With large budget deficits and even larger total debt, many members of the EU have experienced a one-two punch as a result of the great recession. With economies in decline and large increases in debt due to bank bailouts, many countries such as Greece, Italy and others are feeling the pinch. While this situation is more widespread than just the euro zone, countries that are part of the EU face a special problem. Due to the connections created by having a single currency, one country’s economic dilemmas are not just felt by those within the country but by all members. As investors force these countries to pay more for their debt due to perceived increased risk of default, the pressure is being dialed up on Germany and the European Central Bank to come up with a solution.
Democratically elected officials are stuck between debt and an increasingly upset populace. With larger numbers of public sector workers, European countries have huge future debts (pensions and wages) that are difficult to decrease without feeling the pain at the ballot box in the future. How can these difficult political decisions be made by leaders subject to the whims of the people. More’s conservative political analysis provides an interesting lens to understand the dilemmas here. The European Union had provided (undeserved) equality to investors; with interconnected economies, it seemed just as safe to buy the debt of Greece, a country known for economic problems and government debt issues in the past, as Germany, a country with an incredibly strong manufacturing base and overall economy. More would conclude that the crisis of confidence for the Euro is punishment for this artificially created equality and would chide those that are trying to “level” so the consequences so they are felt equally by all members of the Euro-zone. Only by allowing those with special skills and abilities to succeed at the expense of the rest can stability of society be defended.
Burke’s understanding of illusion’s necessity in politics is illustrated well in the EU’s uncertain future. Whether or not the Euro-zone stays intact is connected with how well certain illusions maintain their credibility among the populace. So long as citizens believe that they deserve their large pensions and social services, the government will have major difficulties passing the austerity measures necessary to balance their budgets and calm the fears of investors necessary to contain this crisis. Italy recently changed its leadership. Due to their parliamentary system, the citizenry weren’t allowed to directly vote for the candidate. Instead the parliament directly elected the new prime minister, Mario Monti who will serve until the next set of elections. With less of a connection to the whims of the populace, many believe Monti is in a position to implement the necessary reforms to turn his country’s debt problems around. Burke would argue that the democratic nature of European governments are one of the reasons budgets grew irresponsibly in the first place. He would agree with a technocratic government much more than a government by the people due to the apparent lack of intelligence amongst the common people.