MARKETS DO NOT COUNT MORE THAN DEMOCRACY
by Emiliano Brancaccio (Sannio University, Italy) and Mauro Gallegati (Marche Polytechnic University, Italy)
The political crisis in Italy has reopened the Pandora’s box of eurozone instability and brought to the fore the unresolved problems that we and many others had already highlighted in the Economists’ Warning (FT September 23, 2013). We have always considered the rise of reactionary, ultranationalist and xenophobic political parties in Europe to be disastrous. But an equally great danger is that voters have the feeling that their choices count less than the bets of financial market players. In order to alleviate this risk it is necessary to take all the available measures of “financial repression” to reduce the interference of market volatility on future political decisions on the single currency. In particular, as soon as the political struggle on the eurozone and the related financial instability re-emerge, we invoke the immediate application of Article 65 of the Treaty on the functioning of EU, which admits the introduction of controls on capital movements for reasons of “public security”. This provision was already adopted during the crises of Cyprus and Greece, even though it was too late. Whatever our opinions on the future of the euro, applying urgent capital controls at the first signs of speculative pressure on Italy and other countries at risk of abandoning the euro would allow for an orderly development of the political debate on the destiny of European institutions and alleviate the tremendous suspicion of so many citizens that the markets count more than democracy.
Emiliano Brancaccio (Sannio University, Italy),
Mauro Gallegati (Marche Polytechnic University, Italy)
– In italiano, si veda anche l’intervista a Emiliano Brancaccio su Micromega del 30 maggio 2018: “Applicare subito l’art. 65 del Trattato sul funzionamento dell’UE per il controllo dei movimenti di capitale”.