Financial Crises and the State of Emergency: How is the Quality of Parliamentary Democracies in Europe Affected?
Hendrik Hansen, Andrassy University Budapest
The pressure of financial crises on European democracies might affect their democratic qualities in two ways: - Executive powers were pushing parliaments for fast decision making processes by arguing that the crisis causes a state of emergency which does not allow for deliberation. As a result, the balance of power was changed for the detriment of parliamentary power. - Political reactions to the financial market crisis are characterized by a similar phenomenon of “herding” as it exists on financial markets. For 25 years the liberal market paradigm dominated debates in political economy. Since the outbreak of the bank crisis in 2007/2008, a new confidence in the regulatory capabilities can be witnessed; this might be as much an exaggeration as the previous market-paradigm. The paper analyzes how these effects are affecting the rationality of democratic decision making. It does not deny the potentially beneficial effects of the crises on democracies, but it emphasizes the potentially negative effects on democratic decision making processes.