Have we handed Europe to Goldman Sachs and Co?

Nov 14, 2011

As technocrats take charge of Italy and Greece, is the financial world trying to run Europe?

ITALY'S Prime Minister Silvio Berlusconi has followed Greek Prime Minister George Papandreou out of the door as the latest victim of Europe's financial crisis. But does their replacement by unelected technocrats Mario Monti and Lucas Papademos (above) bring more cause for concern than rejoicing?

Markets aren't convinced
With serious-minded technocrats in Athens and Rome, the bedraggled euro can finally expect a little calm, says Charles Bremner in The Times. At least that's what officials throughout the 17-nation zone were saying over the weekend - "but they lacked conviction". Less than three weeks after a summit that was supposed to have forged the ultimate "financial bazooka", the markets "have little faith left".

Technocrats can't avoid politics
The replacement of elected, if flawed, prime ministers by supposed economic experts may be viewed as an affirmation that these nations mean business, says an editorial in The Guardian. Brussels would like Europe's leaders to tackle the economy in the professional spirit of an engineer fixing an aeroplane, but "economics is not engineering".

It is as much an art as a science, and its judgments have such vast implications for "who gets what" that they will always be contentious politically, adds The Guardian. "Don't bank on the technocrats being able to stay above the fray for long."

We need leaders not bankers
Surely what Europe needs is brave, charismatic leaders that can carry their nation through turbulent times, says an editorial in the Financial Times. "Instead, it is as if the crew of the Starship Enterprise had concluded that Captain Jean-Luc Picard is no longer the man for the job and that it is time to send for the Borg."

Efficient, calculating machines are pushing through unpopular measures across the eurozone with the battle cry "resistance is futile", adds the FT. "Faced with a deep crisis, once-proud European nations are essentially preparing to hand over power to Ernst & Young."

A bankers' coup
Yes, something extraordinarily undemocratic is taking place, says Brendan O'Neill on Spiked.com. There are no tanks on the streets, as there were during the Greek military coup in 1967. But there is a coup happening, "this time by suits in Brussels, a gang of commissioners and bankers determined to install a government to their liking".

Many think Berlusconi and Papandreou's time had come, says Gianluca Mezzofiore in the International Business Times. But a closer look at the people who have been designed to replace them "casts a sinister, threatening shadow on the status of international diplomacy in Europe".

Monti and Papademos both have Goldman Sachs in their pedigree, adds Mezzofiore. Goldman Sachs was among the top Wall Street firms who arguably got us into this mess by using a strategy of arcane derivatives to disguise debt when countries such as Greece and Italy were eager to join the euro but could not reach the standards of budget discipline imposed by the Maastricht Treaty. "Is it just a coincidence or is the financial world trying to take over Europe?"

The bankers can't even get it right
Worse still, these technocrats "have been wrong about everything, again and again", says Paul Krugman in The New York Times. The "technocrats" have consistently ignored their own economic models, instead calling for fiscal austerity and higher interest rates when their own analyses show this will stagnate growth.

It's a dubious idea to supplant democratic governance with allegedly non-political management even in the best of times, adds Krugman. "But to assign authority to unelected men whose actual record suggests that they govern based on prejudices rather than analysis is even worse."

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