New Europe met the former prime minister of Greece George Papandreou in Brussels on the occasion of European Association of Political Consultants Annual Conference and talked about populism and the deeper challenges that leaders of the world and Europe face today.
Irene Kostaki: We are living times of rapid political change; the U.S. has a new president Donald Trump, is it only populism? How did we get here?
George Papandreou: Sometimes we use the term populism to simply criminalize people who are dissatisfied. We need to think about the real reasons why people are reacting, there are real problems. Issues of social injustices, of inequality around the world, issues of the loss of the social contract. Climate change, the move to Asia as the economy is growing there but slowing down in Europe. All this has created deep insecurities and a sense that the political elite is not handling, not dealing and is not in control of these issues, which is true in many ways because they are beyond national boundaries. So the traditional way of doing politics has become less effective, while people want effectiveness and to be asked for their choices.People feel more powerless, alienated, and they feel a sense of injustice that come out with disappointment, anger, often fear and sometimes a nostalgia for the past. Then it is when they often look for an authoritarian leader, somebody they think is strong, or a dogmatic ideology and religious fundamentalism. Something that would give them a sense of security, a sense of steadiness, stability, and a sense of change.
So what is the solution?
The solution, I think, is more democracy, not less. It’s trying to bring in people, to be more involved, as part of the solution and not part of the problem. If we had more innovative economic policies, geared towards social cohesion, I think that would be very important. For example the refugee issue would not be so difficult if people did not feel that they were unemployed themselves. If they felt more secure and that jobs were available, then they would more easily integrate refugees. People are divided on these issues, they want to secure borders but on the other hand help refugees because they’re human beings facing huge troubles. We as Europe should normally have the capacity as one of the richer parts of the world, to be able to deal with this, but our policies have been such that we have marginalized parts of our own society.
How can we change this policy?
Europe has underestimated its own power, we have looked for national solutions and we should look for European solutions. Greece, Portugal, Ireland, or Spain had a problem, but that was not true because the eurozone itself had structural problems. When ECB president Mario Draghi said we will do whatever it takes then the markets calmed down. When Europe works together, we create the European Mechanism, we share the risk and our strengths and are more able to deal with the problem. If we don’t do that Europe will start splintering. I see Europe the other way around. Why don’t we think of a Europe that will actually humanize globalization and take this role? Why should not Europe have a new vision for our younger generation? That could be a very big project, bigger than the Junker plan.
You ask for more democracy, procedures tend to be really slow in terms of uh reaching common grounds and finalising legislation.
Democracy is not a quick procedure necessarily, but it’s a more stable procedure. If we want to make changes, we need to bring people with us, they need to be in, we need an inclusive leadership, and inclusive solutions. You might have a bureaucracy which would be much more resistant, so in the long term, democracy’s actually quicker, because you’re otherwise come up with resistance. For example, I wanted a referendum [in Greece] in 2011, if we’d gotten the referendum and made the decision, we would more quickly have gone out of the crisis, but as people felt they were left out and the decisions were taken by a troika they became more resistant to these changes. They needed to be part of the solution. Brussels is seen as something very far away, the experts, take the decisions but they don’t really listen to us, they don’t understand us.
Brussels, G7, G20, should we ditch high-level meetings?
No, we should not have ditched the high-level meetings. Let’s think about Europe, then we can think about the world. You will have some institutional complication, but you don’t want the complication to rule, you want to have some policies and you need people to make choices. So why don’t we have European elections? Not like the European Parliament where every country sends their own European deputies, but still at a national level. What if we elected the head of the Commission? And not the way we did it before, with ‘Spitzenkandidaten’.Who chose the candidates? There was no real choice, it was Political groups behind closed doors, without real participation. So let’s have primary elections in all of Europe, or in different political families. Then we can actually vote directly for who will be president of the European Council and maybe combine the European Council and the European Commission [president] as one person. If you have somebody who’s been elected, even if their powers don’t change, that person will have the legitimacy to talk on behalf of the European people, and it won’t be across national lines, it’ll be across political lines. Are we ready for that? We should move forward, that is not so difficult to change in a Treaty.
What if that leader were to be a social democrat, would he do better than EPP, since social democrats are not performing well, elections results show. Is it the policies, lack of implementation? What could you have done better?
I had to do things which would be different if everyone were social democratic in Europe and Germany.We were making a reform but we needed to tame the markets that were not allowing us to take a breath of fresh air. As for reforms, rather than simply cutting out pensions, people’s wages and so on, we need to fight bureaucracy and to create a governing tax system which is more transparent and sufficient. Many of these things we started doing. I think that social democracy needs to be a force of change. People want change. Secondly, we need to have a vision for Europe which is common and we have a division there. Thirdly we have to fight return to nationalism, we need to unite citizens of Europe around this common vision.
Seven years in bailout programmes, Europe and the IMF are endorsing the policy packages but only looking at the fiscal part.
Now Europeans and IMF are also understanding that there are also structural issues. They may focus let’s say on the labor market when I believe that is not the real problem. The real problem is governance, the government structure as a public sector. It was this sort of dogmatic view that cutting costs would be the best solution to this problem. They didn’t understand the real problems of Greece. I would also say that some people now are saying that maybe it should have been the World Bank to help us because they look more at the institutional buildings rather than the IMF.
So, is there light at the end of the tunnel?
Light in the tunnel is if we don’t only think about the memoranda and their adaptive process, but of innovative solutions for governance, look where we can build on our competitive capacity. As for debt, the biggest debt cut was done under my hospices, under my prime ministership, the PSI. That was the biggest historically debt reduction ever in recent world history. Now it’s in the hands of the European taxpayer. I rather expect some form of reprofiling the debt. I understand that a cut is difficult, but reprofiling is necessary. This is not my view only, this is the IMF’s view, in contrast to the German point of view.
So, is Europe just playing with words on debt sustainability rather than looking at the more solid solution?
First of all, there has been an electoral game, countries are going to elections and Germany. With the IMF, it is quite crucial because when the IMF says the debt is sustainable, as it puts a mark of credibility for the Greek economy. Therefore, it is very important to be able to communicate this to the German side that if we really want to get Greece out of it.
You underlined how crucial the role of IMF is in terms of credibility. What if we had a European Monetary Fund?
I proposed it at the very beginning, in the crisis. It would have greater independence, away from the electoral cycles and would make sure that there is a stable and continued program and if there are corrections, on the basis of the program, we wouldn’t have to go through all this. As for the issues with parliaments and boards, they were part of the game. I’m not against them, but you don’t want the technical issues to become politicized, you add problems without actually dealing with your real question. It becomes a moral or ethical issue. Everyone, Europeans and the IMF have realised that the programme had its flaws. So rather than punishing Greece, let’s learn from Greece.
What about a Eurozone finance minister?
We have to differentiate between what is desirable and what Is possible. Having some form of economic governance and fiscal policy, not just monetary policy, I think is desirable, but it’s going to be a political fight.