| By John Blundell, Director General of the Institute of Economic Affairs
1 st March 2005
Prime Minister Dr Ivo Sanader
Trg Sv Marka 2
Dear Prime Minister,
Ten questions to ask before you give away your country
It was good to sit with you at dinner on my recent visit to Croatia . Your country is doing well and clearly has great potential. However, I do worry about your headlong rush into the EU. Let me share with you ten questions every Croatian should ask and be able to answer before you hand over your country and its governance to Brussels :
1. Why would you want to give control of your country away? After all, you haven't had it very long. Of course, you'll be told that belonging to the EU in no way means giving away your country's sovereignty. Sovereignty is a country's constitutional independence, its exclusive political authority. It cannot be shared or pooled. But consider this: once in the EU, your country will be subject to a higher political authority – Brussels . The EU will overrule your government's policies on foreign affairs, security, justice and much much more. It is planning its own constitution – which will allow the EU to sign treaties without consulting your government. That sounds uncomfortably like relinquishing your country's authority. You can't give it up and keep it at the same time. Being a sovereign nation is like being a virgin – either you are one or you're not.
2. Do you want more rules and regulations? The EU has a strong desire to “harmonise” in order to iron out the differences between member states. The way it does this is by devising regulations. There are currently hundreds of thousands of them, covering areas as diverse as pollution and how you hire and fire employees, with more than 5,000 new ones coming out of Brussels every year. It's not always easy for countries to meet these demands and for small businesses it's sometimes impossible. If you think you're regulated enough already, you ain't seen nothing yet!
3. Would you be happy joining a corrupt organisation? There's no doubt that the EU is rotten to the core. In May 2004 Britain 's National Audit Office (NAO) reported 10,000 cases of EU fraud in 2002 costing £700 million up from 5,482 cases costing £386 million in 2001 ie a doubling of fraud in just one year. But figures like this are the tip of the iceberg – they only relate to matters which national governments know about and are prepared to divulge. A more damning estimate is that around five per cent of the Commission's budget - or almost £4 billion – goes missing every year. That's your money, by the way. Disgusted? You should be. But you can't do anything about it. You can't even vote the culprits out of office.
4. Do you think barriers to trade are a good thing? Well, you ought to, because that's what you're going to get by joining the EU. There will of course be advantages when it comes to trading with other member nations, but what about all those other countries, the US , for example? Croatia must be open to the world, not just its neighbours. You were locked into Tito's socialism for a long time; you do not need Brussels ' version of the same error.
5. Is high unemployment your idea of fun? If you enjoy the prospect of low growth, rigid labour markets, increasingly intrusive regulation, high and rising taxes, and a high level of trade protection in some sectors, then the EU is for you. Oh, and for good measure the result is the high unemployment which Europe has experienced for more than a decade. It's not a coincidence that the two most prosperous European nations, Norway and Switzerland , are not in the EU.
6. How do you feel about entering the most inefficient system of agricultural support ever devised? The Common Agricultural Policy was a noble idea: subsidise farmers to keep farm wages high and stop people moving from country areas to the city in search of better-paid jobs. But it has failed and it's the ordinary citizens who've suffered – they're paying more for food and more in taxes as a result. And, guess what? Rural areas are still in decline.
7. Do you mind giving up democracy? Right now, you can express your views on what happens in your country by voting. But for the EU to have a political democracy would mean having a European people, European public opinion and a chance to vote for what happens in Europe . But Europe does not have a common people, nor does it have common bonds of allegiance and obligation, which means that citizens would be unlikely to accept majority decisions which they believe discriminate against them or unfairly favour others. That is precisely why Europe 's political elites and bureaucrats will decide on the really important European issues, which will of course affect what happens in your own country. It's simpler that way, even if the price is democracy.
8. How do you fancy being a very small fish in a very big European pond? Under the EU constitution, more voting power will go to countries with bigger populations and there will be more majority decisions, rather than decisions based on unanimity. This means that your elected representatives will have very little say in what happens in Europe . And, as we all know, the French and the Germans stick together on many important issues. They are the big fish in the pond of Europe . Your country, I regret to say, stands to be one of the minnows.
9. Are you happy to give up your currency? A simple sentimental attachment to your own currency might seem a good enough reason not to give it up, but there are better ones. If your country adopts the Euro, it loses control of its own economy. The European Central Bank will make decisions about interest rates. No longer will your own financial experts and politicians be able decide what to do with your money. Instead, your economy will embark on an impossible journey: it will leave the country and go north nearly 1,000 kilometres to Frankfurt , but be dragged rapidly southwards at the same time. Your economy will suffer because it's impossible to find one interest rate to suit all countries in the Euro. If you need more proof, bear in mind that the best-performing EU countries are those which have not adopted the Euro.
10. Does it bother you that, after all you have been through, you will be entering a union that has uncomfortable parallels with the former Yugoslavia ? In recent times, you have become the citizen of an independent and democratic state. Before that, you were forced to be part of a group of countries which threw together people of different languages and cultures. The only thing many of the peoples in this federation had in common was that all this was imposed on you by an unrepresentative political elite. A bit like the EU really.
I look forward to hearing your answers. In the meantime I wish you all the very best as you wrestle with so many difficult issues.
John Blundell is Director General of the Institute of Economic Affairs. He
serves on the board of a number of major free think tanks including Atlas
Economic Research Foundation, IHS, and is one of the founding leadership
board directors of the Adriatic Institute for Public Policy, Croatia's
first independent free market think tank.
This important letter is being posted in American and European think tanks
and sent to journalists and editors in major capitals that cover