The outcome of the Dutch election was, as I predicted, an affirmation of the country’s commitment to austerity and continued EU bailouts. This will reinforce the politicians and Eurocrats who are pushing for a more centralized – and politically more unaccountable – Europe. It was becoming clear already yesterday that this was going to be the result, and therefore it comes as no surprise that Eurocrats who are eager to continue to build a European super-state are capitalizing on the Dutch election as quickly as they can. The chief of the EU Council (think of him as the president of the EU), Mr. van Rompuy, is no exception. Yesterday he put forward a paper that pushes for an even stronger centralized government in Europe. The EU Observer has the story:
EU Council chief Van Rompuy on Wednesday (12 September) tabled an ‘issues paper’ on how to further integrate the eurozone, including a common budget, limited debt mutualisation and a parliamentary assembly. … This is supposed to “get member states out of the closet on the most sensitive issues,” one EU official told this website. Drafted with the heads of the EU commission, European Central Bank and Eurogroup of finance ministers, the paper proposes “a central budget for the euro area” in order to “deal with asymmetric shocks and help prevent contagion.”
Never mind their illogical motives for a centralized budget. The real story here is that once the EU becomes a formal government with the right to tax and spend, it will do exactly that: tax and spend. And when it taxes and spends, it will claim full jurisdiction over the parameters that guide its spending. Since most of government spending in the EU – like in the United States – is for entitlements, the EU will automatically centralize jurisdiction over all the variables that determine entitlement spending. This means:
- a centralized unemployment system with centralized reimbursement rates and equally centralized workforce participaton requirements;
- a centralized health care system where Brussels dictates how many doctors a country, or a part of a country, should have, where the EU tells doctors what reimbursement rates they should be getting, and where the EU controls what medical procedures you can or cannot have;
- common euro-denominated treasury bonds issued on the good credit of Germany to fund bad credit for Greece; and, of course,
- a centralized tax system where the EU imposes its own taxes either in replacement of, or more likely on top of, those already levied by national governments.
None of this will solve the fundamental problem underlying the European economic crisis: the welfare state. All it will do is to elevate the crisis to the EU level and thereby force taxpayers in more wealthy countries to fund the welfare state in less wealthy EU states – but fund it on a permanent basis through taxes, and not through a bailout as is done today.
Back to the EU Observer story, which makes clear that this new, formalized EU government is not a pie-in-the-sky idea. On the contrary, the tracks have already been laid out for this new super-government:
An EU summit on 18-19 October is set to endorse the parts of the paper which are doable without changing the EU treaties, while the more long-term goals of political union needing a convention, new treaty and referendums will be left for the December summit. An attempt to deal with the German taboo of debt mutualisation and France’s no-go area of further sovereignty transfers to Brussels was made in June when Van Rompuy first tabled a plan for deeper eurozone integration. The only possible compromise at the time was to endorse common banking supervision in return for the German concession of granting troubled banks direct access to the eurozone bailout fund (ESM), a deal ultimately meant to help Spain lower its debt. But as the crisis continues and markets doubt the results of each EU summit, more steps are needed towards further eurozone integration.
In other words, the bank crisis – not caused, but seriously aggravated, by the welfare state crisis – is being used as an accelerator for the process toward a formal, full-fledged EU government.
Every time politicians want to expand government, and to it fast, we are well advised to put a foot down and ask ourselves: what is really going on here? I know of no one better suited at answering that question than Mr. Nigel Farage, MEP for the United Kingdom Independence Party:
A fiscal crisis is being used as a door opener for a European super-state – a super-state that won’t solve, but will deepen, the fiscal crisis; that won’t expand, but will contract democracy; and that will increase, not decrease, tensions between member states.