaties constrain EU governments and citizens ad infinitum.
This permanent constraint is rendered irreversible by the near-insurmountable difficulty of changing the treaties, which requires unanimous consent of all member governments (and the case of Belgium by the provincial governments as well); or by a new treaty that overrides the previous, which also requires unanimous agreement. The extreme difficulty in altering any provision of the de facto EU constitution means in practice that EU citizens are denied the democratic right to alter the basic economic policies that govern their livelihoods.
These anti-democratic treaties are the result of bargaining and compromise among governments of the centre-right and the centre-left, Christian democrats and social democrats under various country-specific party names. Having agreed to the treaty-enshrined dysfunctional constraints on national governments, over the next 20 years these parties faithfully applied them when in government.
In the new millennium each successive national economic crisis became increasingly intractable because the treaties prevented the rational policies that would have solved or even prevented them. With each passing year and the centrists further discredited themselves before the electorates with their devotion to austerity. Obvious metaphors come to mind — lemmings racing for the cliff edge and 18th century doctors bleeding patients to cure their illnesses.
No metaphor is really necessary because policies speak for themselves. These governments, Holland in France, Renzi in Italy, or almost any other during 1990-2018, acted in the narrow self-interest of financial capital. Despite the manifest failure of German-via-Brussels austerity policies to generate a sustained recovery; despite the appalling human const of these policies, especially but not only in Greece; despite the repeated voter rejection of politicians advocating these policies; centrists dutifully defended and implemented contractionary fiscal policies.
It is tempting to explain the political myopia of centre-right and centre-left by “complacency” from too long in government, “detachment” from the electorate, and/or ideological belief in the “TINA” principle (there-is-no-alternative). More promising than these subjective assessments is to pursue the approach in criminal investigations – cui bono, Latin for “to whom does it benefit?”
Inspect of trade and growth statistics since 2000 across the euro zone and the prime suspect jumps off the page – German industrial and finance capital. While cui bono explains the behaviour of the German government, what about the apparent losers in the rest of the EU and especially the euro zone where austerity policies bite the deepest?
Why did and do the governments of other euro zone countries follow the German lead? The simple answer is that until the recent Italian election 13 of the 16 other euro zone states had governments of the political right. These 13 governments would and have pursued reactionary fiscal policies with no encouragement from Brussels or Berlin.
That leaves Greece, Italy itself and Portugal. Greece is the exception that proves the rule, a nominally leftist government enforcing austerity policies imposed upon it. In Italy the Renzi government purposefully pursued austerity without external pressure. Only in Portugal do we find an established left party attempting to reject austerity policies (and strongly criticized by EU officials).
For two decades centre left parties in Europe have connived, accommodated and embraced the fiscal ideology of the right, differentiating themselves only by the limp promise to implement those dysfunctional policies in a moderate manner. That is how we come to this sorry state in which only one euro zone country has a government of the centre left with a progressive economic policy.
After enduring almost twenty years of economic stagnation with the euro, the Italian electorate had enough and elected parties promising to defy the EU rules of fiscal behaviour. The farce of the Italian centre-left implementing reactionary fiscal policies could be followed by the tragedy of a frontal challenge to those rules by a coalition of xenophobes, chauvinists and proto-fascists.
The apparent response in Brussels and Berlin to the Italian electorate’s demand for change was to encourage the Italian president to patch together yet another austerity government. That ineffective response represented the continuation of the EU policy so infamously stated by the erratic president of the Commission. During the Greek crisis in 2015 the ever-quotable Mr Juncker said, “Il ne peut y avoir de choix démocratique contre les traités européens” (there is no democratic choice about the EU treaties).
In the Bible Proverbs 29:11 tells us “whoever troubles his own household shall inherit the wind”. The Renzi government did indeed “trouble its own household [aka Italy]” and with its devotion to EU fiscal rules stirred a wind not south-by-southeast but right-by-far-right. The M5S/Lega government turns that Italian wind to gale force.