#Background
Kirkovia is a fictional parliamentary republic. Over the past decade, thanks in part to a series of deregulatory banking reforms instituted by successive Liberal Party (LP) governments, the Kirkovian economy grew rapidly on the back of a banking and financial services boom. Economic growth was rapid, and this helped to finance an expansion of public services. It was, however, underpinned by high-risk, highly leveraged borrowing, lending and the sale of savings products which left Kirkovian banks with liabilities which vastly outweighed their assets. Even a small shock in the global financial system could cause a banking meltdown in Kirkovia.
In the midst of a wider, global, financial crisis, this is precisely what has happened. In order to prevent complete economic collapse, the government has been forced to take control of the banks, bailing them out to the tune of billions of dollars. The Kirkovian economy is in crisis, job losses have been rapid and the government has been forced to approach the IMF to agree an emergency loan. This has been coupled with a rapid contraction of the welfare state and the institution of ‘austerity’, in an attempt to reduce public spending and recoup some of the colossal expense of the nationalisation and bailout of the banks. These measures are opposed by a growing anti-austerity movement.
Recent exploration of Kirkovia’s territorial waters has revealed the presence of previously untapped oil and gas deposits. The sale of extraction licenses, and the encouragement of growth in Kirkovia’s oil, gas and petro-chemicals industries could attract a much needed cash injection at a time of grave economic instability. While such a move is supported by the LP, and the Social Democratic Party (SDP) – many of the SDP’s affiliated trade unions represent workers in these sectors – it is staunchly opposed by a substantial environmentalist movement.
[[Next->Scenario]]#Scenario
The banking bailout has all but bankrupted the Kirkovian state. To secure its IMF loan, Kirkovia’s Liberal Party (LP) government has instituted a series of severe public sector cuts and reforms which have included freezing public sector pay, imposing harsh new conditions on welfare claimants and seeking private buyers for key public utilities. These measures have deepened grievances in a population already angry about the banking crisis, which is widely viewed as having resulted from poor decision-making, a lack of regulatory oversight and, crucially, government complicity and incompetence. The government’s austerity programme is opposed in the Chamber of Deputies by the main opposition party, the Social Democratic Party (SDP), as well as by a small number of Radical Left (RL) deputies.
It has also emerged that the government is in talks with a multinational oil company – International Petroleum – about expanding its operations in Kirkovia. The government is keen to encourage the expansion of what it believes could be a key growth industry, which it hopes could kick-start economic recovery and help plug the hole in the state’s finances. In this endeavour, it has the support of the SDP, many of whose members and affiliates are employed in the oil, gas and petro-chemicals sector. However, any expansion in oil, gas and petro-chemicals is staunchly opposed by Kirkovian environmentalists. In the Chamber of Deputies, this opposition is given expression by a very small number of Green Party (GP) deputies.
Over the last several days, Kirkovia’s anti-austerity and environmental movements have joined forces and converged on the capital, under the banner of the ‘People’s Assembly’. Thousands of protestors have set up a permanent camp in a large public park adjacent to the Chamber of Deputies. They are joined by RL and GP deputies, and insist that they will not disperse until either a series of demands are met (See Figure 1) or the government resigns.
[[Next->People’s Assembly Demands]]#Figure 1: People’s Assembly Demands
We, the members of the People’s Assembly, denounce the broken system which has plunged the people into a crisis not of their own making. The current system is undemocratic and unsustainable. We reject, absolutely, the logic and cruelty of austerity and condemn to the dustbin of history a political and economic model which privileges profit over both people and planet. We make the following demands:
0. Full financial democracy, the break up and democratic control of all banks.
0. An immediate end to austerity and the restoration of all state benefits and services under public ownership.
0. Redirection of military spending to health and education.
0. Systemic and political reform and the institution of people’s assemblies for participatory budgeting.
0. An immediate and complete ban on any new oil and gas extraction and petro-chemical production, with a complete shut-down of all non-renewable production within five years.
We remain resolute, and make a firm commitment to stay in this park until either our demands are met or the current government commits to make way for one that will fulfil them.
This is a fully democratic, non-hierarchical movement. We are many. They are few.
[[Next->People's Assembly More]]#
Over the course of a week, the People’s Assembly beds in for the long haul, establishing working groups to oversee kitchens, sanitation and public outreach. It has caused a great deal of disruption and gained media traction, including through a series of direct actions which have brought sections of the capital to a standstill for days at a time. Its flagship has become the holding of daily public meetings and debates. Polling reveals a high degree of public sympathy for the Assembly’s demands and support for the government at historic, record-breaking lows. Every day new protestors continue to arrive, and protests have begun to spread to other parts of the country.
It has become clear the government cannot ignore the People’s Assembly and that it is not merely going to go away. The government must now decide how to deal with the Assembly and its demands. To add pressure to an already volatile situation, the next credit tranche of Kirkovia’s IMF loan is due – and much needed – and the IMF are demanding commitments to further public sector restructuring and reductions in spending before it will release it.
[[The government acquiesces to the protestors’ demands in full->Government Acquiesces]]: A risky course of action which will likely bring it into conflict with the IMF, but the People’s Assembly’s demands are popular and implementing them in full may help to salvage what is left of the rapidly dwindling support for the government.
[[The government invites representatives of the People’s Assembly to negotiate->Government Invites]]: Owing to IMF conditionality, the government is simply not in a position to acquiesce to the protestors’ demands in full, even if it were inclined to do so. But it might be able to offer some form of compromise.
[[The government sanctions a robust police response->Government Sanctions]]: The protest has become a public order issue, and police are called in to break up the People’s Assembly and disperse the protestors.
#The government acquiesces to the protestors’ demands
The government acquiesces to the protestors’ demands in full: A risky course of action which will likely bring it into conflict with the IMF, but the People’s Assembly’s demands are popular and implementing them in full may help to salvage what is left of the rapidly dwindling support for the government.
Outcome: The government makes a rapid U-turn on its austerity programme, pledging to restore in full all of the public services it had previously cut, committing to public sector pay increases and immediately ending negotiations with International Petroleum. It proposes strict new rules for the banking sector, including measures to insure that no bank ever again becomes ‘too big to fail’, and commits to other structural and political reforms. The ruling Liberal Party is wracked by fraught internal debates about this change in policy direction and eventually splits rancorously. For its part, the SDP supports moves to end austerity, but expresses grave concern about the implications for workers in Kirkovia’s petro-chemicals sector, many of whom have walked out on strike. A new crisis in Kirkovian politics reaches its peak when the IMF refuse to release the next credit tranche until the government re-commits to public sector re-structuring.
The government collapses and the Prime Minister is forced to call a general election. With polls showing that the Liberal Party is set for its biggest ever defeat and with economic and political crisis deepening, it appears that the government has miscalculated.
[[Start Again]]
#Government invites representatives of the People’s Assembly to negotiate
The government invites representatives of the People’s Assembly to negotiate: Owing to IMF conditionality, the government is simply not in a position to acquiesce to the protestors’ demands in full, even if it were inclined to do so. But it might be able to offer some form of compromise.
Outcome: The government extends an invitation to the People’s Assembly to participate in talks. The Assembly calls an emergency public meeting to discuss the government’s offer. Hours of heated debate follows. Many in the movement are willing at least to explore the possibility of negotiations. Others are staunchly opposed to any negotiation at all. Still others are concerned to discuss which demands should be prioritised and what red lines established in the case that negotiations do go ahead.
Eventually, the Assembly comes to a consensus decision: that it is prepared to send delegates to discuss the movement’s demands with the government; that those delegates will represent the movement in all its diversity; that they will not be empowered to make decisions on behalf of the Assembly; and that any offer from the government must be brought back for debate and agreement by the whole Assembly.
Assembly delegates meet with the government. After several days of discussion, the government spells out what it is willing and able to offer, on the basis that the protest is brought to an end.
[[Next->Government offer to the People’s Assembly]]#The government sanctions a robust police response
The government sanctions a robust police response: The protest has become a public order issue. Police are called in to break up the People’s Assembly and disperse the protestors.
Outcome: An order is issued for protestors to disperse, which is refused. Police then begin to move in on the park in large numbers, where they are met with non-violent resistance from protestors. The police charge with batons drawn, and images of bruised and bloodied protestors are beamed around Kirkovia, and the world. What support was left for the government collapses almost completely. Protestors begin to engage in running battles with the police and riots develop, with police eventually firing tear gas and deploying water cannon. Rioting and protests continue across the country for several days and nights. It quickly becomes clear the government has lost control. Several members of the government resign in protest at the Prime Minister’s handling of the situation.
The Prime Minister has little choice left but to order police to stand down before going on television to address the nation. She announces that she will dissolve the Chamber of Deputies and call a general election. The central question she asks voters to consider is ‘who governs Kirkovia’? The second credit tranche of the IMF’s loan is delayed until after the election.
[[The government calls a general election->General Election]]: With political crisis deepening, the Prime Minister is all but forced to dissolve the Chamber of Deputies and call a general election. She does so asking voters to answer the question ‘who governs Kirkovia’?
#Government offer to the People’s Assembly
My government has now concluded several days of productive discussions with representatives of the so-called People’s Assembly. We entered into these discussions in good faith, and with a listening ear. I was – and remain – of the opinion that compromise could be found in order to bring this protest to a peaceful conclusion. Today, I can confirm that my government is willing to make the following commitments:
0. A full commission of inquiry into banking malpractice and reform.
0. A review of welfare spending with a commitment to maximising protections for the most vulnerable, in line with current budgetary constraints.
0. Ringfenced funding for the treatment of serious health conditions, such as cancer.
0. A referendum on voting reform.
0. Any new contract with International Petroleum to include a levy for investment in renewables.
This is a generous and sincere offer on the part of my government. It is also a reasonable offer which takes account of the deep difficulties our country currently faces. In this time of great economic instability, it is my sincere hope that it provides the basis for us to move forward together, to restore trust in our institutions, and begin the vital work of recovery.
K. Krab, Prime Minister
[[Next->Delegates take the government’s offer to the People’s Assembly]]#Delegates take the government’s offer to the People’s Assembly
Delegates take the government’s offer to the People’s Assembly and an emergency public meeting is called. Debate once again rages for several hours. Some within the Assembly are keen to accept the government’s offer outright, though it quickly becomes clear they are in a minority. While others believe that the government’s proposals do no go far enough, they argue that they should be accepted as a basis from which to push for further reform. These arguments too are quickly dismissed. There are those for whom an immediate end to austerity is non-negotiable; those for whom no further expansion of Kirkovia’s petro-chemical industry is an absolute red line; those who remain resolute in arguing that they never wanted these negotiations to go ahead in the first place; and a whole range of opinions in between are expressed.
Eventually, it becomes clear that support for the government’s proposals is limited in the Assembly. Proponents of compromise with the government (including several of the delegates involved in the negotiations) press for a vote on the proposals. A vote is held. By an overwhelming majority, the Assembly signals its rejection of the government’s offer.
With any hope of compromise thwarted and political instability deepening the government is now faced with a choice as to what to do about the People’s Assembly, which shows no signs of diminished resolution.
[[The government sanctions a robust police response->Government Sanctions]]: The protest has become a public order issue, and police are called in to break up the People’s Assembly and disperse the protestors.
[[The government calls a general election->General Election]]: With political crisis deepening, the Prime Minister is all but forced to dissolve the Chamber of Deputies and call a general election. She does so asking voters to answer the question ‘who governs Kirkovia’? #General Election
The government calls a general election: With political crisis deepening, the Prime Minister is all but forced to dissolve the Chamber of Deputies and call a general election. She does so asking voters to answer the question ‘who governs Kirkovia’?
Outcome: A general election has been called. The RL and GP – many of whose members have been active participants in the People’s Assembly – convene an emergency meeting to discuss an electoral alliance. This is quickly agreed and the formation of a new Coalition of the Green Left (CGL) is announced. This new party adopts the demands of the People’s Assembly as the basis for its political programme, and seeks the formal backing of the Assembly. A public meeting of the Assembly is hastily convened and debate again ensues. Several members of the movement insist that it should play no part in electoral politics, but instead should hold power to account and continue to press for full, radical systemic change from without. Others, many themselves members of the new CGL, argue that the party could and should provide a basis by which the Assembly can gain a democratic mandate for its programme. The debate reaches its climax, and a vote is called.
Both the LD and the SDP are campaigning hard – the latter on a popular anti-austerity policy programme. It is likely that the CGL will need the full backing, organisational capacity and enthusiasm of the People’s Assembly behind it if it is to have a chance of winning power.
[[The People’s Assembly votes not to support the CGL->Assembly Vote No]]: Those who believe that the People’s Assembly should stand above and not involve itself in party politics win the day. The Assembly will not formally campaign for any one party in the election.
[[The People’s Assembly votes to support the CGL->Assembly Vote Yes]]: The CGL is, eventually and resoundingly adopted as the electoral wing of the People’s Assembly, with members of the Assembly committing to campaign actively for the party in the election.
#Assembly Votes Against
The People’s Assembly votes not to support the CGL: Those who believe that the People’s Assembly should stand above and not involve itself in party politics win the day. The Assembly will not formally campaign for any one party in the election.
Outcome: The CGL campaign valiantly, but without the full backing of the People’s Assembly the party struggles against a surge in support for the more established SDP. The LP, widely blamed for the country’s present difficulties, perform poorly. The SDP are the biggest winners, taking the single largest number of seats in the Chamber of Deputies. While the election is somewhat disappointing for the CGL, they do beat the LP into second place. Although it has the largest number of seats, the SDP does not have an outright majority, and it enters into coalition talks with the LP, with whom they share a particular concern about protecting and expanding Kirkovia’s petro-chemicals sector.
During talks between the SDP and LP, the IMF calls a meeting with both parties to re-iterate conditions attached to its loan. Despite having stood for election on a staunchly anti-austerity platform, the SDP signal they are willing to comply with these conditions in order to secure the release of the second credit tranche. The SDP and the LP reach agreement. They publish a programme for government which includes ongoing public sector pay freezes and only modest changes in other areas of public spending, as well as a commitment to securing agreement with and investment from International Petroleum.
The People’s Assembly reacts with outrage. A public meeting signals a recommitment to anti-austerity and environmental protests. Morale is low however, particularly among the movement’s CGL members, many of whom are bitter about the lack of support afforded to them during the election. The movement is riven by splits, fails to regather its momentum and protest gradually peters out. Kirkovia likely faces several years of deepening austerity.
[[Start Again]]
#Assembly Votes in Favour
The People’s Assembly votes to support the CGL: The CGL is eventually, and resoundingly, adopted as the electoral wing of the People’s Assembly, with members of the Assembly committing to campaign actively for the party in the election.
Outcome: Building on the momentum that the People’s Assembly movement has gathered in recent weeks, the CGL launches itself into a vibrant and well organised election campaign. Thousands of young, enthusiastic canvassers pound the pavements for the CGL, where they find their message resonating with voters. The SDP struggle to compete with the dynamism and energy of the CGL and the People’s Assembly. The LP are roundly blamed for the crisis, and their message of ‘frugality and responsibility’ fails to resonate. The CGL secure a historic electoral victory, winning a majority of seats in the Chamber of Deputies. The SDP come second, while the LP slump to just a handful of seats. CGL deputies elect a new cabinet from amidst their number with two deputies – Klinton Karlton, formerly of the RL, and Karey Karpington, formerly of the GP – sharing the office of Prime Minister. There are jubilant scenes as the People’s Assembly takes to the streets to celebrate with a series of rallies.
This honeymoon period comes to an abrupt end. Public finances remain in a dire state, and a series of immediate and critical decisions must be taken. The government’s first meeting is with the IMF, who re-iterate the conditions for the release of the second credit tranche. The IMF signals, however, that it may be willing to re-examine and soften some of its harshest conditions. The second meeting is with International Petroleum, who are keen to salvage a deal, and are prepared to make good on the previous government’s demand of a levy for investment in renewables.
The CGL government must now decide if and how it can reconcile its manifesto commitments with the demands of the ongoing economic crisis.
[[Next->Government Decision]]#
[[The government rejects both the IMF’s conditions and International Petroleum’s offer of investment->Government Rejects Both]]: Staying true to the People’s Assembly’s demands, CGL ministers remain steadfastly committed to ending austerity and to ending oil and gas extraction.
[[The government reaches agreement with both the IMF and International Petroleum->Government Agrees Both]]: Despite their commitment to the People’s Assembly’s demands, CGL ministers feel forced to negotiate to secure the release of IMF credit and the much needed cash injection from a deal with International Petroleum.
[[The government reaches agreement with the IMF, but not with International Petroleum->Government Rejects Petroleum]]: CGL ministers decide that environmental commitments ultimately outweigh the imperative of ending austerity.
[[The government reaches agreement with International Petroleum, but not with the IMF->Government Rejects IMF]]: CGL ministers decide that the commitment to ending austerity ultimately outweighs the imperative of ensuring an immediate cessation of new oil and gas extraction. #Government Rejects Both
The government rejects both the IMF’s conditions and International Petroleum’s offer of investment: Staying true to the People’s Assembly’s demands, CGL ministers remain steadfastly committed to ending austerity and to ending oil and gas extraction.
Outcome: With no release of IMF credit and no investment from International Petroleum forthcoming, the CGL government opts instead for large tax increases; taxes on banking and business transactions; and new taxes on wealth to fund its commitment to ending austerity. While these measures initially prove popular, particularly among CGL voters, they precipitate rapid capital flight which further destabilises the Kirkovian economy. To add to the government’s woes, workers in the oil, gas and petro-chemicals industry react angrily to the announcement that the CGL intends to wind down all production in the sector completely within five years.
There are strikes, pickets and demonstrations, many of which turn violent. Kirkovia grinds to a complete standstill, and there are food and fuel shortages. The government eventually feels compelled to use the police to attempt to restore order, which only results in it breaking down completely. Support for the new government collapses quickly, and it is forced to call fresh elections, the likely results of which are hard to predict.
[[Start Again]]#Government Agrees Both
The government reaches agreement with both the IMF and International Petroleum: Despite their commitment to the People’s Assembly’s demands, CGL ministers feel forced to negotiate to secure the release of IMF credit and the much needed cash injection from a deal with International Petroleum.
Outcome: With the public purse in such a dire state, the new CGL government feels compelled to negotiate and reach agreement with both the IMF and International Petroleum. Parallel negotiations arrive a set of arrangements that look remarkably similar to those previously offered to the People’s Assembly by the government’s predecessor – some mitigation of the worst effects of austerity for the poorest and most vulnerable, within budgetary constraints; some ring-fenced health spending; and a new tax to support the development of renewables. IMF credit is released, and a contract signed with International Petroleum.
The People’s Assembly convenes an emergency public meeting, in which the CGL government’s treachery is roundly denounced. Many of those present re-iterate their view that nothing good for the movement will ever come of parliamentary politics, and this climbdown was inevitable. The People’s Assembly votes to withdraw its support from the CGL.
In response, the CGL goes to the country in a fresh election, seeking public support for its new programme with the slogan ‘there is no alternative’. Without the backing of the People’s Assembly, it fails to win the election outright, but goes on to form a coalition with the SDP. Both oil and gas extraction and a measure of austerity are in Kirkovia to stay.
[[Start Again]]#Government Rejects Petroleum
The government reaches agreement with the IMF, but not with International Petroleum: CGL ministers decide that environmental commitments ultimately outweigh the imperative of ending austerity.
Outcome: The government refuses to sign any new contract with International Petroleum, but it does agree to the IMF’s (slightly renegotiated) terms. IMF credit is released, and the government institutes limited new protections for the very poorest and most vulnerable, within tight budgetary constraints and under strict conditions.
Workers in Kirkovia’s oil, gas and petro-chemicals sector react furiously and walk out on strike. To make matters worse, the decision has caused a rift in the CGL between its former RL and former GP wings. Members of the former believe strongly that the government should have prioritised a complete end to austerity. A series of crisis meetings fail to mend the rift, and the party splits, with almost half the members – including Joint Prime Minister Klinton Karlton – leaving to form the Workers’ Party (WP). This split is mirrored by similar splits in the People’s Assembly. The government collapses and an election is held, which is won by the SDP.
Backed by trade unions representing workers in the petro-chemicals sector, the new SDP government hastily re-opens negotiations with International Petroleum. It seems that both oil and gas extraction and some measure of austerity are in Kirkovia to stay, for the time being.
[[Start Again]]#Government Rejects IMF
The government reaches agreement with International Petroleum, but not with the IMF: CGL ministers decide the commitment to ending austerity ultimately outweighs the imperative of ensuring an immediate cessation of new oil and gas extraction.
Outcome: The government refuses to agree to the IMF’s terms, arguing that any concessions on offer do not go far enough in ending austerity. It does, however, sign a new contract with International Petroleum. Coupled with new taxes on wealth and banking, a new injection of cash into the public purse – including through the renewables levy that the government has agreed with International Petroleum – plugs some of the financial black hole left by the reversal of austerity policies. However, public finances in Kirkovia remain in dire straits, with key credit agencies rapidly downgrading Kirkovia’s ratings and capital beginning to leave the country.
To make matters worse, the decision has caused a rift in the CGL between its former RL and former GP wings. Members of the latter believe strongly that the government should have prioritised a complete cessation of oil and gas extraction. A series of crisis meeting fail to heal the rift, and the party splits, with almost half its members – including Joint Prime Minister, Karey Karpington – leaving to form the New Green Party (NGP). This split is mirrored by similar splits in the People’s Assembly. The government collapses and a fresh election is held, which is won by the SDP.
Seeking to restore a measure of economic stability, the new SDP government re-opens negotiations with the IMF, hastily agreeing new terms to secure the release of credit. it seems that both oil and gas extraction and some measure of austerity are in Kirkovia to stay, for the time being.
[[Start Again]]