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The European Commission is slowly strangulating Europe

european comission
Written by David Blake

Stifling innovation and slowly strangulating Europe, these bureaucrats do not give a damn.

The European Union is run by unelected power-hungry bureaucrats who have no interest in democracy but a great deal of interest in increasing and consolidating their power by issuing endless reams of red tape.  This is stifling innovation and slowly strangulating Europe. But these bureaucrats do not give a damn.

European Commission bureaucrats not only have complete contempt for democracy…

There is something about bureaucrats. They know they are smarter than the rest of us. They went to the top schools and universities where they networked with what would become the future ruling class. Our own most famous example, Sir Humphrey Appleby GCB, KBE, MVO, MA (Oxon), knew full well that the people ‘only get in the way’ of sensible decision making. 

So what could be more attractive to an elite bureaucrat than a job at the European Commission (EC)?  Not only does the EC provide the European Union’s civil service, it also initiates all legislation in the EU.

Now, there is supposed to be ‘double democracy’ in the EU – represented by the European Council (appointed by national governments) and the European Parliament (elected by citizens). But the reality is that the EC’s bureaucrats run rings around ministers from national governments as well as EU parliamentarians.

A good example of this was given in an interview with former UK government minister Kenneth Baker by Peter Hennessy on BBC Radio 4’s Reflections programme on 23 August 2016.  Lord Baker reported that it is common for EC civil servants to come up with proposals which were rejected by ministers from national governments only to come back with a virtually identical set of proposals a few months after these ministers have moved on to other responsibilities. In the EU, ministers and parliamentarians also ‘get in the way’ of sensible decision making. So what could be better than just ignoring them?

Well the answer is that it does not take long for things to turn quite sinister. A good example of this was the appointment of Martin Selmayr, former chief of staff to Jean-Claude Juncker, as secretary-general of the EC in February 2018, following an internally advertised vacancy for deputy secretary-general. There was only one other candidate for this post, Clara Martinez Alberola, Selmayr’s own deputy as chief of staff. She dropped out of the running and Selmayr was duly appointed deputy secretary-general. Within nine minutes of Selmayr’s appointment, the incumbent secretary-general, Alexander Italianer, resigned and Selmayr was promoted to secretary-general, while Clara Martinez Alberola was promoted to chief of staff, Selmayr’s old job. There was outrage in the European parliament, with French MEP Françoise Grossetête describing Selmayr’s appointment as a ‘mystification worthy of the Chinese Communist Party’. But at a parliamentary hearing in March 2018, Günter Oettinger, the commissioner for budget and human resources, insisted that the rules were followed in ‘the supranational spirit of the European public administration’ and Juncker said he would resign as president of the EC if Selmayr’s appointment was overturned.

This is little better than authoritarianism. But then Juncker, like Sir Humphrey, is no fan of democracy: ‘There can be no democratic choice against the European Treaties’ (quoted in Le Figaro, 1 February 2015). A particularly interesting demonstration of this statement is the way in which the EU Constitutional Treaty – designed to set up a United States of Europe with a president, a foreign minister, an army, and an anthem – failed to get ratified in 2005 – when the French and Dutch rejected it in referenda – only for it to re-emerge as the Lisbon Treaty which was then ratified by member state parliaments – without a referendum – in 2007.

This complete contempt for democracy has been there since the very beginning of the EU. Jean Monnet, one of its founding fathers and a man who was never elected to public office, said in a letter to a friend on 30 April 1952: ‘Europe’s nations should be guided towards the super-state without their people understanding what is happening. This can be accomplished by successive steps, each disguised as having an economic purpose, but which will eventually and irreversibly lead to federation’.

….their real aim is to increase and consolidate their own power

But contempt for democracy is not enough for the elite cadre of EC bureaucrats.  They also want to increase and consolidate their power.

The way to increase power is to issue more and more regulations that everyone else has to obey.  Bureaucrats love red tape – it comes naturally to them. At the EC, they do this on steroids. Since the EU started, the EC has introduced more than 80,000 different laws, with millions of pages of text.  Take one example, MiFID II which was designed to protect investors buying financial services.  It came into force in January 2018 and has more than 1.4 million paragraphs.  It is universally regarded as one of the worst pieces of financial services legislation every introduced. No problem – the EC is already planning an even longer MiFID III.

Then there are the 13,000 tariffs on imported goods set by the EC. Here are some examples: a 4.7 per cent tariff on umbrellas, 1.7 per cent on swords, cutlasses, bayonets and scabbards, 4.2 per cent on suborbital and spacecraft launch vehicles, and 15 per cent on unicycles. You are paying the salary and pension of a Brussels bureaucrat to set a 4.7 per cent tariff on imported umbrellas. Why 4.7 per cent, rather than 4.6 or 4.8 per cent? How do they justify this?

One of the key justifications that the EC uses for the regulations it introduces is the ‘precautionary principle’.  This is needed to ‘protect’ consumers.  You will hear a lot of people fully supporting the ‘precautionary principle’, since they do not want to see a ‘race to the bottom’ in terms of product standards.

While we all welcome safe and reliable products, the ‘precautionary principle’ is also being used to stifle innovation in the science and technology sectors. Here is one example from farming reported by Owen Paterson MP. The EC has long opposed genetic modification, but it is now putting the same regulatory hurdles on gene-editing. Scientists from the University of Minnesota and Calyxt have used a gene-editing method, TALEN, to produce a wheat resistant to powdery mildew and therefore in need of less fungicide spray. Genetic technologies have reduced pesticide use by 36.9 per cent on average around the world, while increasing yields by 21.6 per cent. Yet, these technologies are banned in the EU. Mr Paterson, a former Secretary of State for Environment, Food and Rural Affairs, says the ‘precautionary principle’ is condemning the EU to be the ‘museum of farming’.

While bureaucrats are both incapable of and hostile to innovation, they are certainly capable of increasing their power by passing more and more regulations whatever the consequences.  But increasing power is not enough if it cannot be consolidated. The two most effective ways of consolidating power are to take over control of your currency and your taxes.

….by taking control of your currency and your taxes

Twenty years ago, on 1 January 1999, the euro was introduced.  It is the common currency of the 19 members of the eurozone.  Jean-Claude Juncker celebrated the twentieth anniversary thus: ‘For 20 years, the euro has delivered prosperity and protection to our citizens. It has become a symbol of unity, sovereignty and stability’. But this is the view from Brussels which now owns the ‘sovereignty’ of the euro. 

The experience was rather different in the eurozone member states. The euro was introduced across a group of countries whose economies were so disparate that the operation of a single monetary policy with a single eurozone interest rate was inevitably going to lead to a pattern of booms and busts in the peripheral states when the interest rate is set to meet the needs of core economies, such as Germany.  In addition, the way in which exchange rates were fixed at the start of monetary union resulted in Germany joining at too low an exchange rate, while the peripheral countries joined at too high an exchange rate.

This inevitably led to the mainly northern members of the eurozone, especially Germany, building up large trade surpluses and the southern members, such as Italy and Spain, building up corresponding deficits.  This, in turn, has encouraged capital flight from Italy and Spain to Germany by savers fearful of the solvency of their banks. All these transactions take place via Target2, the eurozone payments system, and create liabilities for the deficit countries. At the end of 2018, Italy and Spain owed around €500bn and €400bn, respectively, which they can never pay back, and Germany was owed more than €900bn, which it will never recover.

Tyler Durden argues that ‘the euro project [has] been an economic disaster for all participants, including Germany, which will eventually be forced to write off the hard-earned savings she has lent to other eurozone members [viaTarget2]. We know, with absolute certainty, that the euro will self-destruct and the eurozone will disintegrate’.

Even the europhile London School of Economics admits that ‘The euro crisis, which first peaked in 2010 and continues to haunt the eurozone today, has been the most serious economic crisis in the history of the European Union. In fact, taken together, the global financial crisis and the eurozone crisis have by now caused more lasting economic damage in parts of Europe than the Great Depression of the 1930s. The economic crisis has also turned into a serious political crisis, as conflict among and within EU member states about how to resolve the crisis threatens both European integration and domestic stability’. 

But none of this matters to Juncker who positively welcomes crises as a way of grabbing more power.  He is, after all, only following in the footsteps of his hero Monnet who also said: ‘I have always believed that Europe would be built through crises, and that it would be the sum of their solutions. But the solutions had to be proposed and applied’.

Then there is tax. Another key aspect of ‘sovereignty’ is the power to collect taxes.  The EC wants to take away the national vetoes on tax policy. The putative reason is to close off tax avoidance schemes by major multinationals, which has had the consequence that ‘EU growth and competitiveness as well as fiscal fairness have been blocked as a result’.  But the real reason is more consolidation of power by Brussels over member states. 

The EC has even managed to factor tax into the Brexit negotiations.  As Professor David Collins points out, the Withdrawal Agreement hands over UK Tax Policy to the EC. For, example, the power to give tax breaks to start ups or key sectors of the economy would need to be approved by Brussels.

It is now far too late for member states to object

Now you would have thought that the member states would not simply take all this lying down.  Occasionally, you get a protest, usually from the Danes, who are almost as eurosceptic as the Brits.  You’ll periodically get newspaper headlines from the Danish prime minister like this: ‘“The EU has TOO MUCH power!” Danish PM warns of ANOTHER Brexit unless Brussels changes’: ‘The Danish Prime Minister… warned Brussels to learn lessons from the Brexit vote, …warned of the growing levels of eurosceptism in Denmark, …and [urged Brussels to give up its] grand ideas of the United States of Europe’. But this falls on deaf ears in Brussels. There is going to be a United States of Europe – it’s written into the Lisbon Treaty. The Danes are fortunate enough not to be in the eurozone, but the EC knows full well that once they control your currency and taxation, there is no way of escape.

The Brussels bureaucrats have not given up on Britain either.  As Leo McKinstry argues: ‘In their narrative, Brexit is portrayed as an inherently foolish project that was always certain to create a political mess. According to them, the only solution is to abandon withdrawal and submit once more to rule by Brussels’. But he then goes on to point out: ‘Such a move would not only subvert the outcome of the 2016 referendum, it would also shackle us to a failing institution that is dismally run, ideologically fixated, profoundly undemocratic and increasingly unpopular. The Brexit difficulties of the British Government pale beside the colossal, self-inflicted problems of the Brussels federal empire’.

The European Commission is slowly strangulating Europe – and it doesn’t give a damn

Italian Deputy Premier Matteo Salvini has said that: ‘People like Juncker have ruined Europe and our country… [and the euro] is ‘crime against humanity’. But Juncker doesn’t give a damn that he is slowly strangulating Europe. He knows he has Italy and the other eurozone members on their knees before him as supplicants. That’s what ‘ever closer union’ means to him – on your knees in front of him with a begging bowl, just like Oliver Twist.

The father of a friend of mine worked for Imperial Chemical Industries (ICI) at the time of Indian independence at the end of the 1940s when all those district commissioners returned home looking for jobs.  They became middle managers in companies such as ICI.  This was initially thought to be a smart move, but my friend’s father said: ‘you wait, they’ll strangle this place in red tape’. And so it proved.  The same will happen with the EU.

Why there are so many supporters of the EU in this country who want to be controlled from Brussels by people like Juncker and Selmayr is beyond me.

About the author

David Blake

Professor David Blake is at Cass Business School