Eurobloat #0017 • September 2011
September 2011: with the euro buckling, banks wobbling and bond markets in open revolt, the Commission gathered its finest minds and produced the one thing no crisis has ever lacked, a new tax and a longer speech.
Folly of the Month: A continent on fire, so let us invent a tax
On 28 September the Commission unveiled its proposal for a Europe-wide Financial Transaction Tax, a levy of 0.1 per cent on share and bond trades and 0.01 per cent on derivatives, promising a tidy 57 billion euros a year. The detail Brussels preferred not to dwell on was that roughly 10 billion of that would be scraped off the City of London, a market the EU does not run and a member state that never asked for the favour. The tax was also pencilled in as a future "own resource", which is the polite Brussels term for money that flows straight to the centre without troubling a national parliament. It is a beautiful plan, marred only by the fact that money tends to move to wherever the tax is not, which is why Britain spent the autumn declining the honour.
1. Barroso reads the room, decides the answer is more Europe
Also on 28 September, José Manuel Barroso delivered his State of the Union address in Strasbourg, called the moment the greatest crisis in the Union's history, and prescribed the usual cure: deeper integration, a common eurobond and, naturally, that new transaction tax. When the single currency was visibly proving that you cannot run one money with seventeen budgets, the lesson drawn was not less ambition but more of it.
2. The six-pack arrives to mark your homework
On 28 September the Parliament signed off the "six-pack", six laws handing the Commission new powers to police national budgets and fine eurozone members who ignore its warnings. The body that failed to spot the crisis coming was duly promoted to schoolmaster, red pen in hand, grading the very capitals that elected nobody in Brussels.
3. The ECB's chief economist quits in protest
On 9 September Jürgen Stark resigned from the European Central Bank's executive board, officially for "personal reasons", in truth because he could not stomach the bank quietly buying up Italian and Spanish debt. When the institution's own chief economist walks out rather than watch the mandate stretched, it is usually a sign the mandate has been stretched.
4. Borders, briefly, win
On 22 September the Netherlands and Finland blocked Romania and Bulgaria from joining the Schengen passport-free zone, citing unfinished work on crime and corruption. Two member states declined to wave through open borders before the homework was done, and for once a sensible caution prevailed over the reflex to expand first and worry later.
5. The Court declares your honey a regulated substance
On 6 September the Court of Justice ruled in the Bablok case that honey containing pollen from a genetically modified crop counts as a product "produced from GMOs" and may not be sold without prior authorisation. The practical effect is that a Bavarian beekeeper, who cannot instruct his bees on which fields to visit, may now face testing costs higher than the value of the honey. Brussels regulates the bee, the bee declines to read the directive.
6. Your travel records, posted to Canberra
By Council Decision of 22 September the EU agreed to sign over airline passenger name records, names, addresses, phone numbers and card details, to Australia's border service. The bloc that lectures the world about data protection turned out to have a generous side, provided the data belongs to you and the recipient is on the other side of the planet.
7. A new agency to watch the meter readers
On 14 September the Parliament approved REMIT, a regulation policing wholesale energy trading and handing the surveillance job to the EU's Agency for the Cooperation of Energy Regulators. Another acronym, another agency, another set of traders required to report their every move to Brussels, all so that an energy market the Commission helped fragment can be supervised from the centre it answers to.
8. Thirty kilometres an hour, by order of Strasbourg
On 27 September the Parliament adopted a road safety resolution calling for, among 103 measures, an EU-wide 30 kilometres per hour speed limit in residential areas and the wider fitting of alcolocks. Quite why the correct speed past a row of houses in Lisbon must be decided by a show of hands in Strasbourg remains, as ever, one of the great unexplained mysteries of subsidiarity.
9. A trade favour wrapped in foreign policy
On 27 September MEPs approved a deal granting the Palestinian territories duty-free access to EU agricultural markets, explicitly so they could export "directly, rather than via Israel". A tariff schedule is a tariff schedule until Brussels notices it can also be a diplomatic gesture, at which point the customs code starts doing the work of a foreign ministry nobody voted for.
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