In the past few weeks, Europe’s political class might have felt inclined to follow Bertolt Brecht’s famous advice for beleaguered governments: dissolve the people, and elect another.
Some, it could be argued, are already well advanced down this road. No sooner had Greece’s prime minister suggested giving voters a say on the bail-out package imposed by the markets, than he was swiftly dispatched – and replaced by an unelected technocrat. The ignominious career of Italy’s premier was ended by roughly the same mechanism.
The sovereign debt crisis that has engulfed the eurozone is imposing an immense toll on people’s jobs, livelihoods and general sense of security. It is even threatening the legitimacy of democratic institutions.
As CIPFA chief executive Steve Freer argues in this issue of Public Finance (see cover feature, December issue), the way public money is allocated and managed matters hugely to people’s lives. The riots and protests in response to austerity measures demonstrate this. And no country – in or outside the eurozone– is immune.
Here in the UK, the government’s attempt to blame soaring unemployment and near-zero growth on the sovereign debt crisis is gaining little traction. As the OECD and others have pointed out, our economic woes long predate the European Union’s troubles. They have also been worsened by the absence of interventionist policies to promote growth (see opinion, December issue).
From the Occupy encampment in the City of London to the public sector pension protests, anger at government inaction is growing. The Cabinet Office’s kind offer of a 15-minute officially-sanctioned strike has done little to assuage the unrest.
So what can be done? Chancellor George Osborne shows no sign that, in his Autumn Statement, he will come up with a ‘big bazooka’ to kick-start the economy and ease the public’s pain. Nor are EU or G20 political leaders doing much more than squabbling among themselves.
As bond markets go into freefall – and a collective sense of panic and denial overwhelms world leaders – it is important that those in charge of the finance function keep their heads.
Freer’s initiative (see news, December issue), which is designed to transform public financial management globally – and shine a much-needed light into hitherto dark corners – could be an important part of the long-term solution.
At the very least, it could force fiscal problems out into the open before, as now, they reach boiling point. Which has to be better than hoping that they – and the populace – will just go away.
