Wednesday, October 27, 2004

Not Getting It

Sounds like the reality check has finally cleared in Brussels:

Romano Prodi, the outgoing European Commission president, has described the EU's attempt to become the world's most competitive economy as a "big failure".

Any thoughts that this may lead to the EU considering the flaws in its basic model are swiftly dispatched:

Mr Prodi said the use of vetoes by EU states had undermined the reform agenda agreed at the Lisbon summit in 2000.

Yes, that's it! Not enough centralisation in Brussels. Of course, once you need clearance from the EU to open a packet of crisps, why, we'll be drowning in diamonds.

Mr Prodi told the Financial Times that EU member states had blocked progress in implementing the Lisbon agenda, which focused on cutting red tape and improving competitiveness.

Yes, they had a massive summit on cutting red tape. I think the basic flaw in this theory is becoming appparent. Here's hoping the EU rolls out a program to deal with drunkenness.

According to the FT, Mr Kok's report will call for the number of performance indicators set out in Lisbon to be reduced from more than a hundred to fourteen.

Is that a perfect testimony to the EU's Frankenstein approach to economics or what ? Eurocrats sitting in Brussels, carefully watching the output of olive oil, carefully fine-tuning subsidies and taxes to produce just the right amount.

Greater emphasis will be put on member states to draw up their own economic action plans.

Given that having British people run the British economy is marginally less stupid than having them try and run the Greek one, this is progress of a sort, yet it still misses the point: the economy isn't a machine, you can't pull a big handle and 'create jobs' or 'foster innovation' anymore than you can get a plant to grow 10x faster by dumping that much more fertilizer on it (even with the quality of fertilizer produced in Brussels).

But what really lies at the heart of the EU's failure is this:

In Lisbon, the EU set itself the target of overtaking the US economy by 2010.

There's nothing wrong with wanting to get filthy, stinking rich, but that isn't what they're aiming for. They're still obsessed with the zero sum paradigm. These people can't understand the idea that you can get rich by building a better mousetrap. To them, there's only so many slices of pizza available, and if those Yanks eat too much, why, it's no wonder that Europe is so often left eating the box.

Europe has a problem with innovation because the EU doesn't even recognise the concept of making money. To them, it's all about getting it from the other guy. It a sad, stupid, cannibalistic approach to economics - but it does have one advantage. If all we can do is keep swapping round the same old money then we surely need a referee to ensure that everyone gets their fair share. I'm sure the EU will help us out with that, right ?

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