If the euro is to be successful, it has to be an economic project that
is consistent with, and even reinforces, other fundamental values. It has to strengthen democracy. But the euro has done the opposite.
The most powerful institution in the eurozone is the European Central Bank, which was constructed to be independent-not answerable to or guided by elected leaders-another neoliberal idea that was
fashionable at the time of the construction of the euro. Though it
remains fashionable in some quarters, it is increasingly being ques-
tioned. As we will see in chapter 6, the countries that performed best
during the global financial crisis were those with mnore accountable
central banks.
The actions of any central bank have large political and distribu-
tive consequences seen most clearly in times of crises. Central banks
are good at cloaking their decisions in jargon suggesting that they are
simply implementing their mandate. But there are choices in how
they implement that mandate. Though they would almost surely deny
it, the ECB's decision to shut off funds to the Greek banking system in
the summer of 2015 was an intensely political act.
COurse.
The growing democratic deficit is seen most obviously in the fact
that when given the opportunity, the countries of Europe have repeat-
edly rejected the policies being imposed on them. In 2015, 6l percent
of the electorate in Greece voted to reject the conditions imposed,
and in Portugal and Spain similar proportions supported candidates
opposed to austerity. But opposition is evident, too, in numerous
other elections, including in Italy, where voters turned out the party
supporting austerity; they elected parties calling for an alternative
In spite of these elections, the policies remained effectively
unchanged. In Portugal, matters were even worse: the president ini-
tially refused to install the antiausterity coalition on the grounds that
it contained anti-euro parties, even though, having won 62 percent of
the votes, the coalition controlled the parliament.
In each country, the newly elected government was told in effect
THE EURO: THE HOPE AND THE REALITY
59
If the euro is to be successful, it has to be an economic project that
is consistent with, and even reinforces, other fundamental values. It
has to strengthen democracy. But the euro has done the opposite.
The most powerful institution in the eurozone is the European
Central Bank, which was constructed to be independent-not answer-
able to or guided by elected leaders-another neoliberal idea that was
fashionable at the time of the construction of the euro. Though it
remains fashionable in some quarters, it is increasingly being ques-
tioned. As we will see in chapter 6, the countries that performed best
during the global financial crisis were those with mnore accountable
central banks.
The actions of any central bank have large political and distribu-
tive consequences seen most clearly in times of crises. Central banks
are good at cloaking their decisions in jargon suggesting that they are
simply implementing their mandate. But there are choices in how
they implement that mandate. Though they would almost surely deny
it, the ECB's decision to shut off funds to the Greek banking system in
the summer of 2015 was an intensely political act.
COurse.
The growing democratic deficit is seen most obviously in the fact
that when given the opportunity, the countries of Europe have repeat-
edly rejected the policies being imposed on them. In 2015, 6l percent
of the electorate in Greece voted to reject the conditions imposed,
and in Portugal and Spain similar proportions supported candidates
opposed to austerity. But opposition is evident, too, in numerous
other elections, including in Italy, where voters turned out the party
supporting austerity; they elected parties calling for an alternative
In spite of these elections, the policies remained effectively
unchanged. In Portugal, matters were even worse: the president ini-
tially refused to install the antiausterity coalition on the grounds that
it contained anti-euro parties, even though, having won 62 percent of
the votes, the coalition controlled the parliament.
In each country, the newly elected government was told in effect