The Economic Cost of the EU

To the casual observer Europe is doing well. The major cities are full of tourists who are spending liberally on pricey ‘cultural’ tours and devouring overpriced convenience food.

However, first impressions seldom reflect the full picture and the brutal reality is that Europe is in dire straits. Not only are the economic consequences of a severe recession settling in, so too is concern about the cultural changes that are enveloping many European nations.

The economic impact of the downturn is strongest in previous boom countries like Ireland. One pundit said that Irish pubs in smaller towns were closing at the rate of five per day due to the slowdown in consumer spending.

The recession is also evident in Dublin, where property prices and unemployment are moving in divergent directions.

A recent distressed property auction in the Irish capital saw high-end property lose up to 85 per cent of its boom time value. While property values fall, unemployment continues to rise.

As it does, so too does the internal tension and discomfort amongst the Irish people. It seems more and more Irish citizens are expressing their concerns about their perceived loss of self-determination as a result of their membership in the European Union (EU).

While EU spending created the pool of prosperity that saw Ireland become ‘the Celtic tiger’, spiralling asset prices fuelled by enormous debt was never going to be sustainable.

The Irish people are the first to admit they got carried away but they have also used the ballot box to voice their displeasure, throwing out a longstanding government and giving a huge majority to the new one.

They also elected a clutch of independents with agendas ranging from ‘I promise to turn up, but that’s all’ to ‘As an MP I promise to stop smoking marijuana’.

Fortunately, the government’s majority allows them to implement their agenda without relying on the support of the crossbenches.

But the government cannot do as it pleases because it is required to conform with a range of edicts handed down from Brussels. This saw the change from miles to kilometres on street signs and speed limits a few years ago. It has also seen the introduction of agricultural quotas in areas such as milk production.

Exceeding the national quota can result in substantial fines with individual farmers reduced to gambling on how their competitors are doing to determine their own production levels. It seems more guesswork than business planning.

The concept of production quotas would be alien to most Australians (except for those familiar with Labor Party pre-selection processes).

Broadly speaking, we prefer merit and markets to determine the most efficient use of resources. Such a process does result in economic peaks and troughs but generally of a less severe nature than the government-induced cycle of super booms and the consequent super busts.

The heavy hand of the EU has many Irish questioning the wisdom of subjecting themselves to the overwhelming authority emanating from Brussels in determining their national destiny.

Membership of the EU seems to impact everything from the labour market to monetary policy. Critics maintain that it also subsumes cultural sovereignty in favour of an ultra-politically correct Euro nation.

Coupled with the overwhelming debt situation that many European nations now find themselves in, there is little wonder that the voice of the ‘euro-sceptic’ movement is now being heard in many different languages.

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