December 15, 2022 - 7:00am

Otto von Bismarck supposedly once said that “with bad laws and good civil servants it’s still possible to govern. But with bad civil servants even the best laws can’t help.” Today, he would probably have to add that the worse the civil servants are, the more laws and regulations they seem to produce. 

The European Union is increasingly becoming an example of this. It has been an open secret for a long time that working for EU institutions is either a form of early retirement for politicians, or a lucrative career for lifelong bureaucrats.

The European Parliament is currently roiled by a corruption scandal which alleges that Qatar bribed one of the legislative body’s vice-presidents, Eva Kaili, to lobby on its behalf. Apparently she received 600,000 in cash, which is ironic since the Union is currently in discussions to limit cash payments for EU citizens to a maximum of 10,000. The vice-president title might sound impressive, but in fact there are 14 of them, presiding over 405 members of a “parliament” that does not even have the fundamental right of every other legislature in the free world: the right to propose laws. The parliament can only approve or reject proposals from the European Commission, making it a representative legislative body in name only. 

One of these proposals was the implementation of a special tax on imports based on greenhouse gas emissions, allowing European governments to engage in a form of climate change protectionism. This will be a massive blow to developing nations trying to export more goods and services to the EU, since these countries very often have particularly high emissions due to an underdeveloped renewable energy sector. 

This comes on top of new ESG reporting rules that will force companies to dedicate significant administrative resources to the task of “corporate sustainability reporting,” which will add even more red tape for companies that are already suffering under high taxes, excess regulation, and growing energy prices. 

It remains to be seen whether all of these sweeping plans will comply with international trade laws, but one consequence will be unavoidable: the costs for producers and thereby the prices for consumers will rise with every new regulation, and there is no end in sight when it comes to Brussels’s appetite for interfering with businesses wherever it can.

For example, shortly after Elon Musk took over Twitter, Thierry Breton — the Commissioner of the Internal Market of the European Union — proclaimed on the social networking site that “in Europe, the bird will fly by EU rules.” These rules (among others) come in the form of the 2022 EU Digital Services Act, yet another regulatory framework which helps to explain why there is not a single European company among the top 10 most used social media platforms within the EU. 

It is quite remarkable that, instead of creating structures to incentivise innovation and competitiveness, the EU prefers its organisations to ban competition and ensure that, in the long run, Europeans will pay more for lower quality.

There is an habit in Brussels (shared in many other European capitals) that you can simply regulate your way out of a crisis and the rest of the world will play along. As will become increasingly clear over the next few years, this will not work: the world will move on while Europe falls further behind. The ultimate price is paid by taxpayers who will continue to subsidise the cushioned careers of an ever-growing bureaucracy — but not in cash, of course, since that would be illegal. For some, at least.