English Pages, 25. 1. 2011
The two words, „Challenging Prospects“, chosen for this year’s Com.Sult congress have been used as titles of congresses and conferences many times in the past, but this time their use seems to be appropriate, at least when we talk about Europe. We should say loudly what many Europeans, especially their politicians, also see but do not want to admit, that Europe faces a substantial, long-term, very serious problem. It is not a short-term, or medium term business cycle phenomenon. And it is not part of a global crisis, it is very European. Even the recent crisis was not global. It was euro-american.
It can be demonstrated by statistical data, but it is probably not necessary. Several weeks ago I met my old friend, a distinguished economist, high-ranking U.S. administration official. When he enthusiastically talked about China, I asked him about Europe. He answered that when he wants to speak about interesting and relevant world issues, he forgets Europe.
This statement does not prove anything. It is, however, an expression of a widespread perception, and we know that perception is usually right. What happened in Europe and with Europe? The post-war reconstruction was a success and even after that Europe was growing and was relevant. Why is Europe less successful and less relevant today? What went wrong?
I see five main reasons for it:
- it started with the victory of a seemingly friendly and comfortable but excessively paternalistic and not sufficiently productive European economic and social system, called “die soziale Markwirtschaft” (or social-democratism). As someone who spent almost fifty years living in an oppressive, visibly irrational and hopelessly inefficient communist system, I hope I can afford to say that I see more similarities between communism and the current EU than it is considered politically correct to admit;
- die soziale Markwirtschaft with its generous social benefits weakened motivation, shortened working hours and life employment, prolonged years of studying, diminished the supply of labour (both at macrolevel and structurally), created bottlenecks and shortages. It called for immigration which was subsequently justified by means of a very problematic doctrine of multiculturalism;
- the inefficiency of this arrangement was “reinforced” by the gradual acceptance of green ideology, of environmentalism. This process has reached its peak, and its economic devastating effect now, in the era of global warming (or climate change) alarmism;
- the states (or nation-states) became mistakenly called bastions of nationalism, originators and prime movers of wars, relics of the ugly past, something that has to be eliminated as soon as possible. The European political class, the proponents of an ever-closer Europe and of bureaucratic unification, has been consistently, systematically and successfully undermining Europe’s constituting elements, the states, for decades. It was forgotten that the “state” is the only institution where democracy is possible. All kinds of totalitarianisms and militarisms originated in structures bigger and differently organized than states – in empires and “Reichs”. The current decision-making irresponsibility, democratic deficit and lack of democratic accountability cannot be eliminated without returning to the original role of the nation states;
- European integration proceeds in one direction only. It has been evolving from EEC to EC, to EU, to EMU, now comes close to EFU, and the final stage, the EPU, is on the horizon. As a consequence of it, the initial, centuries lasting European advantages – its diversity, originality, resourcefulness and inventiveness – have been substantially impaired.
This combination of not entirely isolated developments makes a deadly cocktail we are drinking now. The contemporary European leaders do not take it seriously and are eager to fight the European malaise by drinking more of the same mélange. They want more of paternalism, more of environmentalism, more of immigration and multiculturalism, more of unification, harmonization, centralization, less of freedom, prosperity and democracy.
To discuss European Outlook 2011/2012 without the broader background has a very limited meaning. My expectations for the next two years are the following:
1. the European single currency, the Euro, will survive its current acute crisis but we will pay a very high price for it in long-term economic slowdown if not stagnation, in a heavy burden of inter-country fiscal transfers, in the further loss of sovereignty of the EU member states, in increasing centralization of decision-making in Brussels, in a growing democratic deficit;
2. eurodebt crisis à la Greece or Ireland will reach other eurozone countries. The costs of helping them will be increasing but these costs will be – reluctantly and unwillingly – paid by the tax-payers in the rest of the EU;
3. economic growth in Central and Eastern European countries, including the Czech Republic, will be faster than in Western Europe. The gap in the level of economic development between the European East and West will keep diminishing;
4. economic growth in the U.S. will continue to be weak. It will be taken as a disappointment and Obama’s administration will have more and more problems. It becomes clear that – because of structural deficiencies – Obama’s fiscal stimulus cannot rescue the U.S. economy. It stimulates employment more in China and India than in America;
5. global economic growth will continue to depend on new dynamic economies in Asia and Latin America. The BRIC countries will grow fast and their catching-up process will continue. The BRIC economies as a group are practically as important to the global economy as the United States economy already now and their role in the world economy will grow.
Václav Klaus, Wiener Kongress Com.Sult, „Challenging Prospects“, Vienna, 25th January 2011
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