Democracy

The effects of the financial crisis are in the news every day, but at the same time, the financial world seems more distant then ever. Citizens must pay the bill for the risky behaviour of banks, but solid information, let alone participation in policy on the banking system, is not in reach. Think about it: the approval of a deficit of 10 billion euros (rightly) needs weeks of discussion, but 54 billion as a guarantee for Dexia can be arraigned in a day.

Politicians bow to the power of the financial sector and don’t listen to citizens, to the people that they should represent. They constantly give the signal that the bankers and the wealthy are more important. This leads to anger and indifference. Everyday we hear that the "consumer confidence" needs to be repaired, but what about our faith in democracy?

2. How does it work?

The government has rescued banks, but ironically, ever since it lived more than ever in the grip of the financial sector. Due to the money spend to rescue the banks, state deficit had risen. So the states had to lend new money, from the same banks it had just rescued, to pay the other public expenses. The representatives (eg Ireland), were enslaved by the creditors. Unfairly, because without the government, the banks were insolvent to start with.

It seems like democracy has been put aside. There is no longer a plurality of voices, or a balanced input of all the interests. There is - in politics - a strong predominant belief in the beneficial powers of the free market. This led to a ban on public authorities who wish to restrict the harmful effect of the free market. And when reform advisory groups are being established, they exist for the vast majority of people from the financial sector, defender of this free market belief. Academics, trade unions or consumers have very little say in these groups.

Open and transparent communication with the population seems no option when it comes to the decisions about the future of banking. For example, in the parliament - our elected representatives - the commission who wants to examine what went wrong at Dexia gets no access to the most basic information. The former prime minister who conducted the negotiations with the banks, does not even appear in parlement to explain his strategy, the authority that should keep an eye on the banks, refuses parliamentarians access to its documents. Luc Coene of the National Bank is even blamed when he brings out that Dexa will need more public money to survive. Money from you and me. Shouldn’t we be informed about this?

Politicians are not decisive and let themselves be intimidated by the financial world. The Greek population brought the excommunication of the financial market and European leaders over itself when a democratic election stood in the way of imposed cuts. The media copies the discourse of 'the market' and rating agencies. Under this kind of pressure, politicians are more inclined to make decisions in the interests of "the market" than in the interest of society. Thus democracy is made subordinate to the technocracy that is presented as neutral and inevitable.

 

3. What is at stake?

The lack of reforms on the one hand is the result of lobbying by the financial sector, but on the other hand, evidence that the government, citizens are not protected. The way politics is now dealing with the financial crisis, results in profits for the banks and the losses to society. Public services and social protections should be reduced to keep banks afloat, but the financial sector did not impose rules that prevent a crisis like 2008 reoccurring.
Because politicians slavishly follow the financial sector, society is deprived of the chance to help decide where we want to go with our money and our society. Questions like "are the profit expectations of the market more important than our social rights?”, “what should the banking system look like?” and “what is a fair tax?" should have to be widely and openly debated. Because of a democratic deficit those questions now remain unasked or are automatically answered by bankers and technocrats.