Blogging from the Highlands of Scotland
'From fanaticism to barbarism is only one step' - Diderot

Wednesday 30 March 2005

First the Stability Pact, now the Services Directive

Now I am not in any way 'eurosceptic', but even my somewhat idealistic belief in the positive effects of the EU is being tested by the latest example of fudge and downright short-sightedness in the way the EU is run, in practise. Of course I do not agree with everything the 'Torygraph' has to say about the EU, but this opinion article in yesterday's Daily Telegraph makes some pretty potent points.

It may be politically convenient for President Chirac to appease the socialist lobbies in France by opposing moves to liberalise intra-European services, in order to maintain salary levels in France that would come under pressure if competition from lower-cost EU economies for services was to become easier, but I doubt very much that such protectionism is in France's long-term best interests. The same kinds of arguments were put forward in the UK from the 1940s to the end of the 1970s in the UK by Labour and by many unions, but these efforts succeeded only in crippling the UK economy and leading to it becoming wildly uncompetitive in world markets. The remedial action taken under the early years of the Thatcher administration was indeed painful, and the fallout in terms of job-losses and rising unemployment produced scars in the social fabric of the UK which remain, to some extent and in some quarters, to this day. Nevertheless this drastic action did allow the UK to regain ground lost in previous years by forcing British indistry to improve its productivity.

Our government has a policy, of course, relating to the Services Directive and the changes to it which have just been agreed (almost at the point of a French gun) and the government naturally, I imagine, does not accept the Telegraph's analyis of what was agreed last week. However, a country which struggled for years before finally freeing itself from tyranny has the guts to say what it thinks about France's latest anti-competitive grandstanding, but whilst doing so seems to display a very pragmatic and reasonable attitude.

The other major recent fudge is the Euro Stability Pact. This has for several years past been applied unevenly (and this is a charitable and deliberately bland way of putting it). Basically if you are one of the EU's lesser economies, the European Council will not hesitate to start action against you, but if you are France or Germany this simply will not happen. It stinks.

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