Papandreou’s Got A Brand New Bag

Greece has been the poster child for European economic crisis, but former Prime Minister George Papandreou wonders if it’s just a preview of what’s to come. In this TED talk, Georgios A. Papandreou talks about the failure of leadership in global politics and in our globalizing economy. Why is democracy not working?

In ancient Greece, Democracy was the political innovation that allowed us to limit the power, whether it was of tyrants or high priests, their natural tendency to maximize power and wealth. With all their shortcomings, Ancient Greeks believed in the wisdom of the crowd at their best moments. They trusted people. Democracy could not work without the citizens deliberating, debating, taking on public responsibilities for public affairs.

In the talk, Papandreous explains how he had to capitulate during a meeting in Brussels, on April 2010. He had just been elected prime minister, and he had the “unhappy privilege” of revealing that Greece’s deficit was not 6%, as had been officially reported by the previous government, but actually 15.6%:

What followed were the most difficult decisions in my life, painful to me, painful to my countrymen, imposing cuts, austerity, often on those not to blame for the crisis. With these sacrifices, Greece did avoid bankruptcy and the eurozone avoided a collapse.

I still remember how dramatic were those moments which started the last chapter of current European Crisis:

Today, our democracies are facing a moment of truth. They are threatened, and this time it is not the military as it used to be in the past, but the markets that are putting a gun to our collective heads:

Greece triggered the Euro crisis, and some people blame me for pulling the trigger. But I think today that most would agree that Greece was only a symptom of much deeper structural problems in the eurozone, vulnerabilities in the wider global economic system, vulnerabilities of our democracies. Our democracies are trapped by systems too big to fail, or, more accurately, too big to control. Our democracies are weakened in the global economy with players that can evade laws, evade taxes, evade environmental or labor standards. Our democracies are undermined by the growing inequality and the growing concentration of power and wealth, lobbies, corruption, the speed of the markets or simply the fact that we sometimes fear an impending disaster, have constrained our democracies, and they have constrained our capacity to imagine and actually use the potential, your potential, in finding solutions.

The bare truth is that democracy is on retreat. According to the Economist Intelligence Unit’s Democracy Index, one-half of the world’s population now lives in a democracy of some sort. However, in recent years there has been backsliding on previously attained progress in democratisation. The global financial crisis that started in 2008 accentuated some existing negative trends in political development.

In 2011 seven countries in western Europe suffered a decline in their democracy score. The main reason for the earlier decline was the erosion of sovereignty and democratic accountability associated with the effects of and responses to the euro zone crisis. Five of the countries that experienced a decline in their scores are members of the euro zone (Greece, Italy, Portugal, Spain and Ireland). Most dramatically, in two countries (Greece and Italy) democratically elected leaders have been replaced by technocrats.


Papandreou thinks that we are trapped by our collective ignorance. It is a pattern that leaders follow again and again when they have to deal with complex, cross-border problems, whether it’s climate change, migration or the financial system. We have globalized the markets but we have not globalized our democratic institutions. So our politicians are limited to local politics, while our citizens, even though they see a great potential, are prey to forces beyond their control. How do we democratize globalization?

Dani Rodrik has formulated what he calls the inescapable trilemma(1) of the World Economy: democracy, national sovereignty and global economic integration are mutually incompatible: we can combine any two of the three, but never have all three simultaneously and in full.

In a new study Michael Bordo of Rutgers University and Harold James of Princeton University argue that current tensions emerge from another trio of trilemmas. The third trilemma is the most worrying: the potential incompatibility of fixed exchange rates and free movement of capital with democracy:

Germany was able to re-join the gold standard after the first world war thanks to the confidence-boosting Dawes Plan in 1924 dealing with reparation payments. But the harsh fiscal medicine administered during the Depression in its effort to stay on gold contributed to the rise of the Nazis. Britain left gold in 1931, presaging the end of the gold standard, because the austerity it required had become unbearable. (The Economist, “A trio of trilemmas“)

The potential for a similar backlash against the economic and fiscal requirements of Europe’s monetary union is clear.

Papandreou believes that the failure of leadership is due to the fact that we have taken people –YOU– out of the process. Europe, despite its recent failures, is the world’s “most successful” cross-border peace experiment. So he wonders whether Europe couldn’t be an experiment in global democracy, a new kind of democracy.

The word “Idiot” comes from the root “idio,” oneself. A person who is self-centered, secluded, excluded, someone who doesn’t participate or even examine public affairs. Authoritarian leaders, plutocrats hiding their assets in tax havens, or powerful lobbies protecting the powerful few, they all look for the same: It is in their interest that all of us are idiots. Let’s not be.


(1) Trilemma:  A set of three choices of which any two options together are feasible but not all three

papandreouFeatured Image: Papandreou, by Bastian Preusgger


  1. […] The idea of an ‘end of history’ does not imply that nothing more will ever happen. Fukuyama was careful to stress that he was not meaning that or that there would be no countries left in the world that did not conform to the liberal democratic model. Nevertheless he was fundamentally wrong regarding the inevitable supremacy of liberal capitalist democracy. Twenty-five years later, liberal democracy is increasingly beset. […]

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