E.U.’s woes are rooted in its solutions @number10gov @Nigel_Farage

Again Fullermoney newsletter contains a piece worth re-printing.

E.U.’s woes are rooted in its solutions – This is an informative article by Paul Taylor of Reuters, also published by the NYT and IHT. I have used the IHT’s headline and here is the opening, posted without further comment:

  PARIS – Americans call it a Rube Goldberg machine, Britons a Heath Robinson contraption and the Danes a Storm P machine.

 The European Union’s policy making system often resembles one of those cartoon designs of an implausibly convoluted system for achieving a simple task – held together by adhesive bandage, string, frequent tinkering and plenty of wishful thinking.

 What is striking when you compare Europe’s policies on agriculture, monetary union and climate change is the way the Union keeps bolting on patches and extra wiring to try to fix problems created by its own solutions.

 Over the past five decades, the Union has set out to achieve a set of worthy goals by regulating markets – self-sufficiency in food, currency stability, resistance to climate change.

 Each of these policies created perverse incentives or what economists call “moral hazard” – unintended consequences like an oversupply of food, real estate bubbles and debt overhangs.

 When things go off the rails, the Union’s reflex is never to question or scrap the policy, since political dogma, vested interests and institutional inertia rule out going back on what in Eurospeak is called the “acquis,” or European achievements.

 The default response is always “more Europe,” without insisting upon the most straightforward solution, which is often blocked by the threat of political vetoes.

 “In political science, it’s called ‘path dependency,”‘ said Helen Wallace of the London School of Economics, an authority on European governance. “You are so locked in by what you have done before that you end up doing a version of it again and again.”

 While similar behavior exists in national governments and private businesses, the European Union is special – not just because of the number of veto holders who can block change, but also because supporters of the European integration project are reluctant to be critical when policies go wrong, she said.

 Furthermore, E.U. policies are enshrined in law and treaties, making them harder to amend, said an adviser to President José Manuel Barroso of the European Commission.

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