Electorate’s democratic deficit with EU bodies

It hasn’t gone away you know. The markets have taken the view that they will not beat ECB president Mario Draghi.

Consequently, the euro crisis that gripped the region for three years from 2009 onwards has abated. But as one of the country’s most distinguished economists, Kevin O’Rourke, highlighted this week, the intersection of politics and economics will again expose the deeply flawed architecture at the heart of monetary union that will eventually pose an existential challenge to the future of the eurozone.

Mr O’Rourke was in Dublin to speak at a conference on the eurozone crisis organised by UCD. The Oxford academic’s main argument is that there is a growing democratic deficit between EU institutions and the electorate. The response to the crisis has been shaped by unelected technocrats, which means there is very little transparency in terms of decision-making and accountability when things go wrong.

There is a huge amount of merit in what Mr O’Rourke had to say. It is a pity, however, that his argument is isolated to academic and media circles.

The European elections will be held in two months — on the same day as the local elections. Yet how many council seats the main parties secure is likely to overshadow who is elected to the European Parliament.

Since joining the EEC in 1973, euro elections have never been taken seriously — by the electorate or political parties.

This lack of engagement is common throughout the region, which combined with growing discontent with Brussels, is likely to see a sizeable cohort of anti-EU candidates elected to the next parliament.

This matters greatly. There is an economic roadmap that shows how the eurozone could become a viable, growth-friendly economic entity. The problem is that politicians are afraid to enunciate what this is in public for fear of a popular backlash.

Take the example of Angela Merkel, the German chancellor. She is one of the most popular politicians among national electorates across the entire EU. Because of its size, Germany will have a disproportionate say in how the eurozone crisis is ultimately resolved.

But instead of taking a region-wide perspective on the causes of the crisis and the most effective solution, the Merkel administration has taken a very Berlin-centric approach. This is in no small part due to the erroneous and self-serving view among the German public that the problems were caused by feckless southern Europeans. Moreover, redemption lies in everybody following the example of the virtuous Germans.

Every country has its own narrative — in most cases equally self-serving.

As Mr O’Rourke rightly pointed out in his speech, if the eurozone is to overcome its considerable difficulties, then a comprehensive deal has to be done on legacy debt. This has to be accompanied by moves towards genuine political, economic, and fiscal union. But getting to that point is difficult in view of the growing popular discontent with Brussels and everything it stands for.

The alternative is that EU authorities do just enough to keep the single currency together. However, growth will remain well below trend and the region will be stuck in a state of near-recession.

In that environment, the single currency wouldalmost certainly unravel as youth unemployment and other factors lead to unmanageable social unrest.

How this is resolved has enormous implications for everybody in the eurozone.

But there is a huge tension caused by political exigencies. All politics is local. National governments think in terms of national interests.

What is needed is a well informed public debate.

The euro elections were an obvious starting point, but it looks increasingly like another missed opportunity.