New Big-Government Schemes

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There is nothing
really new to the notion that European politicians are seduced by
the ideas of state intervention and socialism, but it is interesting
to note how good they are at coming up with new big-government schemes.

A few days
ago, the European Union Commission presented the idea of a "globalization
fund". The plan is to set aside 500 million Euros annually
to "protect" companies, regions or industries that are
threatened by new competition from countries such as China. Finally
a plan to put a stop to whatever competition that has existed in

the signs that ordinary Europeans citizens are skeptical to increasing
the power of the European Union, the EU tax commissioner László
Kovács recently said during an interview with Financial
that he will come up with a proposal of introducing
a European tax in 2009. Amongst others, he is quoted of saying:

"I know
there are four or five countries that are resolutely against [a
harmonised corporate tax base]. There is no practical reason for
this, or at least I have never heard any concrete arguments for
their opposition. With all my due respect to tax sovereignty,
I believe that competitiveness is at least as important as tax
sovereignty, if not more."

To be balanced,
one has to admit that there has also been some good coming from
the union during the past few years. For example, investments have
been free to move across the borders and there has been a freedom
for European companies to merge and acquire. Alas, French politicians
seek to put a stop to the competitiveness of the European capital
market. With the policies of "economic patriotism," French
Prime Minister Dominique de Villepin has stopped foreign investments
in French companies, adding to the countries massive protectionist

A recent article
in EUbusiness
notes that countries such as France, Luxembourg, Poland and Spain
are leading a trend to put up barriers to takeovers in the European
Union, something that is described as a "return of state intervention
reflex in Europe."

the European Union is increasingly showing signs of big-government
tendencies, individual European states are setting up regulations
to hinder the competitive free market that the Union is supposed
to create. At a time where European politicians should strive towards
increased competition in a globalized world, they are finding comfort
in the politics that have been the hallmark of stagnation and bureaucracy:
high taxes, massive regulations and subsidies of failing sectors.

7, 2006

Sanandaji [send him mail]
is president of the Swedish think tank Captus and the editor of
Captus Journal. He is
a graduate student in biochemistry at the University of Cambridge.

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