( CNN ) -- Our democracies are facing a moment of truth . From the rise of extremism in the European Union to the political gridlock in the United States , leaders are struggling to respond effectively to new and complex global challenges . Citizens feel alienated with conventional politics and frustrated by the absence of effective policies that serve societies ' needs . That 's why I am convinced that the real issue we face is not simply defining economic solutions , but rethinking our democratic institutions . In any healthy democracy , there must be a balance between strong government and an empowered electorate that holds that government to account . But our democratic institutions have been captured by special interests . Policy is driven by powerful lobbies . Despite the rise of social media , media itself is increasingly concentrated in the hands of the few . Watch George Papandreou 's TED Talk . The speed and power of financial markets make democratic deliberation near impossible -- and government appears slow and weak in comparison . Banks have become too big to fail , which actually means too big to be accountable to the public good . We 've seen this before . As Franklin D. Roosevelt once said : `` We know now that government by organized money is just as dangerous as government by organized mob . '' The absence of a global governance system allows such interests to consolidate even more power , further constraining our capacity for democratic oversight . It 's not only the Occupy movement -- the 99 percenters -- who are taking a stand against this growing concentration of global wealth and power . Last year , inequality was cited as the No . 1 challenge by the World Economic Forum . Not exactly a radical leftist group . TED.com : Larry Lessig on rebuilding the republic . As we seek to rebuild our fragile economies after the financial crisis , economic measures must therefore be matched with democratic measures that rebalance this inequality and redistribute power to our citizens . A case in point is Greece , where a drastic austerity program was prescribed in exchange for emergency loans to avoid bankruptcy . Those who have paid the highest price -- low- and middle-income taxpayers , and young Greeks who now face almost 60 % unemployment -- are not to blame for the crisis . Austerity has created a sense of injustice and a lack of opportunity that has fed political extremism in Greece . Opposition parties chose to enflame popular opinion rather than work together toward a common reform agenda . Such political opportunism is toxic . In Greece , it prolonged the crisis , delayed reforms and cost our country dearly . That 's why I called for a referendum on the terms of Greece 's bailout loans : to give ownership of the process back to the Greek people . Although that referendum did n't happen , pushing the proposal did force wider political consensus in Greece . It led to a coalition government and has given the broader public a stake in their country 's future . TED.com : Rory Stewart on why democracy matters . My personal experience has taught me that hyper-partisan politics can not lead us out of financial woes . No single party can push through the deep structural reforms that will make our economies sustainable . Such efforts require consensus , compromise and a sense of responsibility to future generations . While polarization is a deeply problematic fact of democracy , it is also true that democracies have the capacity to guard themselves against the empowerment of extremist minorities . Indeed , what seem to be the dangers and weaknesses of our democracies can be dealt with only by more democracy : ensuring a public space for participation and informed deliberation . That 's why I have faith that democracies can find a way to reconcile differences and pull competing parties together for the public good . But first , we must ensure that our democracies are regenerated -- by fighting for institutions that are accountable , transparent and genuinely representative of all our citizens . TED.com : Dave Meslin on the antidote to apathy . The recent crisis gives reason to revisit the origins of democracy . In ancient Athens , democracy was an innovation to disrupt the concentration of power and maintain equality amongst citizens . We , too , need to use innovation to reclaim these principles of democracy . Online deliberation , citizen juries , crowd-sourcing for political solutions , and referenda are all useful tools inspired by the ancient Greek version of direct democracy . Politics must again become the art of imagining a better world -- and collectively finding the power to do so . The opinions expressed in this commentary are solely those of George Papandreou .
Former Greek President : From Euro - democracy to U.S. gridlock , this is a moment of truth for Greece . George Papandreou says special - interest groups have too much sway , create chaos . Papandreou : Politics , with citizen participation , must again become the art of imagining better society .