Atlas Shrugged Europe?

The article appears in Un Monde Libre - blog post -, African Liberty and Hürriyet Daily News.
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With the financial crisis hitting the American real economy and government’s spending (and debt) reaching unprecedented levels, sales of “Atlas Shrugged”, the 1957 novel by Russian-born author Ayn Rand have surged (1). In welfare Europe, this hymn to individualism and laissez-faire capitalism has mostly been dismissed by the intellectual class as Anglo-Saxon “rant” or just “fantasy”. Looking at Greece’s fiscal turmoil, mounting sovereign debt, near-zero growth rates across the bloc and the risk of social unrest spreading, one has to wonder if the prophecy described in the novel has not come true.
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Cato scholar and economist Daniel J. Mitchell argues convincingly that Greece may well have turned into the real-world version of Atlas Shrugged. The burden of the public sector on the economy is such that “the job creators and wealth generators have given up and/or moved their money out of the country”(http://www.cato-at-liberty.org/2010/02/10/maybe-greece-should-go-bankrupt/).The public sector and interest groups like farmers have grown so powerful that reforms of the bloated civil service (1/4 of labour force) have never seriously been contemplated by successive governments. But it is time for reckoning for the Hellenic Republic has ironically turned into the sick man of Europe (debt of 125% of GDP). In the meantime Turkey’s economy while also experiencing hardtimes, is expected to grow by 3 to 5% this year. Furthermore its public finances have been brought under control and now meet theMaastricht criteria (2009, debt of 40% of GDP).
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The problem for the Union is that its waiting room is full of patients. Every new election brings renewed promises of reform of big government but rhetoric rarely translates into the kind of bold action necessary to address the problem. In France which also runs a record deficit (€1,500 billion) and whose debt is estimated at 80% of GDP (and rising), reformist agendas are hampered by unions prepared tofight to the bitter end to keep their privileges. President Sarkozy’s mediatized support to Premier Papandreou and his austerity plan was truly a case of the “sick aiding the sick”. Of course no-one wants to see the Balkan state - and other patients of the PIIGS club - descend into full-blown economic collapse but rewarding it for its failings with a bail-out could be equally damaging. The European leadership is naturally cautious and jittery. And so are the markets hardly reassured by the vagueness of political statements and the lack of details on a possible rescue package (2).
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To the relief of most politicians, the debate in the mainstream media has shifted from Greece’s blatant lies and evident responsibility in this mess to accusations of “immoral” speculation against the Euro. The market - capitalism - has once again become the “convenient”culprit. Commenting on the US, Stephen Moore opined that "The current economic strategy is right out of Atlas Shrugged. The more incompetent you are in business, the more handouts the politicians will bestow on you" (Wall Street Journal, Jan. 9, 2010). Well, the Franco-German directoire is mulling over the idea of experimenting along those lines with an “incompetent” member state. It is a dangerous precedent and raises issues of legality.
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It is widely acknowledged that public opinions are against the idea of bearing the burden of risks. The Brussels-based think tank Open Europe asked the "inconvenient" question (June 2009) and found that “70 percent of German voters were opposed to using taxpayer funds to bailout countries in financial difficulties such as Ireland or Greece.” (3) Its recent study - A Greek bail-out: is it legally possible and what will it cost taxpayers. Feb. 2010 - warns that “a bailout would involve massive political and economic risks. To try to convince taxpayers in one country of the need for them to pay for the mistakes of a government in another country – which they cannot vote out of office – is a massively difficult task. For most people it is simply unreasonable and fundamentally undemocratic to make taxpayers liable in this way.” In other words, the sounder option would be for Greece to sort its problems by itself, even if it means defaulting.
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Greece has been on the receiving end of a lot of solidarity (EU funds). In 2010, it apparently expects more as a “right”. For a majority of the Greek demos, the European budget is a - German - cow to be milked. But let’s be honest, they are not alone. Paraphrasing 19th Century French liberal economist Frédéric Bastiat, most people see the EU - like the state - as "a great fiction through which everyone is trying to live at the expense of everyone else". The comment made by a demonstrator in Athens sums it up. “We gave the world democracy” said the civil servant “and we expect the European Union to support us” (IHT February 11, 2010). The truth is that some taxpayers on the giving end of solidarity are starting to ask themselves a more relevant question. What has Greece done for them since 1981? For now the "tragedy" of lies and irresponsibility and its risks for the Union remain theoretical. But time is running out, and the Hellenes' legacy to Europe for the 21st Century could ultimately be one of less prosperity and a lot of bitterness.
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For the proponents of bigger EU government, the current crisis is an“opportunity” to push for more centralised powers and more regulations. In the new presidents-top-heavy institutional architecture, the most enthusiastic is Herman Van Rompuy who would like to see the European Council as the seat of economic governance. The “EU 2020 strategy” is starting to look like a blueprint for the establishment of a centrally-planned economy. Will the Commission be its Gosplan?
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Fed up with the mounting cost of the “ever-closer union”, many Eurocitizens may be tempted to “do a John Galt” like the hero of Atlas Shrugged. Rebelling against the imposition of more sacrifice in the name of European solidarity might be the only choice left to them.
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(1) The Guardian, March 10, 2009
(2) Daily Telegraph, Feb.12, 2010
(3) http://www.openeurope.org.uk/media-entre/pressrelease.aspx?pressreleaseid=117