Mutiny on the Bounty

Power can be exercised directly, by submitting an issue to a vote, or more subtly, by eliminating all discussion on a policy and its alternatives from public discourse. What is not talked about does not exist. This is why politicians devote so much energy to controlling the public agenda. This was the way things were in the EU with regard to austerity. But in less than a week the dykes have broken and we are awash in discussion. As with any sudden change, it is easier to explain it after the fact than to predict it before.

In the last two years many voices have been raised in favor of a change of strategy. Yet they always came to nothing. They failed mainly because the people these messages were addressed to might question the legitimacy of those who proposed a change of course. On the one hand, messages from across the Atlantic were rejected on the grounds that the US and the EU were so different, that what worked for one would not work for the other; and secondly, by attributing leftist bias to the US economists most critical of EU austerity.

Something similar has happened to messages from southern Europe, rejected with similar arguments: as ideological, when coming from socialist governments; or self-interested, questioning an irresponsible, indebted patient’s right to opine on his treatment. Thus, not even the changeover to conservative governments in the four southern countries could alter the terms of the EU debate. Despite their impeccable conservative credentials, Passos Coelho, Rajoy, Monti and Papademos have been muzzled — in their present situation of economic weakness, how could they band together against Germany and France, on whom their salvation depends?

In these circumstances, Hollande’s victory in the first round of the French presidential elections has turned the wheel of debate. But Hollande is not the whole story. First, because he hasn’t won yet; second, because the southern conservatives are loath to trust a French socialist; and third, because even if he wins, his margin for maneuver will be minimal and his capacity to impose on Germany small. Hollande is surely aware of what happened in 1981, when Mitterrand bolted to the left, and was immediately brought back to the fold by the markets, which hounded the franc (as they now would the debt).

Just as important, or more, have been, firstly, the change of government in the Netherlands, Rutte’s conservative cabinet having been an essential ally of Germany. Secondly, the International Monetary Fund has publicly questioned the rigidity with which austerity is being applied. Thirdly, the failure of austerity policies in Britain, where Cameron, another austerity preacher, has been unable to generate growth even with the aid of rock-bottom interest rates. And lastly, the economic data from all over Europe, showing that the economic decoupling of the northern countries, that would go on growing as a result of their virtuous policies, and those of the south, that would have to wait for the effects of their reforms to kick in, is impossible.

Unlike the arguments from outside (the US), from down there (the South of Europe) and from across the street (the Socialists), the above-mentioned arguments come from the heart of the system, making it impossible to ignore them. A change in France was a necessary, but not sufficient, condition. How much things will change is still an unknown, the process having just begun. In May we have the second round of the French presidentials; the Greek elections; the referendum in Ireland on the fiscal treaty; and, in June, French legislative elections. Meanwhile, an Angela Merkel subjected to contradictory pressures from all sides will have to bring the fiscal treaty and the European Stability Mechanism before the Bundestag. More than ever, the future of Europe is in the German chancellor’s hands. Will she put down the mutiny and stick to her course, or accept the need to turn?