Milos Bicanski/Getty Images
GREECE, ATHENS - FEBRUARY 12: Demonstrators throw pfire bombs to riot police during violent protests in central Athens February 12, 2012. Thousands of demonstrators clashed with police as the Greek parliament prepared to vote on a new and deeply unpopular EU/IMF austerity deal, to secure a 130 billion euro bailout, aimed at saving Greece from bankruptcy and what Prime Minister Lucas Papademos warned would be "uncontrollable economic chaos". (Photo by Milos Bicanski/Getty Images)
He doesn't go quite as far as I did yesterday when I said that the ongoing European debt crisis has spawned a series of financial coup d'etat, with democracy being subjugated to the needs of markets. But at Project Syndicate, Kemal Dervis lays out a similar case:
Beyond the specific problems of the monetary union, there is also a global dimension to Europe’s challenges – the tension, emphasized by authors such as Dani Rodrik, and Jean Michel Severino and Olivier Ray, between national democratic politics and globalization. Trade, communication, and financial linkages have created a degree of interdependence among national economies, which, together with heightened vulnerability to financial-market swings, has restricted national policymakers’ freedom of action everywhere.
Perhaps the most dramatic sign of this tension came when Greece’s then-prime minister, George Papandreou, announced a referendum on the policy package proposed to allow Greece to stay in the eurozone. While one can debate the merits of referenda for decision-making, the heart of the problem was the very notion of holding a national debate for several weeks, given that markets move in hours or minutes. It took less than 24 hours for Papandreou’s proposal to collapse under the pressure of financial markets (and European leaders’ fear of them).