Crashed: How a Decade of Financial Crises Changed the World

by Adam Tooze

In mid-November the governments of two eurozone members were taken over by men without democratic credentials whose main qualification was that they were undeniably market conforming.50 Critics pounced on the web of connections that tied key eurozone decision makers to Goldman Sachs and its bond market dealings in Europe.51 It was surely more than coincidence that Monti, Draghi and Otmar Issing, Merkel’s favorite economic adviser, had all worked for Goldman. But to describe this simply as a defeat of democracy at the hands of global markets would be misleading, to say the least. There have been many governments felled by market pressure. But Geithner was right. The driving force in the eurozone in the fall of 2011 was political, not economic. Berlusconi had to go because otherwise there would be no agreement from the “German public,” at least as represented by Merkel’s government, to a bigger European firewall. The gutting of Greek and Italian democracy in 2011 was the result of a toxic combination of massive financial integration with Berlin’s dogged insistence on intergovernmentalism. The lack of overarching structures with which to compensate for the asymmetric effects of the crisis enforced conformity to Berlin’s vision of financial probity, one state at a time. Around the chancellery in Berlin, in the wake of the changes in Greece and Italy they were not bemoaning the oppressive force of markets. Senior officials could be heard boasting: “We do regime change better th...

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