Welcome to the mad house, Croatia

This week saw another EU summit and next week sees a new EU member. A big 'Welcome!' to our new European partner, coupled with a big 'Why'?

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Simon Miller
On 28 June 2013 17:35

Hello Croatia! Welcome to the mad house. I do hope you enjoy your stay, although why you chose to book in beggars belief.

Perhaps it’s the way our MEPs punch journalists who try to film them signing on for "work" and then sodding off, which has attracted you. Or perhaps it is the way the European Union hasn’t had its books signed off for 18 years that intrigues you enough to fully join the European Union.

Ah, or maybe it is the firm hand the EU has on the economic tiller, where once-proud nations such as Italy have to go begging for a couple of million euros just to try and get former electricians, amongst others, back on the job market. Could it even be the robust ways in which the EU treats democracy? If not, I can only conclude that it must be the economic mishmash of the Eurozone which has seen northern Europe, including those that are not in the wretched currency, pay for its mistakes.

Still, at least you had the EU's decision this week, which allowed you to take a closer look at those glorious regulations that are designed for yesterday but applied today.

The EU has agreed on a banking resolution directive, for example. Not a lot is a surprise, bail-ins and what-nots, but once again there are costs to be lumbered on top of the ever-increasing burden of being a European.

As readers of this website well know, new capital adequacy measures are to be put in place in the hope that banks can surf the next disaster to fall their way. But, far from being satisfied with just that, the council has agreed that national funds be set up to a target level of at least 0.8 percent of covered deposits which, of course, would be from annual contribution made by banks from their liabilities.

And all this from eurocrats that claim that they are working on getting the economies of Europe moving again.

In these days of mass communication, you don’t have to go far to see signs of double speak – “We will commit to the government’s spending plans”, “I was trying to regain my balance”, “I’m a man of the people…look I eat burgers”, you know that kind of thing. But the double speak I love the most is that around the economic sentiment indicator.

Such is the poverty of good news at the moment, any increase in the indicator is treated as good news. The recovery sentiment increased by 1.8 points in both the euro area and the EU recently, to 91.3 and 92.6 respectively.

Yeah, they look like pretty good figures don’t they? That is until you realise that 100 is the average long-term figure – in other words, the positivity lies above that line. Never mind that EU unemployment is around 11 percent pan-Europe, or that much of Greece and Spain have youth unemployment standing above 25 percent; hell, try 60 percent for the Greeks.

In fact never mind that the sclerotic, mind-numbing awfulness of the economic disaster has left economies teetering so much that it almost makes Argentine financial planning look good; at least sentiment is up.

And you know what’s really useful, Croatia? The continued focus on how to get Europe out of this mess.

I suppose you must be really happy that, with the car industry in mainland Europe seeing the worst level of sales on 20 years, EU leaders spent their time arguing about car emissions.

Indeed – sod economic reality; let’s have a row between Germany – who pays for most of you lot by the way – and other countries over a ‘supercredit’ that allows carmakers producing bigger models to offset their emissions by making electric cars and smaller vehicles.

Never mind that the car industry in Europe could do with something like lower taxes so people buy cars; what it really needs is yet more expense and paperwork to satisfy the god of 1960s command economy and the goddess of the green economy.

Hey, there’s always farming you know. Over forty years of mismanagement and corruption, all rolled up in a French accent to take away the bitter tang of competition and efficiency. But finally, yes finally, there is an agreement on reform.

Sort of.

This time, those economic genii, MEPs, were involved. Well, thank goodness for that. Now there is going to be a blacklist of entities which would be excluded from EU funding unless farming contributes a substantial share of their income.

This is all to ensure that direct payments will go only to active farmers, but once the horsetrading has finished, let’s see what will count as ‘active’ let alone ‘substantial’.

In addition, the great goddess of the green will be sated by 30 percent of the budget for direct farming being spent, only “if mandatory greening measures” are carried out.

Your farmers will be able to get money for crop diversification, maintaining permanent grassland, and creating ecologically-focused areas. So no room for things like the market or giving consumers what they want. And forget altogether about the growing concerns over food security. You get your money if you do what our tree-huggers tell you to do.

So there you have it, Croatia. Your €600bn or so club. Oh and don’t worry about your public debt of 62.5 percent of GDP with a 5.6 percent deficit; France is sitting on a 90.2 percent debt at the moment, so you’ll fit right in.

Hello, bienvenue, and živili!

Simon Miller is a contributing editor to The Commentator. Follow him on Twitter @simontm71

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