Foreign and Defense Policy, Europe and Russia

Francis Fukuyama explains why saving the euro is a ‘fairy tale’

The EU isn’t a dysfunctional marriage between hard-working, thrifty northern Europe and lazy, profligate southern Europe. Rather, it’s a dysfunctional marriage between a clientelistic and non-clientelistic Europe, says political scientist Francis Fukuyama.

And that’s why, he says, “the whole project of deepening Europe into a fiscal union seems to me like such a fairy tale. Outside pressure will never succeed in bringing about change by itself unless it can be allied to internal forces that themselves want reform. In Italy, these forces at least potentially exist, but in Greece they seem altogether absent.”

See, in clientelistic systems, political parties reward supporters with individual benefits, such as jobs, when they get in office. It is Chicago-style democracy.

In my view, clientelism should be distinguished from corruption proper because of the relationship of reciprocity that exists between politicians and voters. There is a real degree of accountability in a clientelistic system: the politician has to give something back to supporters if he or she is to stay in power, even if that is a purely private benefit. Clientelism is not the product of a cultural proclivity or a failure of politicians to understand how a modern democratic political system is supposed to operate. Rather, it is often the most efficient way to mobilize relatively poor and uneducated voters and get them into the polling place. Such voters often care less about programmatic policies than an immediate personal benefit like a job or the equivalent of a Thanksgiving turkey.

Here is how it works in Greece. And change in Greece will take a lot more time than the bankers will offer.

Solving the issue of clientelism would address one of the long-term sources of the current crisis. But any fix would have an effect only over a prolonged period, and is therefore not terribly relevant to the short-term future of either Greece or the EU. If the Greek public wants to reject the austerity agreement, which seems pretty clear, the country will be heading for outright default and exit from the euro. I always believed that exiting the euro was Greece’s only realistic option, and one that could have been done in a reasonably orderly way had it been undertaken some months ago. Now, it is being pushed as the preference of the extremist parties, and if it happens, will probably occur in a very messy way with bad consequences for the stability of Europe as a whole. So neither the long- or short-term futures look terribly bright.

I am certainly convinced that the euro cannot survive in its current form without some sort of fiscal union involving common euro bonds and fiscal transfers. But the north sees the clientelistic states for what they are, even if they cannot articulate their views quite as lucidly as Fukuyama, and seems unwilling to go that route.

2 thoughts on “Francis Fukuyama explains why saving the euro is a ‘fairy tale’

  1. James,
    You seemed to be convinced of certain things regarding the euro and its survivability but since you are so meticulous on your graphs I challenge you to do the following:
    Find out and post why actually England did not join the euro (tip: Bank of England govs)
    Find out why the National Bank of Greece is not national but like the FED with “benefits”
    Find out about the FED relationship with the Bank of England and ECB
    Read the horrific terms of the troika’s “mnimonio” or memorandum and post the 5 worse offences
    Compare, with a graph, the gold reserves of the 17 euro members since 2000
    Compare the GDP to national debt of the euro members
    Then, you will be more convinced of the euro’s marionette-banker games and of their actual puppeteers.

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