European Union is getting more centralized as well as protectionist every day

Thoughts On "Market Day" from ANTIDOTE by Sauvik

We are fortunate that today we also have access to a speech by Vaclav Havel, president of the Czech Republic, at the European parliament. As a representative of a nation that suffered greatly under communist rule, Havel emphasizes the concerns his countrymen have over a European Union that is getting more centralized as well as protectionist every day. Havel says that the EU should have just two functions: one, removing barriers to trade; and two, public goods that cannot be provided for by member nations acting alone or jointly. He deplores the fact that the EU is headed in the opposite direction. He says:

“… the present economic system of the EU is a system of a suppressed market, a system of a permanently strengthening centrally controlled economy.”

He also deplores the protectionism that is rife in the EU. He finds it hilarious that the EU has imposed a 66% import duty on candles from China. It is as if Bastiat’s Candlemakers’ Petition has become reality. Do read the full speech here. This is the kind of politics we need in India. We too should put communism and socialism firmly behind us.

19.2.2009 - ENGLISH PAGES
Speech of the President of the Czech Republic Václav Klaus in the European Parliament [...] the methods and forms of European integration do, on the contrary, have quite a number of possible and legitimate variants, just as they proved to have in the last half century. There is no end of history. Claiming that the status quo, the present institutional form of the EU, is a forever uncriticizable dogma, is a mistake that has been – unfortunately – rapidly spreading, even though it is in direct contradiction not only with rational thinking, but also with the whole two-thousand-year history of European civilization. The same mistake applies to the a priori postulated, and therefore equally uncriticizable, assumption that there is only one possible and correct future of the European integration, which is the “ever-closer Union”, i.e. advancement towards deeper and deeper political integration of the member countries.Neither the present status quo, nor the assumption that the permanent deepening of the integration is a blessing, is – or should be – a dogma for any European democrat. The enforcement of these notions by those, who consider themselves – to use the phrase of the famous Czech writer Milan Kundera – “the owners of the keys” to European integration, is unacceptable.

Moreover, it is self evident, that one or another institutional arrangement of the European Union is not an objective in itself; but a tool for achieving the real objectives. These are nothing but human freedom and such economic system that would bring prosperity. That system is a market economy.

This would certainly be the wish of the citizens of all member countries. Yet, over the twenty years since the fall of communism, I have been repeatedly witnessing that the feelings and fears are stronger among those who spent a great part of the 20th century without freedom and struggled under a dysfunctional centrally planned and state-administered economy. It is no surprise that these people are more sensitive and responsive to any phenomena and tendencies leading in other directions than towards freedom and prosperity. The citizens of the Czech Republic are among those I’m talking about.

The present decision making system of the European Union is different from a classic parliamentary democracy, tested and proven by history. In a normal parliamentary system, part of the MPs support the government and part support the opposition. In the European parliament, this arrangement has been missing. Here, only one single alternative is being promoted and those who dare thinking about a different option are labelled as enemies of the European integration. Not so long ago, in our part of Europe we lived in a political system that permitted no alternatives and therefore also no parliamentary opposition. It was through this experience that we learned the bitter lesson that with no opposition, there is no freedom. That is why political alternatives must exist.

And not only that. The relationship between a citizen of one or another member state and a representative of the Union is not a standard relationship between a voter and a politician, representing him or her. There is also a great distance (not only in a geographical sense) between citizens and Union representatives, which is much greater than it is the case inside the member countries. This distance is often described as the democratic deficit, the loss of democratic accountability, the decision making of the unelected – but selected – ones, as bureaucratisation of decision making etc. The proposals to change the current state of affairs – included in the rejected European Constitution or in the not much different Lisbon Treaty – would make this defect even worse.

Since there is no European demos – and no European nation – this defect cannot be solved by strengthening the role of the European parliament either. This would, on the contrary, make the problem worse and lead to an even greater alienation between the citizens of the European countries and Union institutions. The solution will be neither to add fuel to the “melting pot” of the present type of European integration, nor to suppress the role of member states in the name of a new multicultural and multinational European civil society. These are attempts that have failed every time in the past, because they did not reflect the spontaneous historical development.

I fear that the attempts to speed up and deepen integration and to move decisions about the lives of the citizens of the member countries up to the European level can have effects that will endanger all the positive things achieved in Europe in the last half a century. Let us not underestimate the fears of the citizens of many member countries, who are afraid, that their problems are again decided elsewhere and without them, and that their ability to influence these decisions is very limited. So far, the European Union has been successful, partly thanks to the fact that the vote of each member country had the same weight and thus could not be ignored. Let us not allow a situation where the citizens of member countries would live their lives with a resigned feeling that the EU project is not their own; that it is developing differently than they would wish, that they are only forced to accept it. We would very easily and very soon slip back to the times that we hoped belonged to history.

This is closely connected with the question of prosperity. We must say openly that the present economic system of the EU is a system of a suppressed market, a system of a permanently strengthening centrally controlled economy. Although history has more than clearly proven that this is a dead end, we find ourselves walking the same path once again. This results in a constant rise in both the extent of government masterminding and constraining of spontaneity of the market processes. In recent months, this trend has been further reinforced by incorrect interpretation of the causes of the present economic and financial crisis, as if it was caused by free market, while in reality it is just the contrary – caused by political manipulation of the market. It is again necessary to point out to the historical experience of our part of Europe and to the lessons we learned from it.

Many of you certainly know the name of the French economist Frederic Bastiat and his famous Petition of the Candlemakers, which has become a well-known and canonical reading, illustrating the absurdity of political interventions in the economy. On 14 November 2008 the European Commission approved a real, not a fictitious Bastiat’s Petition of the Candlemakers, and imposed a 66% tariff on candles imported from China. I would have never believed that a 160-year-old essay could become a reality, but it has happened. An inevitable effect of the extensive implementation of such measures in Europe is economic slowdown, if not a complete halt of economic growth. The only solution is liberalisation and deregulation of the European economy.

I say all of this because I do feel a strong responsibility for the democratic and prosperous future of Europe. I have been trying to remind you of the elementary principles upon which European civilisation has been based for centuries or even millennia; principles, the validity of which is not affected by time, principles that are universal and should be therefore followed even in the present European Union. I am convinced that the citizens of individual member countries do want freedom, democracy and economic prosperity.

At this moment in time, the most important task is to make sure that free discussion about these problems is not silenced as an attack on the very idea of European integration. We have always believed that being allowed to discuss such serious issues, being heard, defending everyone’s right to present a different than “the only correct opinion” – no matter how much we may disagree with it – is at the very core of the democracy we were denied for over four decades. We, who went through the involuntary experience that taught us that a free exchange of opinions and ideas is the basic condition for a healthy democracy, do hope, that this condition will be met and respected also in the future. This is the opportunity and the only method for making the European Union more free, more democratic and more prosperous. Václav Klaus, European Parliament, Brussels, 19 February 2009 [12:35 PM]