European Union and the Failed Welfare State

November 27, 2012 07:06

Could it be that rich and productive countries are tired of subsidizing social welfare, re-distribution of wealth schemes, failed multiculturalism, and sloth?



By Ileana Johnson Paugh


The Bilderberg Group’s Steering Committee met on November 13-14, 2012 for the 61th working session of the world’s most exclusive club, during the Rome Film Festival at Hotel de Russie, hoping to blend in with celebrities, fans, reporters, and movie directors, hidden in plain view, to discuss the fate of the EU, Italy, Greece, and Spain.


Forgoing the rental of an entire hotel and the secrecy surrounding previous meetings, the 80 people in attendance spent, according to the Italian daily newspapers, Il Vostro  ( and InvestireOggi (, 100,000 euros, a pricey sum considering that ordinary citizens of the 27-member union were asked to make deep cuts in their welfare state driven budgets.


The Bilderberg attendees included a long list of Italian CEOs, Mario Monti, the Italian Prime Minister, cabinet members, Italian bankers, Mario Draghi, the European Central Bank president, the owner or RAI, Tom Enders of Eads, Marcus Agius of Barclays, Kenneth Jacobs of Lazard, Edmund Clark of Td Bank, and the chairman of Alcoa and of Shell.


Spain, Italy, and Greece have protested vehemently over the required austerity measures which citizens were unwilling to accept – they strongly believed that the crisis was engineering by the very people who were now “concerned” with resolving it.


Additionally, once citizens became dependent on the welfare state, mentality, and largesse, it was much harder to become self-sufficient. When the free money and entitlements were scaled back and financial responsibility was required in order to pay for banks that gambled with derivatives but were unwilling to write off the resulting losses, the masses protested vehemently and even violently.


The blame game was exacerbated by the British weekly, the Economist, after its 14 page report called France’s economy a “ticking time bomb and the biggest threat to the euro currency’s stability.” The French called the photograph headlining the article, a bundle of French baguettes tied with a lit fuse and the French flag, inflammatory and “French bashing.” The Economist had accused the French voters in March of being in “denial,” calling President Francois Hollande “dangerous” for Europe. (France 24)


As a strategic member of the Eurozone, France is a threat to EU because of its large public sector that encompasses 57 percent of GDP. The socialist president Francois Hollande was elected on the promise of 75 percent income tax on the rich, higher taxes on companies, wealth, capital gains, and dividends, a higher minimum wage, more entitlements, and the rollback of the Sarkozy measure to increase the retirement age.


Politicians/oligarchs spent huge sums to control the Eurozone. German industry in general and its exports profited from the initial EU conglomeration. After Germany gave over one trillion euros in bailouts to Italy, Spain, and Greece, Germany’s economic growth slowed down, even in rich parts of Germany like Mainz and the industrialized Rhineland.


Germany’s economy has been successful when compared to the Eurozone. When compared to the period when the currency was the German mark or when compared to other non-EU countries, it has been a failure. (


According to Rodney Atkinson, “Germany’s success in productivity is ironically due not to GDP per capita growth but to wages falling relative to production.” Thus Germany was “left with poor consumers at home and poor consumers abroad who cannot afford to pay their debts to Germany.” Chancellor Angela Merkel urged German companies to give their employees higher wage increases in 2012. “Prosperous Bavaria is challenging in court a fiscal balancing system that makes it hand over some revenue to poorer federal states.” (Reuters, October 15, 2012)


The fiscal engineering is not a surprise. Socialist states promote re-distribution of wealth and progressives endorse taxing the rich excessively in order to “even-out the playing field” in the name of social justice. If we were to confiscate the entire accumulated wealth of every rich person in this country, it would last perhaps, at the current rate of government spending, less than two months.


The permanent euro bailout, the European Stability Mechanism, has been challenged in Constitutional Court by 37,000 Germans, the largest Constitutional complaint in German history, but the oligarchs prevailed. The European Central Bank (ECB) decided in September that it would purchase unlimited quantities of sovereign bonds from EU countries in crisis. ECB will link its market interventions to ESM, applying strict austerity criteria to any country that seeks aid. National parliaments will have no control over the unlimited hyper bailout fund, making them irrelevant. (Phillip Wittrock)


The Catalan-speaking Catalonia, a wealthier region in Spain with high-tech industries and productive farming, paying the lion’s share in taxes to Madrid, while getting less revenue when its own finances are overstretched, resents having to pay for poor areas such as Spanish-speaking Andalucia. Similarly, Dutch-speaking Flanders resents paying for French-speaking Wallonia. (Paul Taylor and Robert-Jan Bartunek, October 15, 2012)


Heather Grabbe, the Brussels director for the Open Society Institute, explains the separatist move among many states and countries as not correlated to money but an expression of “historical grievances and language.” (Steven Erlanger, The New York Times, Europe’s Richer Regions Want Out, October 6, 2012)


Could it be that rich and productive countries are tired of subsidizing social welfare, re-distribution of wealth schemes, failed multiculturalism, and sloth?


Mariano Rajoy, the Spanish Prime Minister, warned separatist regions that opting for independence will mean being shut out of EU – new member states admission requires unanimous agreement. With unemployment at 25 percent in Spain, 6 of its 17 regions asked the central government for a bailout. Creating jobs and improving economic growth can only happen by the existence of the private sector and economic activity of citizens who pay taxes to the government.


To say that people in Spain or Italy do not like to pay taxes, it is an understatement. According to the Tax Research Institute in the U.K., 22.5 percent of GDP in Spain comes from work off the books. As fewer people are paying taxes in the underground economy, the state debt gets larger, more austerity measures are required, and fewer resources exist to jump-start the economy. (Lisa Abend, Time World, October 31, 2012)


Italy’s Prime Minister, Mario Monti, wants his country to be bailed out as well because he ‘fears the parliamentary democracy could bring down the European Union.” Mass demonstrations in Rome against German imposed austerity measures reflected those in Spain, France, Greece, and Portugal. There is a deep resentment against Germany’s dominance in the EU.


Nigel Farage believes EU bailouts are nothing short of subjugation of countries in financial need to the new world order. Farage describes the next phase of EU control as forcing those who “do not need or want a bailout to accept a bailout, to sign budget guarantees and to have the power to strike down national budgets after they’ve been through national parliaments.”


“I feel that the Euro zone is now in a very dark place, economically, socially, politically, and I fear for the countries trapped inside in that prison will be there for many years to come. It is against this backdrop that the Nobel Peace Prize has been awarded to the European Union.” (Nigel Farage, UK Independence Party)


Oskar Freysinger, Vice President of the Swiss People’s Party, pointed out in an interview that the European Union is imposed on nations by technocrats. He believes that EU will fail eventually because “citizens are identifying less and less with a bureaucratic anti-democratic and centralized power” like the EU.


Tony Blair thinks that the EU needs a president who can rule over a “sustainable” European integration. UN Agenda 21 is promoting everything sustainable, why not a sustainable integration under the aegis of a president elected through Europe-wide election? (The Telegraph, October 29, 2012)


The Brits are not charmed by EU since the union is costing them jobs and it aims to wipe out national borders. Brussels pays EU citizens to cross borders in order to find employment elsewhere, but it won’t pay for Brits to move within their country in search of jobs.


“A common European jobs market exports Greek and Spanish unemployed to the relatively rich north in order to bolster confidence in the Euro and keep it going until the next crisis summit.” (Tim Aker, Get Britain Out, November 1, 2012)


Rodney Atkinson has given the best and most succinct explanation in favor of the EU demise, the end of the welfare enslaving union whose ultimate goal is to gain one world government control. “The European Union is responsible for the abolition of 27 national constitutions, 27 parliaments, 17 currencies and 17 Central Banks and a record decline in the share of world trade and wealth creation attributable to its members. There are over 25 million unemployed in the European Union and it has never been so detested by those who ‘benefit’ from its institutions.” (EU Fiddles Illegal Nobel Prize, October 24, 2012)


Giving up the security of a mediocre standard of living provided by the welfare system for the insecurity of making a better living, earning it, and being proud of the accomplishments of self-reliance born by a productive citizen mentality, is easier said than done. Millions of Europeans have become accustomed to the socialist year-end bonus, the 13th salary, the six weeks paid vacations, drinking on the job, the legal difficulty of employers to fire inadequate employees, two years paid maternity leave, missing work for weeks when afflicted by a simple cold, retiring at 50 in more than 600 professions, being taken care of from cradle to grave by a state lording over its citizens, having a small state-assigned apartment, utility bills subsidies, socialized medical care, spa and massage vacations when overworked, and many, many other  perks.

As Margaret Thatcher so aptly put it, “The problem with socialism is that at some point, you run out of other people’s money,” and huge national debt becomes a threat that can no longer be ignored.


Welfare dependency reduces other beneficial programs such as national defense. Europeans have become accustomed to United States protecting their continent while they are free to spend lavishly on social programs while belittling the “stupid” Americans and their efforts.


Welfare mentality has made Europeans lazier, working less hours per week than American counterparts. During frequent union strikes and demonstrations they complain that they are overworked.


Europeans and their multicultural residents have learned how to game the system to maximize benefits. Few care or take pride in earned success. Young people have no work ethic or shame that they demand more and more entitlements, expecting society to take care of all their problems while the truly helpless fall quietly through the cracks of an overburdened social welfare system.


We are not far from Europe; all you have to do is look at the liberal states that voted socialism and Santa Clause every day.  The largest case study is California, the home of the deprived and proud of it – huge public sector wages, benefits that would make Europeans proud, a declining tax base as job creators and producers are moving out of state, decreased economic production, high unemployment, ever-increasing welfare enrollment from citizens and illegal aliens, higher taxes, and huge deficits. The poverty rate is 23.5 percent. Michigan, Illinois, Miami, D.C. are not far behind. Social Security was “created to prevent destitution among the elderly. It now subsidizes the comfortable” and has become an expected and entitled way of life. (Robert J. Samuelson, Welfare State, No Matter what You Call It, Is Breaking Us, November 19, 2012)


The ultimate irony of the welfare state dependency is exemplified by the pride with which the U.S. Department of Agriculture advertises the distribution this year of the greatest amount of food stamps ever to 47 million people while the National Park Service asks visitors to stop feeding the animals because they grow dependent on handouts and do not learn to care for themselves. “Social justice” and helplessness born of dependency have replaced self-reliance.


Cordt Schnibben of Der Spiegel asked in “Prison of Debt Paralyzes West,” if there is a human debt gene. The welfare state has brought western debt to unmanageable levels. Economic systems, whether capitalist or socialist, seem to be plagued by an unending crisis. Democracies can’t manage money and are resorting to printing, creating money out of thin air, incurring trillions in additional debt in order to sustain the welfare state. He said that “the introduction of the euro is nothing but the continuation of debt mania with more audacious methods. The euro countries took advantage of the favorable interest rates offered by the common currency to get into even more debt.” He believes that democracy breeds loose monetary policy, allowing too much government spending on social programs. Politicians at the municipal, state, and national levels have become utterly irresponsible in their handling of money in the pursuit of political control of the masses, offering lavish benefits to a citizenry that demands ever more in exchange for a perennial vote for the party that promises and dispenses most goodies.


The recent EU Budget Summit in Brussels failed to agree on the next seven-year budget – the “rich” and the “poor” countries disagreed on key points. The richest countries, Germany, the U.K., Denmark, Sweden, and the Netherlands decided to cut their contribution to the collective pool of welfare cash.


Dr. Ileana Johnson Paugh, ( Romanian Conservative) ( Romanian Conservative) is a freelance writer (Canada Free Press, Romanian Conservative,, author, radio commentator (Silvio Canto Jr. Blogtalk Radio, Butler on Business WAFS 1190, and Republic Broadcasting Network), and speaker. Her book, “Echoes of Communism, is available at Amazon in paperback and Kindle. Short essays describe health care, education, poverty, religion, social engineering, and confiscation of property. A second book, “Liberty on Life Support,” is also available at Amazon in paperback and Kindle. Her commentaries reflect American Exceptionalism, the economy, immigration, and education.Visit her website, Get her new book at Amazon, “U.N. Agenda 21: Environmental Piracy,” everything you ever wanted to know about Agenda 21 and some.

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