Posts Tagged central banks
The European Central Bank’s Darth Draghi descended upon Madrid on Tuesday for a pep talk, saying that Spain had successfully stabilised its banking system and that borrowers with top-notch credit ratings should be seeing an easing of the credit drought by the end of the year. He saluted new laws making it easier to fire workers and did his best Bill Clinton impression, feeling the pain of the almost 60% unemployed youth.
After a closed hearing before a select group of MPs in the Chamber of Deputies, he told reporters that “Spain is on the right track,” while darkly warning that all EU countries still had far to go and called on PM Rajoy to put together a “credible, detailed plan” on further spending cuts.
Nothing really new here. Typical ‘Good work, now cut more’ generalities.
So why was the meeting held as a closed session?
It was reported ahead of the meeting by El Pais that according to parliamentary sources, the central bank had requested the secrecy as Draghi had wanted a similarly restricted format to that which he used when he spoke to Germany’s Bundestag.
The decision to keep the meeting closed to the public, with proceedings to be issued in none of the normal formats, provoked an angry response from left-wing deputies, who announced that they would just “retransmit” Draghi’s comments by Twitter.
All opposition parties, including the Socialists, denounced the move (although one has to ask if PSOE would really have done any different). The Socialists’ spokesman, Valeriano Gómez filed a formal protest, while the Plural Left (United Left and Greens) described the efforts at a closed session as a “failure of democracy”.
Shockingly, in response, the Speaker of the House installed mobile-phone jammers to prevent deputies from live-tweeting. So left-wing deputies Alberto Garzón and Joan Coscubiela just sneakily filmed the session on their iPhones and later uploaded the videos to YouTube.
The kerfuffle prompted Draghi to subsequently deny that he had ever wanted a closed session and that he would have been perfectly happy for it to happen in the open, adding that no harm had been done by it being posted on YouTube. See, look, I’ll even post my speech up on the ECB website.
On the one hand, the Sith Lord’s speech was so full of austerian banalities that it makes you wonder why whoever it was requested the meeting be held in secret in the first place.
On the other hand, if Draghi’s comments really were going to be incendiary and have such import for the Spanish political economy, then such words – if Spain is still a sovereign democracy – need to be said publicly.
Particularly as the ECB has such form since the crisis with secret letters to governments ordering them to liberalise their economies or commanding them to take a bail-out, or quiet phone calls to domestic banking bosses directing them to turn off the taps, citizens have every reason to be frightened of Frankfurt’s preference for the shadows.
In 2011, when former Eurogroup chief Jean-Claude Juncker was at a small Brussels think-tank function, forgetting that reporters were present, he for once spoke quite frankly about the need for secrecy, saying: “I’m ready to be insulted as being insufficiently democratic, but I want to be serious.”
Economic policy discussions were simply too sensitive, he said, potentially putting “millions of people at risk”, to have them in public. “I am for secret, dark debates,” he joked at the time, adding that despite his Catholic upbringing, he had often “had to lie.”
In the end, Draghi’s comments appear to have been largely banal. But this is the point. European leaders have become accustomed to operating beyond the glare of parliaments and the public, both for discussions of great import and for the prosaic.
The demand for state secrecy in economic matters is expanding – a sharp turn away from principles of open government, which require that citizens have a right to access documents and proceedings of government to assure democratic, public oversight.
It should be obvious that limitations on state secrecy, a core principle of democrats since the Enlightenment, is also required to prevent corruption.
At a time when great swathes of the current Spanish and Greek political classes stand accused of protecting themselves and those close to them from the taxes that mere mortals are subject to – and Draghi himself is caught up in a similar scandal of his own, we must be especially vigilant and on guard against what increasingly appears to be unblushing criminality amongst our leaders.
Enough clumsy cloak and dagger, Draghi. At least talk pretty to our face before you screw us.
For more details on Draghi’s Super-Secret Secret Squirrel meeting, just check the #openDraghi hashtag.