(EU) Institutions should also matter to economic liberals

International Herald Tribune logoToday’s press review at work included a challenging Opinion article from the International Herald Tribune (IHT) of January 4th 2007. It is written by Vladimir Dlouhy (former Czech political adviser) and Bill Emmott (former editor of the Economist) and called “The best idea: do nothing“. You can find the whole article on the IHT’s website. In sum, the two commentators ask the German presidency to do nothing on EU level and concentrate on domestic economic reforms.

Here is what I have submitted as a letter to the editor in reaction:

…in your opinion “The best idea: do nothing” (4 January 2007) Vladimir Dlouhy and Bill Emmott argue that the best for Europe would be to sort out reforms at domestic level and do nothing on EU level. Maybe they should have gone even further and ask for the eradition of poverty, abolishment of nuclear weapons and the end of trade borders instead of focusing on Doha and UN reform. Dlouhy and Emmott have a very idealistic approach to politics. Fortunately, institutions do matter in welfare creation and for the creation of competitive markets. – Is it not surprising that some of the most competitive European industries exist precisely in those areas where the single market has given them the freedom to develop beyond borders? Is it not precisely there, where a strong and independent Commission strikes down against “national interest” (read: veto) that the market has allowed European business to become globally successful with benefits both on consumer prices and sustainable, qualified employment? I do not dare to predict where our competitiveness will stand in three years, if the EU were to halt reform. Just look at the Mercantilist policies pursued in the energy or finance sector by German, French or Italian governments.
Abolishing unanimity on economic, tax and social policies will in the end make sure that all Europeans benefit through higher common welfare. I do not trust mine nor most EU governments to achieve this purely out of good will. But maybe I am not an idealist like you. I do think we need institutional reform – but maybe even beyond what Merkel and Barroso have in mind.

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