Saturday, December 31, 2011

Hungary and democracy in the Angiefied European Union

The most obvious symptom of the failing of the European Union was the replacement of the Italian and Greek governments in 2011 at the demand of the EU to be replaced, without new elections, by "technocratic" governments whose only real task was to collect debts for the banks, i.e., keep payments on their sovereign debt current by slashing government spending and dismantling much of their public social net.

Austerity economics is terrible policy in the middle of a depression, no matter what kind of government is pursuing it.

But a couple of contrasts in the field of democracy are especially telling. In 2000, the Austrian Freedom Party (FPÖ) won a plurality in the national election. The FPÖ was headed by Jörg Haider, then seen as the model "yuppie fascist" in European politics because of his repeated expressions of admiration for various aspects of the Third Reich. We now know that he was more interested in being on TV than in becoming a new Mussolini. He created a split-off party and, in 2008, died in a car wreck after getting drunk with a pal of his at a well-known gay bar in Klagenfurt, the capital of his home state, Carinthia.

But in 2000, the prospect of an Austrian government headed by an admirer of the Third Reich was taken seriously. The EU imposed "diplomatic sanctions" on Austria. Which really weren't terribly harsh. They essentially meant that Austrian diplomats in Europe wouldn't be invited to as many dinner parties as they would normally expect. There was much gnashing of teeth and rending of clothing in Austria about this (figuratively speaking!). But it was a clear statement by the EU nations that democracy was a baseline requirement for participation in the Union. Because they EU was always about political union on the basis of democracy for the purpose of preserving peace in Europe.

And it was effective. Austrian President Thomas Klestil, the head of state, agreed with the FPÖ and the second-place conservative People's Party (ÖVP) that the ÖVP would form the government with the FPÖ as the junior partner, without Haider as a minister in the national government. (Typically, the head of the junior coalition partner gets a Vice Chancellorship and the Foreign Ministry.) When the ministers were selected and formally proposed to Klestil, he rejected two of the FPÖ ministers because of particularly impolitic comments that had made.

In other words, the EU was prepared to defend democracy. The replacement of the Greek and Italian governments for the convenience of the European banks during 2011 had a very different look. And the contrast becomes even more dramatic when we think about what's happening in EU member state Hungary, where an elected government is taking far more drastic steps to establish authoritarian rule there than anything the Austrian government did under the ÖVP/FPÖ coalition.

Paul Krugman has been calling attention to the situation in Hungary under the ruling Fidesz party in his New York Times column and blog. As Charles Hawley reports for Spiegel International,'Democratic Deficiencies' Abound in Hungary 12/21/2011, "Media, churches, the judiciary and even the Hungarian central bank are all to be more tightly controlled by Fidesz officials in government."

What, you haven't heard the EU howling about Hungary abandoning democracy? Me neither. But let's be fair. The EU is expressing concern about some aspects of Fidesz policies. The ones that trample on neoliberal economic orthodoxy:

Meanwhile, Orban's legislative frenzy appears to be ruffling feathers with the European Union once again. European Commission President Jose Manuel Barroso has reportedly written to the Hungarian prime minister asking him to withdraw a proposed law which some say would threaten the Hungarian central bank's independence. "I would forcefully advise you to withdraw two pieces of cardinal law now in front of parliament," Barroso wrote, according to the Hungarian news website

The law would change the bank's management structure and also that of the committee which sets interest rates. Both the EU and the IMF, in Budapest to negotiate measures to help insulate Hungary from the euro crisis, left abruptly last week due to concerns about the law. [my emphasis]
Drastically restricting freedom of speech and the press, curtailing religious freedom, fixing election laws Southern-segregationist style to secure indefinite Fidesz rule - why the bleep should Angela Merkel and her subservient EU bureaucracy care about stuff like that?

But threatening the sacred independence of the central bank, now that's something that has to be dealt with!

Angie and her junior partner Nicolas Sarkozy have transformed the EU. And definitely not in a good way.

The independence of the central bank is a neoliberal fetish. Sound economics as practiced by the Very Serious People who have wrecked the world economy says that the central bank should be independent of direct political control. Which is a good idea up to a point. But it's not the kind of thing that written on some sacred stone tablets of democracy somewhere. One of the problems of the euro is that the European Central Bank (ECB) is that it is independent but required by its (foolishly designed) EU legal framework to concentrate on controlling inflation and not acting as buyer of last resort for eurozone sovereign debt. How a country or the EU establishes the framework for a central bank's operation may be more or less advisable. But only in some extreme situation, such as setting it up to function as organized corruption (see the 19th-century Bank of the United States), is it a matter of basic democratic institutions.

I've never forgiven Walter Russell Mead for ridiculously calling the Cheney-Bush Administration "Jacksonian". And I generally don't think much of his analyses. But (stopped-clock-is-right-twice-a-day), in "Fascist Zombies" From Hungary Threaten EU The National Interest 12/22/2011, he manages to at least say some things that are reasonable, such as, "we are learning in Hungary, [the EU's] resources to defend democracy in an erring member state are not great. ... In Greece the problem is financial; in Hungary it is political."

Of course, Mead seems to approve of the Herbert Hooverish insistence that austerity economics and removing of protection for workers and ordinary citizens from the worst consequences of systemic economic failure are wonderful things. And, in connection with that sentiment, he makes the observation, "If voters refuse to make sensible choices, sooner or later they will lose the power to choose." It's not clear from this just how upset Mead actually is about the attacks on democracy in Hungary or about the EU's failure to do anything about it.

Which brings me to this latest piece of degeneration of politics in Angie's Christian Democratic Union (CDU): CDU-Finanzexperte."Griechen legen Hände in den Schoß und wir zahlen" Die Welt 30.12.2011. Hans Michelbach is head of the German Budestag's (lower house of Parliament) Finance Committee, and thus one of the leading figures on finance questions in Angie's party. He's saying outright that even the government Angie installed in Greece late in 2011 - which was approved by the Greek Parliament in at least technical compliance with democratic and Greek sovereign processes - should just be ousted and replaced by an EU trusteeship!

There was a time, not so long ago, that a senior German politician publicly demanding the ouster of a democratic government in Greece or any other European country would have been a scandal, even cause for an early retirement from politics. There's no indication in the report that Angie endorses Michelbach's demand. But this is the Angiefied CDU. Given her behavior toward Italy and Greece, I actually would not be surprised if she were encouraging this kind of threat against Greece.

What will she threaten to defend democratic institutions in Hungary? Don't hold your breath waiting.

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