Every Member of Parliament should read the following summary of “The Euro Is Not the Problem”, the Editorial in the September 29th issue of Investor-s Business Daily.
“Yesterday, in a national referendum, the Danes declined to join the European currency union. When a currency plunges in value by nearly 25 percent in 21 months, as the Euro has done, the blame doesn-t lie in faulty ink or paper. It-s to be found in wrong-headed government policies that many European nations have specialized in for years, critics charge.
“Such policies have convinced European investors to send their money to the U.S. Last year, what was a trickle early in the decade became a torrent. Nearly a quarter of a trillion dollars in European money sought a safe haven in American investments.
“The reasons are fairly obvious:
The European Union confiscates about 42 percent of the region-s total output in taxes to pay for its welfare state — and reduces the value of labor through 4-day work weeks, month-long vacations and generous jobless benefits.
So many Europeans try to escape taxes, underground economies in countries such as Italy, Spain, Portugal, Belgium and Greece equal 22 percent to 30 percent of their total economies.
In all of Europe, some 20 million people work off the books.
Europe-s mammoth tax bite on energy is hitting businesses and citizens hard — and the response has been growing numbers of protests and demonstrations.
“By contrast, taxes in the U.S. are nowhere near European levels, at about 30 percent of gross domestic product. There is still less regulation here and growth is much stronger.
“Small wonder, then, that European investors are fleeing the Euro in favor of dollars.”
This commentary is significant for Parliamentarians because it provides insights into major issues now before Parliament. It explains the private capital flight out of the OECD countries that has triggered the blacklisting of the offshore financial centers such as the Bahamas. It attributes that capital flight to specific “wrong-headed government policies”… a combination of extensive social benefits, high taxes and labour market regulation.
The latter is particularly important because Parliament now must deal with five labour bills that will transpose the European regulatory system to the Bahamas. Passage of these Bills will return the country clearly to the divisive politics of “income redistribution” and away from the policies of economic growth that has fostered the country-s recent prosperity.
Parliamentarians are urged to do the difficult… that is to consider what is in the economic interest of the country rather than their short-term political advantage.
