Skip to content

Another Post-COVID-19 Anti-Crisis Contingency Is Possible In Europe

Europa covid

[Leer en Español]

Uncertainties and tensions over the so-called “anti-COVID-19 contingency fund” continue to bubble up in Europe. On paper, last July, it was approved that, directly from the Eurocratic institutions, some 750 million euros would be provided to the different member states.

At that time, a draft budget was also approved for the upcoming years, the amount of which exceeds one billion euros. A good part of the European socialist leadership was very “excited” about what they came to consider as a new Marshall Plan, although of “non-American origin.”

In spring, there was some reticence about the amounts to be allocated. A group of Northern European countries, including the Netherlands (winners of the “frugal countries” label), considered that money could not be wasted without any kind of macroeconomic conditions (reforms or spending cuts).

In fact, the Dutch Minister of Finance, Wopke Hoekstra, went so far as to call for an investigation into the budgetary situation of countries such as Italy and Spain, whose debt levels are not among the least astronomical in the Eurozone. However, in spite of this, there has not been as much rigor on conditions as there was at the time (and not only in view of Greece’s entry into the area in question).

Now, in recent weeks, another tense situation has intensified that at this time would keep the squandering of that money blocked: a blockade by Poland and Hungary that seems to be decreasing at this time, which would denote the umpteenth (and equally not so direct) surrender by the Polish government of Law and Justice.

A “commitment” to the so-called “rule of law” would apply to both Visegrad group countries. This action is actually a pretext, in the face of problems that also occur in countries such as Spain and Germany, to impose policies that slow down migration control and facilitate the advancement of the agenda of gender ideologues.

However, the crux of the matter will not be in this case a discussion on the macroeconomic panorama of countries in the Mediterranean area, nor will it address in depth the ideological problem against the (broadly speaking) conservatism of Poland (more traditional and religious) and Hungary (more nationalistic).

There is another interesting point in these discussions that I would like to address. Specifically, I consider, although it sounds politically incorrect, that an umpteenth program of subsidies and cash injections is in no way a panacea for any European economy.

Eurocracy is a considerable obstacle to economic development

If one consults the Index of Economic Freedom compiled annually by The Heritage Foundation, it can be ascertained that, on average, the U.S. economy is about six points ahead of the European economy. Obviously, in the first case, it depends on where one is. Just compare the level of interventionism between Texas and California.

For the same reason, it can be said that in the overall ranking of an entity in question, among the top ten, only countries like Switzerland (not officially linked to the European Union), Ireland, United Kingdom, Denmark and Estonia (which since 2014 exceeds Extremadura, the least wealthy of all Spanish regions in terms of GDP).

Nor can it be denied that in some European countries reforms aimed at a small degree of greater economic freedom have been implemented (as examples, the suppression of estate and inheritance taxes and the non-establishment of a minimum wage by the State), guided by utilitarianism in many cases.

In any case, it should be noted that, according to the Intelligent Regulation Forum, Brussels approves more than 2,000 directives and decisions a year, with the current Eurocratic regulatory and legislative body comprising more than 105,000 norms, agreements, sentences and standards, which do not only involve the strictly economic arena.

The Sovietization of the European Union is a fact, harsh as it may sound. Generally speaking, economic policy is based on harmonization of taxes and standards (common budgets are already being considered, for example), new tariff concepts and regulations that are contrary to, for example, the free movement of cars and the use of plastics.

Moreover, only Skype managed to become a European technology service with international relevance (it was developed in Estonia). No E.U. technology entity is in the world’s top ten. In fact, the only occurrence in search engines was to promote an alternative Google with French-German state collaboration that was a total failure.

Paradigm shift

The predominant state welfare systems are a failure, whether one wants to acknowledge this or not. It is somewhat different in the case of those who prefer to persevere in the error, and those that try to save them through small liberalization measures (for example, in Sweden, in order to make these benefits somewhat market-friendly).

In fact, beyond dichotomous North-South injustices, the contingency plan will be an umpteenth Keynesian failure, which will only ensure greater overall indebtedness. And yes, the low interest rate policies of the European Central Bank (ECB) only ensure hidden taxes (inflation).

Therefore, what we need is greater decentralization and competition. Make it easier for citizens and businesses to save and invest, without the continuing and problematic yoke of the state. Less taxes, less regulation, less debt, less spending, and less “fractional reserve” fraud.

Ángel Manuel García Carmona

Leave a Reply