Inverted Populism?

More news from Frans :

Non-commercial Dutch television reported on the Bulgarian (illegal) workers here but also showed the Bulgarian side. In the Dutch newspaper NRC I saw a very small item on Moldavia: it’s Bulgaria squared. One third of the population has left the country already. The emigrants provided the country last year with more than 400 million euro.

Another small but very interesting item was on the critics of a US-committee on the IMF and more specifically the reaction from the IMF. The committee had found that predictions of the IMF on the economic performance of many countries had been no better than would have been a simple copying of the performances of the year before! The IMF reacted stating that the predictions were “already” going to be improved but also referred to the serious problem of self-fulfilling prophecies they encounter: a negative forecast from the IMF results in performance going down!

The disturbing observations of your son on “successful leadership” remind me of the need to write on indirect elections in English too: in the end it’s the problem of populism. Berlusconi can get away with it. With a near-monopoly on the media. Bush can get away with it, - with the distortion of the facts about wmd in Iraq -, for the same reason. Weapons of mass deceiving.

Recently in the Netherlands we met a very curious version of the populism phenomenon. Independence (from politics) of the National Bank and ECB, like the stability pact, have been established with reason: because of short-term populist-inspired considerations politicians could thrive for economically unwanted policies. The Dutch minister of social affairs has now presented an inversion of these relations. Confronted with the fact that a majority of top-economists , including economists who adhere to his party (Christian democrats), publicly state that the policy of retrenchment influences the economy in a negative way he reacted laconically: “Is that what they say? Well, the voters decided different by choosing the parties that now form the government. The voters decide.” So now it is the other way around: the determination itself to cut government spending can be a way to acquire votes! His colleague Zalm (now again in the finance department) in December last year asked for Prodi’s resignation because Prodi said that strictly holding on to the 3% agreement of the stability pact was stupid.

Actually, I think Eddie had it about right, in this process timing is everything. I find entirely comprehensible the frustration expressed by finance ministers in the Netherlands and other smaller EU member states at the way the bigger members get to break the rules with apparent ease, and I understood Solbes fury with Prodi for seeking votes in Italy by making what seemed to me to be cheap pro-growth arguments. Both parties are in fact right, the problem is the when. Solbes is absolutely right in indicating the parlous state of many EU state finances, medium term. But Eichel is also right (in part), right now, since the important thing is to stop Germany's slide. So it's a question of preparing public opinion, not being driven by it. The European public needs to be brought in on the problem. There are no free lunches here, and loosening of the fiscal reins now, will have to be paid for later. The play would be to try - by turning the magneto - and have more to pay with. But for that future to be realised Germany needs to do far more than open the fiscal tap. And if an exception is to be made for Germany, then it needs to be clear that this is an exception, and it is for Germany, and only for Germany. What else could European solidarity mean?