Thijs Jochems: The EU in a time crunch - practical democracy versus autocracy
This column was originally written in Dutch. This is an English translation.
Trump has the power and Europe is scared. Trump's populism is riding the wave of deep discontent among many American citizens. There's also a lot of discontent in the EU. EU countries need radically different solutions than the current ones to take the wind out of populism's sails.
By Thijs Jochems, Advisor and Private Investor
In the previous issue of Financial Investigator magazine, in my article entitled “Trump and the Teslamites, EU what now?”, I discussed what I believe to be the root cause of the rise of populism in Western democracies: the sharp increase in income and wealth inequality. Now it's time to look at the solutions. Here's a start.
Growing inequality in economic prosperity and stifling bureaucracy are major sources of discontent. In the Netherlands, the number of laws and regulations has almost doubled in the past 25 years. In the EU, the proliferation of rules and regulations has led to internal trade tariffs in the EU effectively amounting to 45%. This does not give the EU the large internal market and competitive position it needs.
The democracies in the EU do not have years to resolve the deep discontent among their citizens. In short, there is considerable time pressure.
In the US, Trump has understood that citizens have lost patience and has accelerated efforts to reduce bureaucracy and inequality. However, American citizens will not benefit from his measures, which are aimed more at his own interests and those of his inner circle.
The Netherlands and the EU must take radical action, but differently than in the US. How? Not by repeating previous attempts such as “for every new rule, we will abolish two”. That has not worked and will not work now either.
A few examples: the nitrogen dossier. Not building houses because ambitious civil servants passed on nitrogen as the criterion for Natura 2000 to Brussels 25 years ago? If you want to increase discontent, this is the way to go. It is a decision that must be made by politicians, not by judges who enforce the nitrogen law.
Education? Healthcare? Completely stifled by regulations. Employees in these sectors spend so much time on administrative obligations. The solution? Abolish all regulations for these sectors and design new, more principle-based regulations for this type of sector. Employees in healthcare and education will carry out their work responsibly during the two or three years it takes to set up new regulations.
An additional advantage is that labour will be “freed up” that can be used productively in other sectors. This also solves part of our demographic problem. The EU must be able to make decisions much more quickly. Simply by majority vote. This is not possible under existing legislation. Democratic decision-making then conflicts with the rule of law.
However, speed is now so important that democratic decision-making must take precedence over the rule of law. As long as decisions are taken by multiple parties, we still have some guarantee that no single small group, as in the US, will benefit from this, but that the general interest will actually come first.
Utopia? More like a choice. If solutions to the problems described above are not found quickly, the bomb of discontent among us could well explode. Better a “practical” democracy than ending up with populist leaders who then establish an autocracy. Putin, Erdogan and Orban were all democratically elected. And how democratic are those countries now?
