20 August 2015

The third Greek bailout is officially under way. The ESM, the Eurozone’s bailout fund, has this morning disbursed €13 billion from the first tranche of the new loan. But let’s take a step back and look at what happened in some of the countries where national parliaments held a vote on the bailout – a perfect illustration of how Eurozone membership clashes with national democracy.

The Netherlands and the fear of being “isolated”

For Dutch Prime Minister Mark Rutte, taking part in the third Greek bailout has meant breaking his 2012 election pledge of “not one more cent for Greece”. Dutch MP Mark Harbers, the economic spokesman of Rutte’s VVD party, said something really interesting ahead of the debate in the Dutch parliament,

We have many doubts as to whether this package will work, but putting everything on the balance, the VVD faction has decided to vote in favour. When one country would vote against, I know Europe enough by now: the money goes to Greece one way or another. The rest of Europe has already decided that…It wouldn’t make much sense if the Netherlands would be isolated.

Mark Harbers MP, 18 August 2015

This is pretty big stuff. A senior member of the Dutch governing party is essentially saying that they do not necessarily think another multi-billion loan is the right way forward for Greece, but his country’s opposition to the bailout would be ignored by the rest of the Eurozone – and would even leave the Netherlands “isolated”. Not a far-fetched statement. The ESM can be activated by a super-majority of 85% under a special emergency procedure that the Netherlands would not be able to veto on its own. Taxation without representation anyone?

Greece: Reduced summer parliamentary sessions to defuse SYRIZA rebels?

In Greece, as in the Netherlands, the government has come to accept that this bailout deal was the only viable alternative – despite over 61% of Greeks voting against it in last month’s referendum after being strongly encouraged to do so by the government itself. Faced with a big rebellion within his SYRIZA party, Greek Prime Minister Alexis Tsipras has reportedly been considering opening reduced summer parliamentary sessions to adopt some of the reforms pledged by Athens to its creditors.

That would mean only 100 MPs sitting instead of 300, with each party allowed to pick which MPs attend the session. A handy (if democratically dubious, to say the least) tool to defuse the SYRIZA rebellion – the irony being, however, that Tsipras was very critical when the previous government resorted to reduced summer sessions last year.

Again, this illustrates the constraints Eurozone membership imposes on national democracy – especially when your country is under a bailout programme.

The Finns: Opposing the bailout would have meant walking out of government

The third example comes from Finland. Timo Soini, Foreign Minister and leader of the eurosceptic The Finns party, is a longstanding opponent of Eurozone bailouts. Yet, he recently admitted that his party was forced to back the third Greek rescue package “reluctantly” – as the alternative would have been to walk out of the governing coalition and possibly go to snap elections.

Soini told Finnish public broadcaster YLE,

I still think bailout policy is bad policy…But in politics, one must make unpleasant decisions.

Finnish Foreign Minister Timo Soini, 17 August 2015

In addition, German Chancellor Angela Merkel yesterday witnessed the biggest party rebellion of her ten years in office when the Bundestag voted on the third Greek bailout. This despite the fact that the deal she secured was already very ‘German’, with its heavy focus on spending cuts, tax hikes and structural reforms. Anything less would most likely have triggered an even bigger rebellion.

Ahead of the vote, the CDU’s chief whip Volker Kauder faced a huge backlash for the pressure he applied to rebel MPs, one of whom accused him of “trampling over the freedom of opinion for MPs which is guaranteed by the [German] Constitution.”

Add everything up, and one really needs to ask whether this underlying tension between Eurozone membership and national democracy is sustainable in the long run – and whether the tipping point hasn’t just come one step closer.