The high priests of austerity

To an EU elite determined to push harmful economic policies, democracy is an inconvenience.

Jean-Claude Trichet could have enjoyed a comfortable retirement after stepping down as president of the European Central Bank in 2011.  Commanding an annual salary of €370,000 in his old job, the Frenchman is now paid a pension of up to 70 per cent that amount.

Instead, Trichet has been kept busy playing a game of musical chairs with Italy's technocrat former prime minister Mario Monti. In one of his final acts as ECB chief, Trichet spearheaded the downfall of Silvio Berlusconi by insisting that the lascivious rogue introduce unpalatable economic "reforms" in Italy as a condition of emergency "assistance". 

The diktat helped Monti replace Berlusconi as prime minister (without an election). It also allowed Trichet to fill two posts that Monti had to vacate: those of European chairman with the Trilateral Commission, that secretive club for political and business leaders, and chairman of Bruegel, a think tank based in Brussels.  Trichet combines these responsibilities with overseeing the Group of 30, a Washington-based institution dominated by bankers.  

All this hyper-activity might explain why Trichet has been sending out some muddled messages.  During an interview on French television earlier this month, he blamed mass unemployment for the killing of a far-left activist by skinheads before advocating deep cuts to public expenditure: a recipe for mass unemployment.

Suave and confident,  Trichet probably didn't realise he was contradicting himself.  So I'd recommend that he reads a paper published by his minions at Bruegel in May.  An assessment of measures taken in embattled eurozone economies, it stated that austerity has caused "very high unemployment" in Greece and "record unemployment levels" in Portugal.

This was a rare admission from Bruegel that its preferred prescriptions are counterproductive.

Funded by Goldman Sachs (another one-time Monti employer), Deutsche Bank, Pfizer and Microsoft, the think tank has helped cloak the crude politics of austerity with intellectual gravitas. It is treated with reverence among the elite in Brussels and beyond. Top-ranking EU officials regularly attend its events, while opinion pieces by its staff grace such newspapers as Le Monde and The Financial Times.

Bruegel was established by Jean Pisani-Ferry, who was hired as an economic adviser by François Hollande, the French president, in April. The appointment indicates that Hollande, nominally a socialist, is shifting  to the right. In a syndicated column from December 2012, Pisani-Ferry parroted Margaret Thatcher's argument that "there is no alternative" to eviscerating the welfare state. "Rather than flirting with illusions, governments should confront the hard choices ahead of them," he stated.

Pisani-Ferry's new responsibilities have not caused him to be more reticent. When flaws were recently pinpointed in a by now infamous paper from the economists Carmen Reinhart and Kenneth Rogoff, he claimed it was "never a celebrated piece of economic research". The shortcomings did not undermine the case for austerity, he suggested.

One common misperception is that the EU's most powerful figures have made up their response to the economic crisis as it went along. The truth is that they have exploited the situation to dust down plans hatched earlier but which would have been difficult to implement under less straitened circumstances.

André Sapir, a senior fellow at Bruegel, was tasked with drawing up a series of recommendations for the European Commission nearly a decade ago.  The 2004 Sapir report advocated that the Brussels authorities be given greater powers to monitor the budgets of EU countries. 

Known to policy wonks as the "European semester", his proposal urged meddling in areas of responsibility that national governments guarded jealously.  The concept has been turned into reality over the past few years, leading to a situation where details of Ireland's budgets are sent to other European capitals before law-makers in Dublin get to see them.

Bruegel is part of a mushrooming network of corporate-financed think tanks dedicated to influencing debate.  A video posted on Bruegel's website about Latvia's bid to join the euro illustrates this point.  It tells the viewer that there is "wide consensus" that signing up to the single currency would be "the right move for the country". 

That must be news to the people of Latvia, most of whom don't want the euro, according to opinion polls. Such inconvenient details can, of course, be glossed over. More than likely, the Riga government won't be calling a referendum on this matter.

Democracy does not gatecrash the cheese and wine receptions that happen almost nightly in the world of think tanks. Without scrutiny, their "experts" can mould the outside world in the way that the wealthy and influential want. 

David Cronin's "Corporate Europe: How Big Business Sets Policies on Food, Climate and War" will be published by Pluto in August. Follow him on Twitter @dvcronin

A recent debate at the European Parliament in Strasbourg. (Photo: Getty.)
Show Hide image

US election 2016: Trump threatens to deny democracy

When asked if he would accept the result of the election, the reality TV star said that he would have to “keep you in suspense.”

During this insane bad-acid-trip of an election campaign I have overused the phrase “let that sink in.”

There have been at least two dozen moments in the last 18 months which I have felt warranted a moment of horrified contemplation, a moment to sit and internalise the insanity of what is happening. That time a candidate for president brought up his penis size in a primary election debate, for one.

But there was a debate last night, and one of the protagonists threatened to undermine democracy in the United States of America, which throws the rest of this bizarre campaign into stark relief.

It was the third and final clash between an experienced if arguably politically problematic former senator and secretary of state – Hillary Clinton –  and a reality TV star accused of a growing number of sexual assaults – Donald Trump – but the tone and content of the debate mattered less than what the latter said at one key, illuminating moment.

That statement was this: asked if he would accept the result of the election, Donald Trump said that he was going to “look at it at the time,” and that he would have to “keep you in suspense.”

If your jaw just hit the floor, you have responded correctly. The candidate for the party of Lincoln, the party of Reagan, the party of Teddy Roosevelt, declined to uphold the most fundamental keystone of American democracy, which is to say, the peaceful transition of power.

Let that sink in. Let it sit; let it brew like hot, stewed tea.

This election has been historic in a vast number of ways, most important of which is that it will be, if current polling is to be believed, the election which will bring America's first female president to the White House, almost a century after women's suffrage was enabled by the 19th amendment to the constitution in August 1920.

If the last near-century for women in America has been a journey inexorably towards this moment, slowly chipping away at glass ceiling after glass ceiling, like the progression of some hellish video game, then Donald Trump is as fitting a final boss as it could be possible to imagine.

For Trump, this third and final debate in Las Vegas was do-or-die. His challenge was near-insurmountable for even a person with a first-class intellect, which Trump does not appear to possess, to face. First, he needed to speak in such a way as to defend his indefensible outbursts about women, not to mention the increasing number of allegations of actual sexual assault, claims backstopped by his own on-tape boasting of theoretical sexual assault released last month.

This, he failed to do, alleging instead that the growing number of sexual assault allegations against him are being fabricated and orchestrated by Clinton's campaign, which he called “sleazy”, at one point to actual laughs from the debate audience.

But he also needed to reach out to moderates, voters outside his base, voters who are not electrified by dog-whistle racism and lumbering misogyny. He tried to do this, using the Wikileaks dump of emails between Democratic party operators as a weapon. But that weapon is fatally limited, because ultimately not much is in the Wikileaks email dumps, really, except some slightly bitchy snark of the kind anyone on earth's emails would have and one hell of a recipe for risotto.

In the debate, moderator Chris Wallace admirably held the candidates to a largely more substantive, policy-driven debate than the two previous offerings – a fact made all the more notable considering that he was the only moderator of the three debates to come from Fox News – and predictably Trump floundered in the area of policy, choosing instead to fall back on old favourites like his lean-into-the-mic trick, which he used at one point to mutter “nasty woman” at Clinton like she'd just cut him off in traffic.

Trump was more subdued than the bombastic lummox to which the American media-consuming public have become accustomed, as if his new campaign manager Kellyanne Conway had dropped a couple of Xanax into his glass of water before he went on stage. He even successfully managed to grasp at some actual Republican talking-points – abortion, most notably – like a puppy who has been semi-successfully trained not to make a mess on the carpet.

He also hit his own favourite campaign notes, especially his opposition to the North American Free Trade Agreement (NAFTA) - but ultimately his intrinsic Donald Trumpiness couldn't stop itself from blazing through.

Remember the Republican primary debate when Trump refused to say that he would accept the party's nominee if it wasn't him? Well, he did it again: except this time, the pledge he refused to take wasn't an internal party matter; it was two centuries of American democratic tradition chucked out of the window like a spent cigarette. A pledge to potentially ignore the result of an election, given teeth by weeks of paranoiac ramblings about voter fraud and rigged election systems, setting America up for civil unrest and catastrophe, driving wedges into the cracks of a national discourse already strained with unprecedented polarisation and spite.

Let it, for what is hopefully just one final time, sink in.

Nicky Woolf is a writer for the Guardian based in the US. He tweets @NickyWoolf.