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 A liberal reform agenda for Europe


Published with the kind permission of the author

If we really want to answer the question how much Europe we can afford we have to examine what kind of Europe we have built.

Today European Union is more bureaucratic and works more as central planned economy than a unified free market economy that exchanges goods and services on the basis of comparative advantage under the free will of producers and customers.

Today European Union is more regulated than ever. Actually European Union has been a regulatory high authority that shares privileges and rents to the most unproductive forces of the European Union. Punishing the innovators and entrepreneurs with taxes, regulations and controls and rewarding the interest groups, the lobbies, pressure groups, clubs and unions with subsidies and transfer payments of all kinds.

Especially today in a macro-economic environment where the public debt crisis is dominant, the only tried and tested way to emerge from it is a great Paneuropean reform following the approach based on policies of promoting market solutions. In other words, limiting the size of the European bureaucracy, its regulatory power and the extent of its intervention in the vital business world of European producers and consumers.

Faced with the impasse of interventionist policies in Europe, the greatest and most welcome European policy is the application of a comprehensive economic proposal which brings to the fore the most dynamic mix of a well-organized liberalization economic policy upheld by the twin pillars of deregulation and very low taxation. A market solution policy agenda is in itself a necessary and sufficient condition which, in conjunction with the timeless cultural traditions of liberty and democracy,principles and values of the people of Europe has the potential to make the greatest contribution to effective handling of the crisis and the construction of a new Europe, a private-oriented free economic area and a dynamic community that will turn away from lowest-common-denominator leveling and acknowledge the distinction, the leadership, of the intelligent and able, who provide the only competent and effective guide for promotion of both the liberty and the wealth.

The political economy of market approach is the most effective policy against the sterile, ill-fated and - in a word - unsuccessful politics of the Eurocrats who dictate from Brussels our enterprises and our lives. The political economy of liberalization is the most apt riposte to Eurocratic interventionism in its death throes which, following the demise of its lamentable cousin real socialism, seeks through introduction of its disastrous economic architecture to sound the death knell of the European economy.

Essentially, in today’s painful European economic reality, what are in conflict are two diametrically opposed economic strategies. On the one hand Eurocratic planning procrastination and reluctance to make drastically urgent breaks and on the other the market oriented liberal economic dynamic which wants to, and is obliged to, impose it immediately. The truth is that European socialists of all colors have traditionally relied on state intervention in the economy. Their policy and their economic philosophy have always been to accord the priority of collectivism over the individual. Collective structures and centralized institutions have had preference over individual initiative, free entrepreneurial action and individual rights.

In contrast, therefore, to what is being implemented through the dead-end socialist economic strategy, based on over-taxation and the gouging of incomes, that has been in force over the last decades, what Europe needs immediately if it is to recover from the grave economic crisis into which we have been plunged is implementation of a full-blooded market oriented liberal economic program based on immediate and drastic reduction of European bureaucracy and regulatory power, on abolition of ineffective Eurocratic instrumentalities, on an extensive program of reforming the irrational social welfare programs, on flexibility and freeing of the labor market, on disengagement of business operations from unions pressure, from overcontrol and overregulation from contradictory agencies and authorities and on reductions in taxation. Only coherent, consistent and well organized application of these marketoriented liberal policies can lead us to a Paneuropean economic upturn with corresponding increase of growth rate and finally the total level of the wealth.

The new market oriented economic proposal moves precisely, and most satisfactorily, in this direction. It exemplifies Supply Side Economics and its application on the European economies with the establishment of the flat tax according with the reduce of direct and indirect taxation. I reassert that the Flat Tax is both a symbolic and a fundamental demonstration of how a new market oriented economic policy can reform radically the European economies and reemerge them from the crisis.

The reason that the Flat Tax is so effective is that it possesses the quality of increasing production and productivity alike, of both labor and capital. It is the tax which, single-handed, represents the total taxation revolution that Europe so urgently needs. With reforms and schisms of this kind European economies can change their inefficient institutional structure, overcome the crisis and again place Europe on an upward trajectory of progress.

With an economic policy of this kind that is comprehensive, sober and well-organized, so as to provide a framework for development of free, open, and unhindered markets, entrepreneurial dynamism and private initiative, within a context of low taxation and minimal state coercion.

The fact is that today’s economic travails in Europe are the end product of perennial structural problems caused by the extensive regulation, bureaucracy and socialistic management both by Christian Democrats and by Social Democrats. But it is the time for liberal reforms with the decisiveness and the power of free markets and the rigor and precision of the economic rationality for changing Europe, making it a free continent!