The EU, a socialist mummy

Europe is not sick with Parkinson’s disease. It is a victim of Parkinson’s law. When a company or organisation has more than 500 employees or members, it no longer needs income, profits or clients. What matters is its own bureaucracy and internal procedures, which keep the employees busy. This is true for corporations and it is true also for the European Union, or European Mummy, as the pundits call it.

Pie in the sky

The EU increasingly needs itself. It’s been working less and less for economic growth and citizens and more and more for itself and its own officials. The procedures and regulations it passes are less and less needed and hinder business instead of facilitating it.

Globally, the EU is becoming less and less economically competitive. Member states have no money to finance officialdom and public spending so they endlessly indebt themselves either internally (Belgium, Germany, Netherlands, France) or externally (Ireland, Portugal, Spain, Italy, Greece).

The EU never reduces its own budget and also demands more funds for its army of eurocrats. The existing mechanisms of the EU’s functioning have degenerated, meaning that the union is no longer a promoter of economic growth. The proposed reforms in the shape of closer political integration and debt-sharing and a policy of stimulating growth at the cost of even greater deficit will only increase the army of officials and result in a thousand new regulations that will hinder business even more.

No one wants to remember recent history, when market liberalisation in Poland in 1989 resulted in an unprecedented economic boom. What Europe wants today is socialism, state monopoly over everything, artificial full employment, especially in administration and the public sector, and finally, the rationing of everything.

Vote by acclamation

In order not to sound hollow, let us cite some examples. One closest to me will best explain the phenomenon in question. One of the EU’s official bodies is the European Economic and Social Committee that was supposed to review the EU’s decisions on behalf of civil society. How does the rightful idea of civil oversight look in reality?

The Committee members are named by non-governmental organisations, employees and employers and appointed by the Council following nominations by member state governments. Most of the members are in fact members of organisations representing the above. So you can hardly find a real business-person in the employer group, a real worker in the employee group or a real social activist in the civil society group. Many members serve numerous terms, in some cases extending to several decades. The oldest of them is eighty nine.

A recent vote in the employer group took place by acclamation. When I asked whether a representative of the employer group was now or had ever been a businessman, I heard that not, but that he had a feel for the spirit of enterprise.

Similarly, a representative of the employee group said he had never been a worker. When I asked whether they could switch places, I heard it wouldn’t be so difficult.

Precisely such officials of employer, employee and non-governmental organisations represent us, the civil society. As officials, their salaries slightly exceed the EU average. What does the EU offer them? The session allowance is 233 euros. All you need to do is sign the list and you can disappear, which some have developed a habit of.

Once a week you get a 1,084 euros travel-cost reimbursement. Add a 30 euro daily lodging allowance, double allowances for out-of-Brussels sessions and many other perks (subsidised canteen, fitness club, medical service). In all, being highly active, you can save up to eight thousand euros a month free of tax.

For function members there’s even more. You only have to attend as many sessions as possible. What do you need to proceed more often? Hundreds of new regulations to review as well as your own opinions. The more law is established, the more you earn. Several years ago, when an initiative to simplify the law-making process came out of President Jose Manuel Barroso’s office, everyone applauded. Just not in my section, working group or sub-committee, they said.

Everyone’s happy

That’s the case all over the EU. Officials are employed and earn money introducing new regulations. An average of one hundred thousand regulations in ten years, which means ten thousand every year. It’s like “what else is there yet to spoil?”

There is a drive to regulate everything. The observance of new regulations is to be overseen, in both the EU and in member states, by new officials, in this case in charge of banking supervision, or, possibly, in charge of the supervision of everything.

If you spend a day or two in this atmosphere, you feel like living in real socialism again. No one is willing to remember how that system ended. There, too, bureaucrats wanted to decide how much meat, sugar or other rationed goods citizens should get.

In the EU, too, there will soon be ration coupons for everything, unless someone finally opposes the bureaucratic rule.

What the EU and its members states need is the kind of fundamental reforms that were unleashed in Poland in 1989 – a decisive liberalisation of business regulations and telling the citizens clearly that their future depends on their hard work rather than the good or bad will of an army of officials.

Until the EU and its citizens realise that there is no free lunch, the crisis won’t end and growth will be hard coming. For now, we are going to see a new army of well-paid officials to control banks and financial institutions, another army to oversee fiscal matters and so on.

The EU remains well on its way to becoming a European Mummy and a museum.

Opinion

End of summit blues

“There was a summit, there is a depression”. For Rzeczpospolita, the initial euphoria after the recent EU summit has now given way to fears over the condition of Spain and Italy. The conservative daily leaves no doubt as to why this is happening —

What is needed is more than bailouts, [growth] stimulus or banking unions ... Without tax reforms, labour market liberalisation and productivity improvements nothing will change ... Fiat’s five largest plants in Italy have an output more or less the same as its sole Polish plant in Tychy, which also employs four times less workforce. But this can’t be changed by negotiating during summits.

Pessimistically, Rzeczpospolita says no “radical reforms” in the EU should be expected. The gap between France and Germany and the indebted South is too wide and their interests contradictory —

Germany will never agree to debt sharing. This would push up their own borrowing costs ... Nor will Berlin agree to transforming the ECB into a money printer.