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Global Viewpoint

Prime minister of Greece: 'There is real danger in global austerity'

The prime minister of Greece, George Papandreou, says his country is earning a new credibility after its debt crisis.

August 10, 2010

Athens, Greece

George Papandreou is the prime minister of Greece. He spoke with Global Viewpoint contributing editor Michael Skafidas in Athens last week.

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'The Fourth Way'

Michael Skafidas: When we last met 10 years ago, you worried that if globalization was not brought under democratic control, it would spell trouble, especially for small countries like Greece. Your worry seems to have been justified. “Globalization, which promised so much, and opened so many doors,” you said recently, “ has also brought new inequalities and new risks.” Greece especially suffered from financial speculation over its sovereign debt. Can democracy tame the risks being spread by globalization? Is there a “third way,” or are we bound to have a world at risk, divided between winners and losers?

George Papandreou: Globalization is not a neutral thing driven by some higher force. It is a process which we must guide or regulate and put into a framework of values. Why do we want globalization? How does it help humanity? How do we address global challenges like poverty, climate change and energy security not just from a narrow economic viewpoint, but also from a broader perspective?

In other words, can global capitalism be humanized, or will it just be allowed to run rampant, allowing the forces that dominate to further dominate? If the new forces unleashed by globalization — whether the trillions in financial flows or the global reach of the media and technology — are not democratically controlled, we will have greater inequalities, greater concentration of power — and much greater potential for destruction.

If we are unable to manage the complexities of this new interdependence, the whole system of globalization will short-circuit.

There are those who are able to thrive in this globalized world and those who are becoming more marginalized. I believe the benefits of globalization strongly outweigh the risks, but these risks must be carefully managed. It is critical that globalization should not produce a race to the bottom, but a coordinated means of raising everyone’s standards of living and promoting social justice.

Rather than a “third way,” I would say that we need a “fourth way.” In seeking a “third way” in the 1990s, the excessive reliance on markets as a measure of growth and the assumption that markets are always right turned out not to be right at all. What we need now is a “fourth way” — one that makes sure markets have the freedom to innovate and grow, but above all ensures that democracy is never subordinated to markets.

The “fourth way” depends on responsible, democratic institutions that put global solidarity above national interests. We need to get hold of globalization and decide ourselves where we want to take it.

That means a number of things. We need global governance. Multilateral institutions like the G20 and UN must be more inclusive and more representative. We need to decide just how much interdependence we want and how much self-sustainability we want. More autonomy means more control. For example, if a nation is self-sufficient in energy because of wind and solar power generation, it will be less affected by what happens with global oil prices. It will be less dependent on global prices, less dependent on possible wars and conflicts in the oil-producing countries.

There is also the question of cultural globalization. Just because the younger generation has assimilated global culture through the communication of common symbols, popular music and a common grasp of global problems does not mean they are empowered.