28 August 2018
Prince Michael of Liechtenstein, GIS
Europe, especially Western Europe, has been a lucky part of the world since World War II. Wise statesmanship led it to reconciliation and economic integration.
In old Greek dramas, when humans have too much success the gods get jealous and blindfold them. One could be forgiven for thinking this has happened in Europe, considering its politics. There are a few examples that warrant mention.
The one most talked about is Brexit. Under the pretext of ever closer integration, the European Union proceeded toward centralization and excessive harmonization. Some EU members were not happy with such initiatives, especially the United Kingdom. Former Prime Minister Cameron frequently and publicly criticized Brussels. To win parliamentary elections in 2015, Mr. Cameron shortsightedly promised a vote on further EU membership in 2016, though he was convinced that the UK should stay a member. Mr. Cameron won, and the referendum was scheduled for June 2016. There was a widespread belief that the British electorate would decide to remain within the bloc.
Blackmailing the electorate
During the preparation for the vote, blunders were committed on all sides. After all his previous criticism of the EU, Prime Minister Cameron’s campaign for the UK continue as a member was unconvincing. The British people were not well-informed, while the main arguments for remaining in the EU were threats of punishment from the bloc. Brussels and many of the continental European governments trumpeted such threats. Former United States President Barack Obama joined the concert. He warned that if Brexit occurred, the U.S. would put negotiating a trade deal with the UK at the bottom of the stack of trade agreements it was working on. All these so-called “professional politicians” ignored that electorates do not respond well to such threats and consider them blackmail.
A ‘hard Brexit’ may become a reality due to this lack of a practical strategy
German Chancellor Angela Merkel’s “Willkommenskultur” (culture of welcome) to refugees – which had flimsy legal foundations and was not coordinated internally or with European partners – was also rather unhelpful.
To general shock around the world, the Brexit side won. Some 52 percent of British voters opted to leave the EU. Unfortunately, Brussels responded with a stubborn pronouncement that an “ever closer union” remained its goal. Both parties – but especially the EU – have, to everybody’s detriment, remained wedded to unrealistic principles instead of being pragmatic. A “hard Brexit” may become a reality due to this lack of a practical strategy.
One of the biggest threats is sovereign debt. This issue can only be solved by reducing public spending on consumption (this does not include necessary infrastructure investments). A main unresolved topic is the “implicit pension debt,” or IPD. By this, we understand pension obligations that governments, including regional and local authorities, have incurred toward current and future pensioners. These obligations are not included in the national accounts.
At least six European countries, including Germany, have an IPD of more than 300 percent of gross domestic product (GDP). Although this clearly means that pension payments can only be met by mortgaging the income of future generations, the German coalition government guaranteed that pension payments would remain stable until 2025.
German Finance Minister Olaf Scholz, a Social Democrat, is now requesting that the guarantee be extended to 2040 – or else his party will make it a central issue in the next campaign. As finance minister, he should be aware that such promises are an illusion, misleading pensioners and saddling future generations with further liabilities. He considers the move a hedge against “populist” parties, ignoring that the utopian promise he wants the government to make is itself extremely populist. “Stable pensions will prevent a German Trump,” is his claim. However, it is likely that any “German Trump” might not be so blind or damaging in the long term.
Instead of addressing the problem, (increasing the pension age, decreasing the number of people in public services and strengthening the private sector) elected officials believe that government guarantees can solve problems.
EU rules are extremely restrictive in the use of genetically modified organisms, or GMOs. Most other parts of the world are more open to them.
The European Court concluded that “Organisms (i.e. plants and animals) obtained by mutagenesis are GMOs and are, in principle, subject to the obligations laid down by the GMO Directive,” This ignores that much of mutagenesis, or gene editing, is effectively little different (though it is more precise) than that which occurs naturally or is induced by radiation – a standard plant-breeding method in use since the 1950s.
The EU court bowed to fear-mongering movements, to the detriment of European science
Mutagenesis is a driving force of evolution, happens in nature and adapts genetic information. This is used by genetic engineering and can result in hardier organisms. It is a breakthrough for improving food production, and alleviating malnutrition and hunger. However, the EU court bowed to pressure from fear-mongering movements to the detriment of European science and competitiveness.
We can observe similar shortsightedness and ignorance in other crucial areas, such as energy policy. Unfortunately, angst and ideological stubbornness have become strong drivers in Europe. This diminishes its global position.
Former German Chancellor Konrad Adenauer (1949-1963) was a statesman who brought Germany from a defeated and devastated rogue state, to a prosperous economy and democracy. He was a man of strong moral principles but was able to adapt. He said, “What do I care about my gossip from yesterday? Nothing prevents me from becoming wiser.”
With this attitude, he did not make populist promises to the electorate that are detrimental in the long term. Instead, he developed the economy, succeeded in getting hundreds of thousands of German prisoners of war back from Siberia, and the country once again became a highly respected member of the international community.