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European Politicians Have Lied to Their Electors

Peter Watt says it's about time politicians realise they have led their countries up the garden paths for years, and it needs to stop.

By Peter Watt

31 Oct 2011, 10:35

Am I missing something here?  Across Europe, for over thirty years or so countries have been expanding the extent of their governments.  In other words they have been spending more and doing more.  Public buildings have gone up, better pension schemes delivered, welfare systems expanded, public sector wages have grown, food has been subsidised and roads built.  All of this has happened because there has been an unprecedented period of stability and economic growth. 

But there was a problem.  The rate of expansion of what Governments have been offering their people has quietly and insidiously been exceeding the amount of money that they have been collecting in taxes.  In other words they were delivering more than they could actually afford.  

All was well at first in that the extra money needed could easily be borrowed.  The cost of money was low and the supply plentiful.  Banks were happy to lend because they had the money but also because the Euro Club was a safe and stable place to lend to.  After all it wasn’t some unstable third world country!  But quite a lot of this expansion was based on a lie.  A lie told by politicians across Europe who told their voters that it would go on.  But they all told the lie so what would the harm be?  Right across the political spectrum, election after election promises were made.  Vote for us and we will expand this and invest in that.  Vote for us and we will pay you more and tax you less.  Vote for us and everything will be great.  And because the other side were promising, then promises had to be made.  Don’t make the promises and don’t win an election.  

And so people believed the lies and saw their wages rise, their towns flourish and their pensions secured.  Life seemed good and the future rosy.  But eventually the lie had to be found out.  And in the last few years it finally has been.  But even now the politicians can’t tell the truth.  So if you are in Greece or Ireland and your wages or pension has been slashed you wonder what the hell has been going on.  In Italy Portugal or Spain you are suddenly looking at savage austerity packages and working longer before you can retire.  But you could of course equally be talking about the UK where successive Governments over indulged and we are facing our own less savage austerity.  

And yet the extent of the excessive spending across Europe is such that just making the cuts requires more borrowing.  Worse still, as economic slowdown means less tax so we have to borrow even as we cut.  Only now of course, the lending is seen as being more risky.  Hardly surprising when some countries are defaulting in all but name.  And so the borrowing costs ridiculous amounts to service.   But the borrowing goes on.  The lies are still being told.

Meanwhile in the rest of the World Brazil, Russia, India and China have not been sitting back.  Their economies have been expanding and their national coffers filling.  They may have once been seen as economic backwaters but no longer.  Now we go cap in hand hoping that they will help our politicians cover for the lies that they have told.  We need them to bail us out by lending us money so that we don’t have to face up to the truth about the relative strengths of our economies.  

But where does it all end?  How much longer can this go on?  Even when the economies of Europe begin to turn round we are no longer a World powerhouse in the same way.  In fact we will owe trillions of Euros to those very countries who we are both competing and trading with.  Now more than ever we need our politicians to tell us the truth.  If they can’t or won’t then we have a problem far worse than the present travails.  We need politicians who can help us to understand what is going on right now and not lie about it.  Only by helping us to understand can we begin to address the underlying and institutional weaknesses that our economies face.  We need to become more efficient in order to be able to compete.  We need to remember that if we don’t earn our way then we can’t pay ourselves as much as we want.  That if we want to maintain world class welfare systems and invest protect the most vulnerable then we need world class economies that generate the revenues that pay for this. 

But telling us these harsh truths requires brave politicians with vision.  They will need to be able to move from the lazy politics of recent years that simply promises more spending in return for votes.  They will need to explain and define a new relationship of rights and responsibilities between the state and the individual.  They will need to negotiate exactly what the state should and should not usefully do in the future.   And re-assess what the best relationship is between countries and within them.  Compromises will need to be made and they will need to bring justifiably angry electorates with them.

It is not a problem of the left or a problem of the right.  It is a problem that has afflicted politicians from across the spectrum for over thirty years across Europe.  It is a problem that the next crop of politicians in Europe will need to deal with because it seems pretty clear that most of the current crop is incapable of dealing with it.  And while we wait people from Athens to Dublin and Madrid to London will continue to suffer the consequences.