The Dubious Blessing of EU Membership
APRIL 19, 2003 by KARL SIGFRID
Filed Under : Regulation, Subsidies
At their recent top meeting in Copenhagen, the leaders of the European Union (EU) finally decided to accept ten new members by 2004. The countries to join the EU will be Estonia, Latvia, Lithuania, Poland, the Czech Republic, Slovakia, Hungary, Slovenia, Malta, and Cyprus. Most were under the Soviet Union’s control during the cold war, and their entrance into the EU has been called historic. Europe is once again united after decades of forced separation between East and West. However, one might question whether EU membership is an appropriate symbol for the freedom that the ex-communist countries won when the Soviet empire collapsed. One might also ask whether a spider web of regulations from Brussels will bring the new members closer to Western Europe culturally and economically. To get a hint, we can look at what the EU has done to its current members.
Eight years ago I became a part of the European Union along with eight million other Swedish citizens. A slim majority of the people in Sweden had decided that we should be a part of Europe and put an end to living isolated with Norwegians and polar bears as our only allies. There were plenty of valid arguments for entering the EU. Most important were “The Four Freedoms” that allow all EU citizens to move their goods, their services, their money, and themselves across European borders without bureaucrats’ asking questions. There was also the peace argument. The EU was once founded to prevent a new world war, and even if the recently reunited Germans seemed happy, we didn’t want to take any chances.
As members of the EU we got what we expected. We can move freely within the union, and Germany has yet not attacked. Unfortunately, along with the freedom to cross borders we got a new layer of government doing its best to increase its powers at the expense of national governments, local communities, families, and individuals. As if the national parliaments didn’t come up with enough suggestions on how to protect me from myself, I now have a European parliament consisting of 626 people trying to help me out. Since I became a part of the EU the parliament has voted to make me stop buying vitamin supplements, stop watching tobacco ads, and stop eating licorice pipes. Licorice pipes and chocolate cigarettes will make me start smoking, the parliament fears. While at it, the parliament also decided that the EU should register women with silicone breasts. How fighting “Baywatch” body ideals fits with the purpose of the institution remains to be explained.
As far as regulation-happy politicians are concerned, the EU is no different from any national government. What makes it a greater problem is that sensible politicians who normally oppose a growing government quietly accept the threat against individual freedom when it comes from Brussels. Many potential opponents of the growing powers of Brussels are stuck with a perception of the EU as a project for openness and free trade even though it has long since turned into something else. While there is no doubt that Europe, a continent consisting of many small countries, needs free trade and open borders, European nonsocialists must come to understand that the organization itself is ideologically neutral and that political institutions can be abused even when created for good purposes. The early ambition to prevent war and to open markets has now been replaced with the ambition to create a giant European welfare state.
The bigger and more numerous the EU institutions grow, the more difficult it will be to use peace as an argument for further expansion. Movement and trade across borders will likely contribute to greater tolerance for cultural differences, but what about the steps that the EU takes toward common standards and regulations? Will continentwide regulations for how often to take a break at work bring us closer? A common tax level? A European currency? EU standards that regulate the shape of cucumbers and the size of strawberries? What about a central policy for agricultural subsidies?
Agricultural subsidies make up 45 percent of the EU’s total budget. Every year, the system gives EU farmers more than $30 billion. Poland has made clear that it wants full benefits for its farmers as soon as it enters the union. This raises questions about what the primary purpose of the Polish membership is. Prosperity through free trade or easy money through the EU’s welfare systems? If a share of the EU budget is the reason for new countries to join, they will pay a high price for the short-term benefits. In addition to the bureaucracy tied to the agriculture subsidies, detailed labor regulations make the job market less flexible and increase unemployment. New standards for consumer goods will force industries to go through costly changes in their production processes.
The political ambition to standardize Europe has resulted in an expensive regional redistribution system. The commitment to pump money into poor regions would ruin the union’s economy if the new ex-communist member states were to get subsidies on the same conditions as current members. This is why the new members will gradually grow into the system rather than being part of it from the start.
A system that is too badly designed to accommodate all EU members is a funny symbol for a united Europe. On the bright side, problems with regional redistribution now get the attention of the European leaders. Net contributors to the system, such as Germany, Sweden, and the Netherlands are likely to demand cheaper benefits as the number of beneficiaries grow. In the short run, less regional redistribution through the EU will strengthen national governments. In the long run, corporations and productive citizens will benefit from independent nations that compete on an open market.