Eurobloat #0173 • September 2024
September handed the sceptics their case on a plate. The Union's own grandee delivered a report all but admitting that its rules have left Europe trailing, even as its court forced billions on a member state that did not want the money, and one of its own commissioners stormed out denouncing the leadership.
Folly of the Month: when your own elder statesman says the rules are the problem
On 9 September Mario Draghi, former head of the European Central Bank, handed von der Leyen his report on European competitiveness, a sweeping confession that the EU has fallen badly behind the United States and China. Years of the Brussels rulebook, the very thing sold as Europe's edge, turn out to be a leading cause of its decline. The diagnosis is one this newsletter could have written; the cure Draghi prescribes, naturally, is hundreds of billions more in central spending and joint debt, because in Brussels the answer to too much Europe is always more Europe.
1. €13 billion forced on an Ireland that refused it
On 10 September the EU's top court ordered Apple to pay Ireland some €13 billion in back taxes, in a case Ireland itself had fought for years because it did not want the money or the precedent. Overruling a member state's own tax sovereignty, against that state's wishes, is the project showing exactly who it thinks is in charge.
2. And €2.4 billion squeezed from Google the same day
Hours later the same court upheld a €2.4 billion fine on Google. Two enormous penalties on American firms in a single morning is the regulatory superpower doing the one thing it still does with confidence.
→ rte.ie
3. The cure is more of the disease
Draghi's headline remedy is roughly €800 billion a year in extra investment, much of it via common borrowing and central direction. The report rightly damns the over-regulation, then proposes to fix it with a great deal more centralised Brussels.
4. A commissioner quits, denouncing the leadership
On 16 September the powerful internal market commissioner, Thierry Breton, resigned in a scathing letter accusing von der Leyen of "questionable governance" and backroom manoeuvring. When your own top officials walk out attacking how the place is run, the place is not well run.
5. Ireland's reluctant windfall
The spectacle of a country going to court to avoid receiving €13 billion tells you everything about the EU's appetite to override national choices. Brussels knows better than Dublin what Dublin should tax, and now Dublin must take the cheque.
6. The competitiveness gap, in black and white
Draghi laid out in detail how Europe has slipped behind on productivity, energy costs and technology, much of it self-inflicted through its own rules and prices. The report is most useful as a mirror, if only Brussels would look into it.
7. Two record fines, one busy morning
Stacking the Apple and Google rulings into a single day, the EU reminded the world that its surest export is no longer products or standards but penalties on other people's companies. It is not a business model anyone should envy.
→ rte.ie
8. Governance by spat
Breton's exit, and the manoeuvring that prompted it, exposed a Commission run more by personal power plays than by any coherent plan. The new five-year term began, fittingly, with a resignation letter.
9. A report begging Europe to deregulate, written for the regulators
The deepest irony is that the case against the Brussels rulebook now comes from the heart of the establishment itself. The sceptics have been saying it for twenty years; it took a former central banker and a competitiveness crisis for Brussels to hear it, and it still has not acted.
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