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Dan Lewis: As times get hard, let's cut the waste from Europe's questionable quangos
WHILE Europe's political class has focused on the errors of its banks and the painful overcapacity of its manufacturing industries, it is high time for them to look inward and do something about the spectacular inefficiency of the EU's very own quangos.
Today these 36 quangos cost nearly two billion euros per year, duplicate national initiatives, crowd out private sector investment, offer questionable value – and are almost exclusively located in the most expensive countries of Europe.
That Europe's economic decline is now accelerating, cannot be in doubt. With little to offer but populist protectionism and vast public spending programmes that garner headlines and achieve little else, the grand old continent is walking eyes wide shut into what the late Saddam Hussein might call the "mother of all post-war recessions".
Helped by a strong currency that fails to reflect the eurozone's dire circumstances, the IMF reckons that the euro area will contract by two per cent this year. All this while China's and India's idea of a downturn is chugging along at a highly robust 6.7 and 5.1 per cent respectively
Yet as in all crises, for the open-minded, a great opportunity exists for reform. That's why today the Economic Research Council and Global Vision have published this week The Essential Guide to EU Quangos 2009 to inject the idea of taxpayer value into the EU's institutions and shake up the cosy, overpaid Eurocracy, still living in the retro-mindset of 1970s social democracy.
Along with my fellow author, Glen Ruffle, our view is that as in Britain, the EU should aim to cut its outgoings and put its quangos in order – few of whom would be missed by EU taxpayers if they were to disappear tomorrow.
Take for example, the European Network and Information Security Agency based in Crete. Ostensibly, it exists to advise member states and the EU institutions on network security, to promote best practice and analyse data. These are all roles which could be outsourced to one or many computer security and data analysis companies. And it could be done so without the costs to the taxpayer of tax free salaries and eurocrat pensions.
Or consider the European Railway Agency based in France which spends 65 per cent of their 18 million euro budget on staff.
Here again, its role is not a negative one – to help usher in a unified rail system, technically and legally. Yet precious little progress since the ERA's inception has been made – European rail gauges vary widely where it matters most, in Spain for holidaying Europeans and Russia where the potential for long-distance freight all the way from Siberia is vast. So it's reasonable to ask; can EU taxpayers live without this body?
And then there's the European Defence Agency, which is practically a contradiction in terms. As some of us predicted, President Obama's request to European leaders to provide additional combat troops for Afghanistan, was met with an unaudacious "Nein nous can't!"
Serious defence planning for Britain is to no small extent about making sure America is on our side. That Britain joined the EDA – an organisation that exists largely to promote European arms manufacturers in preference to often cheaper, proven, superior and faster to be delivered American and British ones – is a scandal. When job-creation schemes in the European arms industry come at the cost of service lives in Afghanistan and Iraq, it makes me feel very ill.
The prime focus of our concern though is the failure to benefit from the vast disparity in costs that now exist across the EU. As is always the case, the private sector understood this from the word go. Since 2004, British industry has happily taken on cheaper labour from Central and Eastern Europe and the record of these people integrating, working and embracing the ethos of the UK's liberal democracy is second to none.
The EU should learn from this experience and drive down the costs of EU quangos by relocating them from the likes
of Brussels to Poland, Romania and even Bulgaria. It's not just because salaries and rents would be lower, it's because it frees up additional resources to spend on other things, pay off debts or even cut taxes.
And as the financial crisis escalates in Central and Eastern Europe, threatening to bring us all down with it, it is telling how the EU reacts; too little, too late and in denial about the fate of our poorer cousins, who, secretly, one suspects, it would rather prefer to be still under Soviet control.
Of course, none of these reforms will happen. Like most Britons, I'm a Europe-loving eurosceptic. So I don't advocate Britain leaving the EU. But I see a lot of upside in discreet disengagement mixed with positive confrontation and recapturing our historical destiny; an independent island that trades and embraces the world – as its people sees fit.
Dan Lewis is the research director of the Economic Research Council.
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Saturday 26 May 2012
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