Europe to Those who Love Big Government

Published on 2013/02/18
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The regulation mania in Europe knows no bounds. At the moment, the investment fund industry has to grapple with 30 new regulatory catalogues, as the BVI Federal Association for Investment and Asset Management revealed the other day. And any internationally active bank needs to heed more than 14,000 new regulatory provisions per year. This is no joke, but the sad reality. Even worse, there are no improvements to show for the trouble. The only new jobs created this way are those of yet more attorneys and civil servants, if anything.

Here are two news items published last week:

  1. The German unions are calling for an “anti-stress ordinance.” At the same time, the DGB Trade Union Federation is demanding “sanctions” against companies that fail to protect its employees against stress. Stressful employment is to become prohibited by law, if Annelie Buntenbach, Member of the Board of the DGB, has her way. Christian Democrat Ursula von der Leyen, the German Minister for Labour, said she is “open” to such absurd demands. Is it only a matter of time before someone comes up with the idea to ban bad weather or low spirits?
  2. In France, President François Hollande intends to pass a law that will either prevent or discourage the close-down of such corporate sites that the Socialists believe to be “profitable.” Companies wishing to divest themselves of plants or production sites are supposed to be forced to identify a buyer for them first. It’s not as if any company in that position would be saddened by the prospect of finding a buyer. Having gotten French companies in dire straits with his socialist economic policy first, Socialist Hollande now seeks to keep them from closing down through legal stricture. Even more uncompromising was Communist East Germany when it simply outlawed unemployment.

Left-wing parties in Germany are simultaneously demanding statutory minimum wages and statutory maximum wages (by imposing caps on executive salaries).

They also call for new legal restrictions in rent law: the cap on rent increases is to be tightened, and the rent level for new leases is to be subject to legal limits, too.

All this coincides with an almost weekly output of new laws and directives on German or European level in order to prevent the world’s climate from ultimate collapse and to coerce all and sundry to seek “sustainability.”

Throw in for good measure the “equal opportunity laws” that coerce companies to enforce a gender quota.

Underlying all this is the belief that civil servants in their government offices do a far better job than the forces of the market and the decisions of the common man and that the government should impose and guarantee “equality.” It is the same creed that motivated the Communist planned economies which, having come crashing down by the end of the 20th century, are experiencing a renaissance in new guise.

The odd thing, though, is that the most tightly regulated sectors of the economy, the financial system and the healthcare system, are the very ones with the poorest performance; and this applies to the whole world.

About the Author

Dr. Rainer Zitelmann is one of the leading experts for the strategic positioning and communications of companies.

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