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Revolutions in the South of Europe and the economic crisis

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Club Med for PIGS ?

Hot summers, wonderful beaches, marvellous buildings, exquisite food ... the South of Europe calls millions of tourists every year. They admire the relaxed lifestyle, long breaks and heated discussions. These clichés easily turn into prejudices about lazy and backward Greek, Italian Spanish or Portuguese. But people in the South cry for modernization of society, and get rid of a hierarchical structure of society where politicians, business and trade unions focus on wielding power, seeking to exchange concessions or mutual benefits, rather than planning and managing progress. Growing discontent cannot be paid anymore by easy solutions, but requires a real change. This opens a historical opportunity to the South to get ahead, and Europe can and should give a hand.


The tourist adverts of Club Med, versus the PIGS cliché

The typical tourist advert sells long warm summers, wonderful beaches, marvellous buildings, exquisite food ... as the main attraction of the South of Europe. No wonder that Portugal, Spain, Italy or Greece are the main attractions of tourism worldwide. Yet, the backside of this Club Med image is another cliché. The admired relaxed lifestyle, long breaks and heated discussions turn into prejudices of lazy and backward people. In the economic press, the Club Med turns into the stigmatising PIGS (the infamous acronym for these countries) , as if the economic situation could be explained by personal attitudes and culture only. The economic crisis has only reinforced these images. In the end, “Greece tricked the accounts, what do you expect ?”

Needless to say that these clichés reflect easy prejudices, especially since the experiences of the PIGS is very diverse. Portugal or Italy are stuck in prolonged economic stagnation. Greece and certainly Spain suffer the aftermath of fast economic growth leading to buoyant booms. But if there is a common element behind these crises, it is the failure to adjust in time to the advent of the euro. Economic, social and political systems have continued to act in the same way as usual, unwilling to perceive the changes in society.

A common characteristic of society in Southern Europe is its hierarchy. Politicians, trade unions, and business are more interested in wielding the power they have conquered at the expense of each other and of society at large. They then jealously guard this power to defend their privileges. The consequence of such a system is an in-bred caste of politicians that run the government for decades. Political debates center on topics that are long out of date : Berlusconi still warns of communists, and left-wing politicians just shout back about fascism. Businesses are happy to pass money to the politicians they know to get their companies a benefit. No surprise that such a system is rife with corruption and tax evasion. Scandals occur in many town halls and regional government palaces. Trade unions protect jobs at the cost of the young and unemployed, asking them to wait to get a fixed job, while working in unprotected and underpaid jobs. No wonder people queue for a safe state job, and prefer to join the ranks of administration rather than be employed in private enterprises. People in the South have always protested against this kind of rent-seeking class. The recent political history of these countries is one of dictatorships that oppress moves to modernize the country. Going further back in time, several revolutions around the Mediterranean have been silenced that wanted to install more democratic systems. This burden of history has never gone entirely away, and the cries for modernization are still kept at bay by classes that want to keep things as they are. Growing discontent was usually controlled with easy solutions, when the state would indebt itself to pay for more social services, unemployment benefits, or look for a fast devaluation through high inflation or letting the currency fall.

Angela Merkel : bash the system and you will be supported everywhere

But now, European integration has created a new Erasmus generation that has not just studied abroad, but also experienced more modern societies with more possibilities. They know that a different type of society is possible. For this generation, the current crisis sharpens this division. But this time, Southern Europe will need to modernize for real as the easy option is not available anymore. The euro imposes a real adjustment that cannot be simply paid off quickly. This opens a historical opportunity to get ahead, and most Greek, Italian, Spanish and Portuguese will be most happy if this forces political and social change for the better. Europe should not miss this opportunity, and give a hand in this modernization. Forcing adjustment by being tough is not a bad strategy, as long as it forces modernisation. Asking cutbacks and suffering to the people is not. In summary, an advice to Angela Merkel : bash the system and you will be supported everywhere in the South, but bashing just the people and ask for tears and cries, and the South will be stuck in the same mess as before.

Headline photo : Pasotraspaso, Flickr


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Peter CLAEYS

Lecturer in Economics at the University of Barcelona, where he does mainly research on fiscal policy, international economics and EMU, and also teaches Statistics and Econometrics. He holds a PhD in Economics from the European University (...)

On the internet

Merkel’s Clichés Debunked by Statistics
Spiegel

’PIGS’ crisis an opportunity for euro zone
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Europe’s debt crisis: Storm clouds over Club Med
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