Source: http://martinned.blogspot.co.uk/2012/03/
Timestamp: 2018-03-23 05:17:06
Document Index: 146479275

Matched Legal Cases: ['art. 55', 'art. 9', 'art. 15', 'art. 3', 'art. 34', 'art. 34', 'art. 3', 'art. 4', 'art. 47', 'art. 5', 'art. 7', 'art. 9', 'art. 16', 'art. 13', 'CJEU ', 'art. 87', 'art. 91', 'art. 230']

Well, ObamaRomneycare is basically a somewhat klutzy way of simulating single-payer. Instead of collecting enough revenue to pay for universal health insurance, it requires that those who can afford it buy the insurance directly, then provides aid — financed with taxes — to those who can’t. The end result is much the same as if the government collected taxes from those under the mandate and bought insurance for them.
Yes, the system is surely less efficient than single-payer, both because it’s more complex and because it introduces another layer of middlemen. That’s what happens when you have to make political compromises. But it is in no sense more interventionist, more tyrannical, than Medicare; it’s just a different way of achieving the same thing.
That was Krugman talking, but others have said essentially the same thing: If we can achieve the result we are now achieving without offending the Constitution, how can the Health Care Mandate possibly be unconstitutional? How can the constitutionality of the mandate depend on whether Congress "said the magic words"?
Posted by martinned at Thursday, March 29, 2012 0 comments
Poland apparently went a bit too far in encouraging generic medicines. Such products still need a marketing authorisation even if they are in all respects identical to products that are already on the market. Commission v. Poland
In SAG ELV Slovensko et al. v. Úrad pre verejné obstarávanie, the 4th Chamber clarified the obligation of awarding authorities to ask for clarification in case of abnormally low bids. Cf. art. 55 of Directive 2004/18. As it turns out, asking for clarification is not optional.
The Dutch again lost a case about Turkish workers, but this one is at least amusing: Does a Turkish worker lose his protections under Decision 1/80 if he acquires Dutch citizenship while keeping his Turkish passport? (As usual, Decision 1/80 is on p. 155 here.) The 1st chamber says no, so the spouses of the dual-citizenship workers get to stay. Staatssecretaris van Justitie v. Kahveci and Inan
In the ongoing litigation about the National Allocation Plans for Greenhouse Gases under art. 9 of Directive 2003/87, the 2nd Chamber rejected the appeals of the Commission in the case against Poland and Estonia. So the 2008-2012 NAPs of these countries get to stay in place.
After Ryanair last week, this week it is a health claims plaintiff who is trying to salvage an impossible case by pointing to art. 15 and 16 Charter (which, for some reason is not available through Amicuria), but again to no avail. To illustrate the degree of “hail Mary” involved: this argument came after the argument that a claim of a temporary health benefit is not a health claim in the sense of Regulation 1924/2006. For background, the claim we’re talking about is the claim that a certain wine is “bekömmlich”. Deutsches Weintor v. Land Rheinland-Pfalz
The 4th Chamber also held that you cannot apply the limitation period of art. 3 of Regulation 2988/95 to interest that is due only pursuant to national law, even if the underlying claim is based on EU law. (In this case agricultural subsidies.) Bundesanstalt für Landwirtschaft und Ernährung v. Pfeifer & Langen
It turns out that intermediary dealers in garbage and other waste do not have attorney-client privilege. They do not get to hide where the waste came from, even if there are business secrets involved. Interseroh Scrap and Metals Trading GmbH v. Sonderabfall-Management-Gesellschaft Rheinland-Pfalz mbH (SAM)
AG Trstenjak has an opinion on the work of a private law standards setting agency as a Measure Having Equivalent Effect under art. 34 TFEU. She attaches both a legal and a practical condition: art. 34 TFEU is applicable if the norms created by the agency are explicitly taken on board by the law maker and if, for that reason, deviating from them is hardly possible in practice. Fra.bo v. Deutsche Vereinigung des Gas- und Wasserfaches eV (DVGW)
Following his opinion in Éditions Odile Jacob v. Commission three weeks ago, AG Mazák now has an opinion in the other two appeals arising out of that case. This time, the Commission gets a partial win: the AG thinks the General Court was wrong to annul the Commission’s Decision approving of the purchase by Wendel of the parts of Vivendi that Lagardère was not allowed to keep. Commission and Lagardère v. Éditions Odile Jacob
Also fun: Mr. Donner is accused of aiding and abetting in various copyright violations for being involved in the sale of copyrighted furniture from Italy, where said furniture was not subject to copyright protection, to Germany where it was. AG Jääskinen argues that this does not violate Free Movement law or EU copyright law. Criminal proceedings against Titus Donner
AG Bot has an immigration case. On 31 May 2006, a Bangladeshi man married an Irish woman living in the UK. Subsequently, his brother, half-brother and nephew applied for residence permits on the grounds that they were dependents in the sense of art. 3(2) of Directive 2004/38. The British thought that that was a bit much, so they said no. And that is how these three Bangladeshis ended up in Luxembourg. The AG’s answers will most likely result in them being allowed to stay in the UK. Secretary of State for the Home Department v. Rahman and Others
The other big competition case this week, other than the abovementioned Post Danmark, is Telefonica v. Commission and Spain v. Commission. In these cases, the Commission’s decision that Telefonica had abused its dominant position by engaging in a margin squeeze was upheld, as was the € 151.875.000 fine. Following Deutsche Telekom and TeliaSonera, this is the third such case where telecoms regulation and competition law get in each other’s way over margin squeezes (cf. my book chapter on the topic), but this is the first time a Member State itself got in on the action. (Also, the last time it wasn’t quite so expensive. Deutsche Telekom only had to pay € 12,6 million.)
With regard to two state aid decisions in Re: Alitalia & the state of Italy, Ryanair lost on both counts. In the first case, its case was declared inadmissible on individual concern grounds, and in the second case it lost on the merits. Ryanair v. Commission
ON THE LOCATION OF THE SEATS OF THE INSTITUTIONS AND OF CERTAIN BODIES, OFFICES, AGENCIES AND DEPARTMENTS OF THE EUROPEAN UNION\
HAVING REGARD to Article 341 of the Treaty on the Functioning of the European Union and
(j) The European Police Office (Europol) shall have its seat in The Hague.
As anyone with basic reading ability can see, the French have a reasonable point in their suit against the Parliament's decision to cancel one of its annual trips to Strasbourg. (Here's the announcement of the case for the 2012 calendar, and here's the one for 2013.) Heck, France already won that case once before.
Posted by martinned at Monday, March 26, 2012 0 comments
In fact, many other EU Member States are already experimenting with the Danish system, although I must say that based on my limited experience of watching the Danish negotiate in COREPER, the Council of Ministers would completely break down if all countries worked that way. Then the whole EU would slow down to "tempo thirty-eleven".
Posted by martinned at Sunday, March 25, 2012 0 comments
As it happens, neither of these things is true. The Chinese, who appear to be the main target of this proposal, are likely to be supremely indifferent. In fact, in all likelihood they would resent being manhandled in this way, and as a result would be even more resisting to change. As for the profits to be made by European companies, the same old adage applies here as everywhere: the greater the degree of competition, the lower the profits of the sellers. Putting some numbers in, I'd estimate that the chance that such an External Public Procurement Regulation would have a noticeable effect on any major market at no more than 10%. I leave it as an exercise for the reader to decide how probable it is that the additional profits to EU companies in that case will exceed the certain losses for EU public authorities by a factor of 10.
For the European Commission's more scientific (and less objective) numbers, cf. p. 6-7 here. I could be crazy, but they seem to be talking about an EU domestic market worth € 420 billion per year as compared with potential additional revenue (!) for EU companies of € 12 billion per year. Even ignoring the uncertainty involved in trying to force other countries to open up their markets in this way, how will this bill not result in losses for EU public authorities exceeding € 12 billion per year??? All it takes to get there is an average price increase due to reduced competition of 2,9%. Are we really supposed to waste all that government money just so that Alstom can sell a couple more trains to China, maybe?
Posted by martinned at Saturday, March 24, 2012 0 comments
Posted by martinned at Thursday, March 22, 2012 0 comments
In Inter-Environnement Bruxelles et al. v. Région de Bruxelles-Capitale, the 4th Chamber decided that the environmental impact assessment directive, directive 2001/42, also applies to measures that are provided for in national legislation but that are not mandatory to adopt. Moreover, the directive applies both to the adoption of land use plans like the one at issue in the main proceedings and to their repeal.
The Romanian prosecutor tried to “grandfather” the Rasdaq market into the financial markets regulations despite the fact that it, itself, was not a regulated market, by relying on the fact that its operator had merged with the operator of a regulated securities exchange. The 2nd Chamber, however, says that that is a no go. Cf. art. 4(1)(14) of Directive 2004/39. It also held that it is possible to be a regulated market without being on the list of regulated markets that the MS have to prepare under art. 47 of that Directive. Prosecutor v. Rareş Doralin Nilaş et al.
AG Bot concluded that the eruption of the Eyjafjallajökull and the resulting closing of much of Europe’s air space constituted an extraordinary circumstance in the sense of art. 5(3) of Regulation 261/2004. While this means that Ryanair no longer has to pay the compensation of art. 7, they still have to take care of their passengers as required by art. 9. Just for fun, you should see which arguments Ryanair pulled out of its backside next (par. 48-71). But not even art. 16 and 17 of the Charter can save them. McDonagh v. Ryanair
AG Sharpston proposed that the Court should strike down a Spanish fee for the right to install facilities on municipal public property because it is in conflict with art. 13 of Directive 2002/20. The problem was that the fee wasn’t so much for the right to install facilities as the right to use them. Moreover, the fees were not linked to the extent to which a scarce public resource was used, but rather to the company’s revenue and market share. Vodafone España
Interesting, albeit admittedly not for everyone, is AG Mengozzi’s opinion in Geltl v. Daimler AG, a rare case about Directive 2003/6 and Directive 2003/124, the market abuse directives. The case concerns a lawsuit by investors in Daimler who argue that the company should have disclosed the fact that Mr. Jürgen Schrempp, the CEO, was thinking of stepping down, even though no formal decision had been made yet. The AG argues that the fact that the board was discussing what to do and how was sufficiently precise information that it should have been disclosed.
AG Mengozzi also has a case where the French prosecutor does not think the 2009 judgement in Wolzenburg is clear enough when it comes to the rule against extraditing your own citizens vs. the European Arrest Warrant vs. the ban on discrimination on the basis of nationality. In this case, the sought person is not French, but married to a French person. Lopes Da Silva Jorge
AG Mengozzi’s third opinion this week concerns the closure of a US military base in the UK. The case is about employers’ obligation to inform and consult the workers’ representatives about mass redundancies because the more interesting question of state immunity seems to have been forfeited at an earlier stage. Pity… United States of America v. Nolan
On renvoi, the General Court again annulled a Commission decision finding that certain tax exemptions for mineral oil in Ireland, France and Italy constituted unlawful state aid. On first attempt, the General Court found an infringement of the obligation to state reasons, which the CJEU overruled, and now they’re going with legal certainty because of the conflict between the Commission’s 2005 decision and the Council’s Decision 2001/224 which authorized these exemptions. Ireland v. Commission
In the area of asset freezes, the General Court has resumed it regularly scheduled programming, and annulled the sanctions against a company called Fulmen and its owner Fereydoun Mahmoudian because the Council failed to adduce any actual evidence that they had anything to do with helping Iran develop nuclear weapons. I’m not entirely sure, though, what is going on with the remedies (par. 107). Fulmen and Mahmoudian v. Council
I am intrigued by the cases of Marine Harvest Norway et al. v. Commission and Fiskeri og Havbruksnaeringens et al. v. Commission only because I was not even aware that it was possible to impose anti-dumping duties with in the EEA. But apparently such duties have been in place since 2006. Cf. the basic regulation, Regulation 384/96, as well as Regulation 85/2006, which imposed such duties on Norwegian farmed salmon. Both cases resulted in a partial win for the applicants, by the way.
In competition law, the General Court sided with the Commission against Slovak Telekom in an action for annulment of a Commission decision requiring Slovak Telekom to produce information. Slovak Telekom v. Commission
Finally, apparently the Pillar Wars continue. The Commission is suing because the Council and the Parliament enacted Directive 2011/82 on the cross-border exchange of information on road safety related traffic offences under art. 87(2) TFEU (JHA) instead of art. 91 TFEU (Common Transport Policy). Both work with the Ordinary Legislative Procedure, but the Commission seems to be worried about the principle of it, as well as about some countries’ opt-outs and opt-ins in the area of JHA. (cf. section 3.2.2 here) (HT: Ronny Patz.)
Yesterday's US Supreme Court ruling in Coleman v. Court of Appeals of Maryland gave me some serious non-employment discrimination-related food for thought. As such, the case is about whether Daniel Coleman can sue his former employer, the Court of Appeals of Maryland, for firing him while he because he was ill, which is ostensibly in violation of the Family and Medical Leave Act of 1993, specifically 29 USC 2612(a)(1)(D). The interesting thing is not the FMLA as such, but the reason why the Court held for the defendant:
A foundational premise of the federal system is that States, as sovereigns, are immune from suits for damages, save as they elect to waive that defense. See Kimel v. Florida Bd. of Regents, 528 U. S. 62, 72–73 (2000); Alden v. Maine, 527 U. S. 706 (1999).
From this premise, the result naturally follows, and I'm not sure why this was a 5-4. (Somehow it seems to involve a concise history of feminism. Don't ask.) The obvious exception to the rule is Congress' explicit power under section 5 of the 14th Amendment, but it is difficult to see how that helps sick people, as opposed to women, ethnic minorities, etc. Conclusion: this particular subsection of the FMLA is ultra vires to the extent that it applies to state government entities. Not very interesting.
Instead, the reason why this gave me food for thought is that it rests on a very peculiar approach to sovereign immunity. (The Wiki-page is not very good, but OK.) The state cannot be sued, unless it consents. Not even the Federal government can overcome this barrier, absent specific Constitutional provisions. (Justice Ginsburg, with only Justice Breyer concurring, brings up the case of Seminole Tribe of Florida v. Florida again, but not even Justices Kagan and Sotomayor are willing to follow her there. In that case they were in the minority too, and would have held that Congress can authorise suits against states under the Commerce Clause. The conservative majority, however, disagreed.)
This approach to sovereign immunity is peculiar because it is almost unique in the world. It has some roots in British common law, where the Crown was the fountain of all justice and the authority that created the courts, and could therefore not be sued, but even that was done away with by Act of Parliament in 1947. For that reason, sovereign immunity barely got a mention in the litigation over Frankovich and Factortame, where the European Court of Justice created a tort remedy for an infringement of EU law by a Member State.
In Frankovich, AG Mischo wrote:
[A] Member State cannot object to the bringing of an action for damages against the State in respect of the infringement of a right granted to individuals directly by Community law on the ground that its national legal system recognizes the principle of immunity of the public authorities, in particular the legislature; once the action for damages exists as a form of action, a Member State can no longer rely on the status of the person alleged to be liable in order to deprive individuals of the possibility of bringing such an action and thus impair the effectiveness of Community law with direct effect.
Indeed, the context we are dealing with here is completely different from that in which the theory of the immunity of the State in its capacity as a legislator was developed in certain Member States. The Commission correctly pointed out at the hearing that in national law there can hardly be a situation where not only is the legislature under the obligation to enact a law, not only is it possible to determine with a sufficient degree of precision what it must do, but in addition the legislature must act within a certain period. In my view it is not excessive to say that in relation to the transposition of directives the legislature is in a situation close to that of the administration responsible for the implementation of the law.
In the Waterkeyn judgment the Court was careful to state that pursuant to Article 171 of the Treaty,
"all the institutions of the Member States concerned must ... ensure within the fields covered by their respective powers that judgments of the Court are complied with" (paragraph 14).
That is merely the consequence of the fact that
"under Article 169 of the Treaty the Member States are liable no matter which organ of the State is responsible for the failure, and ... a Member State may not plead provisions, practices or circumstances existing in its internal legal system in order to justify a failure to comply with the obligations and time limits under Community directives" (18)
and under Community law in general. Furthermore, in Humblet the Court expressly stated that the obligation to rescind the national measure which is contrary to Community law and make reparation for the effects which it may have had results from the Treaty, which has the force of law in the Member States following its ratification and takes precedence over national law ([1960] ECR 569). A Member State cannot therefore take refuge behind the principle of the immunity of the legislature, even if that has the status of a constitutional rule, (19) in order to escape its obligation under the Treaty to take all necessary measures in order to ensure that Community law has full effect, where necessary by making good the wrongs suffered by individuals as a result of its infringement of its Community obligations. (20) On the contrary, as the Court has required in a different context, that of national budgetary rules,
"it falls to a Member State in accordance with the general obligations imposed on Member States by Article 5 of the Treaty, to recognize the consequences, in its internal order, of its adherence to the Community and, if necessary, to adapt its procedures for budgetary provision in such a way that they do not form an obstacle to the implementation ... of its obligations within the framework of the Treaty." (21)
I think that that is all the more necessary inasmuch as the implementation of directives is not always, or in all Member States, a matter for the legislature; to take refuge behind the principle of the immunity of the legislature would therefore give rise to disparities not only from one Member State to another, according to whether they recognize that principle or the implementation of directives as a matter for the legislature, but even within Member States where the legislature has the power to implement some directives but not all. I should add that in its order in Joined Cases 24 and 97/80-R ([1980] ECR 1319 at page 1333), paragraph 16, the Court had already firmly declared that
"by reason solely of the judgment declaring the Member State to be in default, the State concerned is required to take the necessary measures to remedy its default and may not create any impediment whatsoever".
In that case, the Court itself was silent on the matter. Likewise AG Tesauro in Factortame I, the ECJ in Factortame I, and the ECJ in Factortame III/Brasserie du Pêcheur. In that latter case, AG Tesauro writes:
36. Admittedly, in the past the idea that the State was not liable for acts or omissions of the legislature was a widespread one. Its rationale was that the sovereign could do no wrong or, according to a more modern, democratic version, parliamentary sovereignty. In other words, in so far as it was the highest expression of the sovereign power, the legislature fell in principle outside the general rules governing liability in view, inter alia , of its democratic legitimacy.That view, which took root above all in legal systems in which the law was not reviewed in the light of some higher parameter, should take on a different complexion where there is a higher norm which can be used to verify and, in an appropriate case, deny the legality of the legislature's activity. Yet, also in those legal systems in which there is not only a clear, formal hierarchy as between constitutional rules and legislative rules, but also a mechanism of ad hoc supervision as to constant compliance with that hierarchy (Austria, Italy, Germany and Spain, for example), the question as to whether compensation can be awarded for loss or damage ensuing from an unconstitutional law is far from having been incontestably resolved. (42) The fact remains, however, that in such a case it cannot be ruled out that the State will be called upon to answer for the loss or damage caused by laws declared unconstitutional.
Fn. 42: For instance, in Germany such a possibility is not ruled out per se , but only to the extent to which the official duty infringed is not referable to a particular third party, which, as I have already mentioned, is true in most cases involving an unlawful act or omission attributable to the legislature; for those very reasons, the possibility in question is unquestionably available in relation to individual-case laws ( Einzelfallgesetze ). However, the prevalent view among academic writers is that an individual should have the right to compensation at least in the event of breaches of fundamental rights (see, for instance, in this connection, Haverkate: Amtshaftung bei legislativem Unrecht und die Grundrechtsbildung des Gesetzgebers, in NJW, 1973, p. 441). In Italy, in which the question is still the subject of debate, such a possibility has been allowed, for example, in the specific case of presidential expropriating decrees issued pursuant to the agrarian reform which have been declared unconstitutional, where the agrarian reform agency was held liable in damages even though it was not guilty of any unlawful conduct; hence the conviction that in such case the compensation is more in the nature of restitution of undue payments, relating solely to the value of the asset lost (for some more general observations in this connection, see Zagrebelsky in Processo costituzionale in Enciclopedia del Diritto XXXVI, 1987, p. 639).
In other words, even analogising from European Federal states does not lead the AG to consider anything even remotely resembling the US approach. And on the whole, the ECJ simply dismissed the problem as one of effectiveness of EU law and one of its uniform applicability in all Member States, regardless of their internal rules with regard to sovereign liability. Which is all well and good, but does not address the threshold philosophical question of whether it should be possible to sue sovereigns without their consent in the first place. (We're going to ignore, for the moment, the ultimate cop-out that the Member States consented to be sued when they joined the European Union. That argument may be legally sound, but philosophically it is more than unsatisfying.)
Long story short: I don't know as much about the difference between Europe and the US in this regard as I would like, but I know enough to know that I would like to know more.
Posted by martinned at Wednesday, March 21, 2012 0 comments
Courtesy of the European Parliament's Twitter feed, I was informed that the PETI Committee had decided to declare the petition against ACTA admissible. Despite being an EU lawyer by training, I have to admit that that one made me do a double take. They declared WHAT admissible? WHO declared something admissible? In my defence, admissibility is usually something for courts and lawsuits. Petitions, on the other hand, are usually something that is imagined as low-threshold and lawyer-free. But look at what the Treaties say:
This provision contains at least three reasons why a petition might not be admissible: The petitioner might not be an EU citizen, the petition might not be on a matter within the competences of the EU and the petitioner might not be directly affected by the subject matter of the petition.
These first two I do not care about very much. I would avoid like the plague any suggestion that a failure to meet those requirements results in anything as technical sounding as "inadmissibility", but it is clear that the EP can't be in the business of responding in detail to petitions by Chinese residents complaining about the Slovakian education system.
Direct concern, on the other hand, is a big, big problem. The issue is that direct concern is a doctrine from EU procedural law under the old art. 230 EC. In its new version, the provision allowing EU citizens to sue to have EU legal acts annulled reads:
(Feel free to ignore the part where you're supposed to sue the Act rather than the EU Institutions that enacted it.)
When I took EU procedure in undergraduate, we had great fun studying the meaning of the bolded words, as discussed in such cases as Plaumann, UPA and Jégo-Quéré. But in so doing, we all understood that we were having lawyer-fun. Normal people do not tend to find this kind of thing the least bit amusing. Do we really expect EU citizens and residents to reflect on this before submitting a petition?
43. The Court's case-law shows that, for a person to be directly concerned by a Community measure, the latter must directly affect the legal situation of the individual and leave no discretion to the addressees of that measure who are entrusted with the task of implementing it, such implementation being purely automatic and resulting from Community rules without the application of other intermediate rules (see to that effect, in particular, International Fruit Company, cited above, paragraphs 23 to 29, Case 92/78 Simmenthal v Commission [1979] ECR 777, paragraphs 25 and 26, Case113/77 NTN Toyo Bearing Company and Others v Council [1979] ECR 1185, paragraphs 11 and 12, Case 118/77 ISO v Council [1979] ECR 1277, paragraph 26, Case 119/77 Nippon Seiko and Others v Council and Commission [1979] ECR 1303, paragraph 14, Case 120/77 Koyo Seiko and Others v Council and Commission [1979] ECR 1337, paragraph 25, Case 121/77 Nachi Fujikoshi and Others v Council [1979] ECR 1363, paragraph 11, Joined Cases 87/77, 130/77, 22/83, 9/84 and 10/84 Salerno and Others v Commission and Council [1985] ECR 2523, paragraph 31, Case 333/85 Mannesmann-Röhrenwerke and Benteler v Council [1987] ECR 1381, paragraph 14, Case 55/86 Arposol v Council [1988] ECR 13, paragraphs 11 to 13, Case 207/86 Apesco v Commission [1988] ECR 2151,paragraph 12, and Case C-152/88 Sofrimport v Commission [1990] ECR I-2477, paragraph 9).
(Société Louis Dreyfus v. Commission, Case C-386/96 P, ECR-I [1998] p. 2309)
Surely the whole point of the petitions process is to create a system for complaints with as few legal hurdles as possible? So why doesn't the Treaty more clearly distinguish between the legal hurdles for an Action for Annulment and whatever non-legal hurdles they want to create for a petition? And even if the EP does not apply the CJEU's detailed jurisprudence when deciding this issue, why are we restricting the right of petition to cases where the citizen or resident is directly affected? Why shouldn't I be able to petition them to complain about the Common Agricultural Policy? It's stupid, and I should be able to petition them to let them know I feel that way.
Posted by martinned at Tuesday, March 20, 2012 0 comments
Posted by martinned at Friday, March 16, 2012 0 comments
For completeness sake, I should probably explain the one area where I disagree with Paul Krugman about "that austerity nonsense", as I called it yesterday.
Krugman constantly describes the actions of the European leaders in the current economic crisis in terms of "the confidence fairy". I, on the other hand, think that this is wrong.
To be sure, when Wolfgang Schäuble came here to Florence last week to participate in Debating Europe, he spent a minute making the argument that research has shown that there is a debt/GDP ratio above which countries cannot tread without getting into difficulties. (Never mind that this research, by Reinhart and Rogoff, is highly flawed. It also conveniently ignores such pertinent cases as the 250% Debt/GDP ratio enjoyed by the UK at the start of its post-war economic boom.) However, the vast majority of policy makers either do not mention such research at all, or - like Schäuble - mention it only to "sell" something they already want to do anyway. That's why it is pointless to follow the Krugman mantra and keep taking pot-shots at the confidence fairy. The confidence fairy doesn't matter, it is only a rationalisation.
And that's what really puzzles me. For all its flaws, expansionary austerity is an actual theory. A wrong theory, but a theory that could conceivably be correct. It is possible to imagine a parallel universe where this would be a coherent description of what happens, where this theory would result in correct and useful policy prescriptions. It's not this one, but it's close. Actual this-world economic science has some better models too, generally rooted in Keynesianism. They tell you that the consequences of a fiscal impulse in the economy (i.e. the opposite of austerity) generally depend on the reaction of the central bank and more generally on the scope for crowding out on capital markets. Given that we're currently about 100 miles away from any rate increase, that no one is borrowing, that there are no inflation worries, no nothing, it's the best of all possible situations for stimulus. There's no down side, as long as you spend it on something that's worth the (near-zero) interest you have to pay to borrow the money in question. That's another model.
So if European policy makers aren't working from a framework of expansionary austerity, and they're not doing any form of Keynesianism, what are they doing? What is their model of the economy, the model that they are using to decide when to apply how much austerity?
The answer is that I think they don't have one. For people like Angela Merkel austerity is not something they do because they think it will benefit the German or European economy. Instead I think they view it purely in moral terms: the government should pay its own way the same as everybody else. To do differently would be unethical. In Germany, this is known as the principle of the Swabian Houswife. This is very, very bad.
If the German/Dutch approach were based on some kind of economic theory, it would be possible to have a reasoned argument about its efficacy. But given that their preference is purely value-based, it is like a religion. De religionis non est disputandum. But if we're not careful, this religion is going reduce us all to poverty.
Since my friends from Breughel encouraged me to disagree more, I suppose I have to.
But seriously, most of their post of why there is no pan-European blogosphere is completely correct. There isn't one for very same reason that there is no pan-European public opinion, or even a pan-European labour market for that matter: too much heterogeneity and too many barriers to trade in ideas.
But I seriously have to disagree with the suggestion that Europeans aren't as good at arguing as the Americans. They write:
Second, there are probably also “cultural” reasons behind that phenomenon. Europeans don’t have “debate” classes in High School and they tend to have far less confrontational academic discussions (we have nothing as direct and antagonistic as the Cochrane/Hubbard vs. Krugman/DeLong for instance). European economists seem to prefer spreading knowledge rather than stirring debate. VoxEU, Telos, the column section at Eurointelligence, and the new OFCE blog all provide avenues to disseminate research and to express opinions, but are not, so to speak, blogs with arguments and disagreements.
We invented it for crying out loud! Not just parliament, but also continuation of politics by other means - an area that we have traditionally excelled at. The comments sections of our newspaper websites are full of moronic comments just like in the US. Everybody argues with everybody all over the place, often times quite unbothered by any lack of knowledge or understanding. My compatriots - the Dutch - pride themselves in their rudeness, in their willingness and ability to speak the truth, the whole truth and nothing but the truth regardless of whether it is polite, kind or politic. We're the ones who invented GeenStijl! (Official tagline: "tendentious, unfounded and needlessly hurtful".)
The problem isn't that Europeans don't debate, it is that European blogs don't debate, at least not with each other. And the reason for that, other than the ones already given in the Bruegel post, is that in Europe relatively more of the interesting topics are national rather than European. You can only have a European debate if there are things happening at the European level that make people mad.
Personally, I wouldn't mind a good debate about all this austerity nonsense, but it looks like Krugman already has that covered. (For what it's worth, I'm an economist and I think he's right.) So what else should we debate about? That dumbass PVV Polish complaint hotline? Surely not... It may be dumb in the extreme, but so is giving it more attention than strictly necessary. So what's left?
Posted by martinned at Thursday, March 15, 2012 0 comments