Amartya Sen and the E.U. “Democratic Failure”- By David MacNeil, one of the contributors to the soon-to-be launched EconoSTATS, a joint project between STATS and GMU

April 30, 2012

In an interview with Handelsblatt, the German business journal, Harvard professor of economics Amartya Sen says that there has been a “democratic failure” in the EU.

“An economic policy has to be ultimately something that people understand, appreciate and support. That’s what democracy is all about. The old idea of “no taxation without representation” is not there in Europe at the moment.”

He goes on to say that the views of the electorate in southern European countries such as Greece, Portugal, and Spain have counted for less than those of

“the bankers, the rating agencies and the financial institutions.  One result of European monetary integration, without a political integration, is that the population of many of these countries has no voice. Economics is de-linked from the political base. That I think is a mistake and it goes completely against the big European movement that began in the 40s and fostered the idea of a democratic, united Europe.”

Certainly Sen is right to note that that there is a “democratic failure” in the EU.  This problem, more commonly referred to as a “democratic deficit,” is an enduring one in European politics.

In 2005, within three days of each other, the electorates of both France and the Netherlands soundly rejected the Maastricht Treaty, which had been signed in 1992 with the hope that it would “transfer sovereignty to Brussels,” in the words of one Dutch supporter of the EU.  What made these particular rejections sting was that France and the Netherlands were two of the original six members of the European Economic Community, the forerunner to the E.U.

However, the double rejection of Maastricht had no effect upon the functioning of the E.U., since the operative attitude of leaders in Brussels is to recognize the outcomes of democratic votes only when they are the “correct” ones.  Indeed, most of the decisions to ratify various E.U. agreements have been made, not by voters in individual countries, but by parliaments, with little or no consultation of the people whose lives would be affected by the loss of sovereignty E.U. membership implies.

Indeed, in 2008, the voters of Ireland, perhaps inspired by those of France and the Netherlands, rejected another piece of E.U. legislation, the Lisbon Treaty.  After that defeat the government of Ireland obtained a number of political concessions from the E.U., including the right to have an Irish representative on the European Commission and agreements on taxation and social issues.  In return the government held another referendum the following year, and the Treaty passed.  However, the impression remains that the Irish and E.U. elites did not like the first result, so they allowed the electorate to try again, until they got it right.

Amartya Sen is correct to state that there has been a “democratic failure” in the E.U. and that it is largely the result of the lack of the political integration that would allow greater economic harmony throughout the Eurozone.  One of the main causes of the current crisis in Europe is that economies as different as those of Germany and Greece are lashed together, preventing a country with severe economic problems such as Greece to devalue its currency, restructure its debt, and begin the long struggle to restore its economy.

Only a true political union on the Continent would have allowed a harmonization of monetary, tax, interest-rate, and labor policies to prevent the simmering crises in Greece, Portugal, and Spain.  But European leaders knew that they would have had to make such a union transparent to voters, who see themselves as Germans, Greeks, and Spaniards, not as “Europeans,” and they knew that they could never win such votes throughout the E.U.  Thus, they attempted to impose a de facto political integration by stealth, but the failure of that path has been obvious for many months.


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