by Philip Pilkington
Thursday, 22
September 2022
Spotted
15:30

EU unveils new emergency powers

A new tool will allow the bloc to seize control over key parts of the economy
by Philip Pilkington
The EU has a new toy

This week, to little fanfare, the European Commission set out an ‘emergency tool’ called the ‘Single Market Emergency Instrument’, by which it could seize control over key parts of the European economy. Effectively, this tool would allow the commission to invoke executive powers to force firms to engage in economic activities that they would not do were they left alone.

“This instrument is the opposite of a planned economy,” the Internal Market Commissioner Thierry Breton said — presumably because the plan looks very much like the first step to a planned economy. In a system of free enterprise, while government bodies can regulate companies, they cannot tell them how to undertake their business operations. The Single Market Emergency Instrument crosses that line and allows the European Commission to directly insert itself in the business operations of private companies.

The details of the plan are worrisome. Together with member states, the EU executive will be able to ‘monitor and tackle any potential threat that could trigger disruptions or shortages of key products within the EU’. Referring to the unilateral action taken by some member states during the Covid-19 pandemic, the SMEI aims to avoid shortages, supply-chain disruption and hoarding.

What constitutes a crisis is left deliberately vague, but if officials believe that one is on the horizon, they will then enter ‘vigilance phase’, which will allow the Commission to call on countries to build up strategic reserves in order to prevent shortages. After the vigilance phase, the Commission can then invoke the ‘emergency mode’ in which the Commission starts requesting detailed information on the business operations of private companies. In turn, it can then force these companies to build up excess supplies of goods that they otherwise would not need. Failure to do so could result in a €200,000 fine – although one could imagine this figure rising if the initial penalty does not provide a sufficient disincentive.

The system is set up in such a way that if bureaucrats working in the Commission get a sufficient fright from a model projecting some doomsday scenario or other, they will be able to activate their emergency powers over private industry.

So, for example, if another pandemic was thought to be on its way, this could trigger a run on medical equipment, allowing the Commission to take supplies from one country and give them to another. Or perhaps climate change is declared a crisis. The bureaucrats can then — based on their ‘modelling’ — activate emergency mode and dictate to medical product firms or food production firms to start overproducing their product and storing it. Even if the executives at these companies think that the bureaucrats’ projections are wrong, they will have to comply. These are hypothetical scenarios, of course. But it is now a possibility thanks to the introduction of the SMEI.

The Union was supposed to be one that facilitated trade and promoted peace between its members. In 2022 it is giving itself emergency powers to intervene in the business operations of private companies. Some member states will happily consent to this move, but most rational actors will probably decide that basing their economic planning — and their ability to allow free enterprise — on the prognostications of bureaucrats in Brussels is probably not in their economic interest.

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Stuart Sutherland
Stuart Sutherland
13 days ago

Thank goodness the UK got out of this union!

Matt M
Matt M
13 days ago

Indeed if Liz and Kwasi stick to their guns, we might find free-market Britain has a pretty big competitive advantage over the EU and its Five-Year Plans for Tractor Production.

Last edited 13 days ago by Matt M
Walter Marvell
Walter Marvell
12 days ago

We should not gloat at auch authoritarian over reach (though it is incredible). 40 years worth of heavy regulatory EUs laws are still fully embedded here. Their laws are still our laws. In every walk of life – tariffs, planning, environment, food, finance employment. Hence the deranged Remainiac frothing over something as inconsequential as bankers bonuses. Johnson did nothing to carve out a sovereign independent path. The battle royal begins… tomorrow!!!. Whether we can escape the reckoning for the grand strategic catastrophes – premature Net Zero and mass migration for example – remains to be seen.

Konstantinos Stavropoulos
Konstantinos Stavropoulos
6 days ago

It turns out to be lucky you…!

Last edited 6 days ago by Konstantinos Stavropoulos
Paddy Taylor
Paddy Taylor
13 days ago

Which international company would choose to base their headquarters inside a jurisdiction that can arbitrarily intervene in that company’s operation?
Time and again the EU takes careful aim and then shoots itself in the foot.

Jeremy Bray
Jeremy Bray
12 days ago
Reply to  Paddy Taylor

“In 1930, the National Council of Corporations was established in Italy and it was for representatives of all levels of the twenty-two key elements of the economy to meet and resolve problems. In practice, it was an enormous bureaucracy of committees that while consolidating the potential powers of the state resulted in a cumbersome and inefficient system of patronage and obstructionism”

Those who recall the policies of Italy as highlighted above during the interwar years under the system described as F****ist Corporatism can see where things are going in Europe. Large businesses with the right bureaucratic connections can flourish in such an environment although they remain at risk of arbitrary decisions by the state politicians.

John Riordan
John Riordan
12 days ago
Reply to  Jeremy Bray

I was wondering if it was worth making this point but I see you’ve done it already.

Really, Mussolini would have been proud at what’s described above.

Matt M
Matt M
13 days ago

I see the return of the famous EEC Butter Mountains and Wine Lakes.

Steve Murray
Steve Murray
13 days ago
Reply to  Matt M

The latter, presumably, to ensure supplies for ex-EU Presidents and the former required to ensure the buttering up of EU serfs.

Floras Post
Floras Post
12 days ago
Reply to  Matt M

There’ll be no butter in hell

Malcolm Webb
Malcolm Webb
12 days ago

One can only hope that the Parliament and/or the Council will blow this sinister draft Regulation out of the water. If not it will be bureaucratic control over democracy gone mad. It us appalling that the Commission seriously proposes such autocratic powers for itself. Thank goodness we are out.

Steve Elliott
Steve Elliott
13 days ago

Does this have anything to do with the EU’s row with AstraZeneca over the supply of vaccine? Didn’t they want AZ to stop sending it to the UK and send it to the EU instead?

AC Harper
AC Harper
13 days ago

I’ve argued before that the EU is a New Hanseatic League whose purpose is to protect and promote Big European Business. It seems that the Bureaucrats have decided that empowering and protecting themselves takes precedence.
The concern for the ordinary people of the EU has always been an afterthought.

Brett H
Brett H
12 days ago

Funny how the world changes. If they implement this regulation then corporations will move their operation out of Europe to any other country that welcomes them. It doesn’t take much to imagine what this will do to Europe.

Jason Highley
Jason Highley
12 days ago

Oh good, glad to know that the fresh hell unfolding before me every day wasn’t a dream.

Steve Elliott
Steve Elliott
13 days ago

Please excuse my ignorance. Would a ‘tool’ such as this one come directly from within the commission without reference to member states or the council of the European Union? I assume it would face a number of hurdles before it could be actioned but could a member state veto such a policy?

Andrew Horsman
Andrew Horsman
12 days ago
Reply to  Steve Elliott

Not really. On a cursory skim through the turgid legislation, the Commission seems to be proposing seizing extraordinary power through an Implementing Act adopted after (or if deemed urgent, before) a qualified majority vote of a committee of member state appointed representatives and on the recommend of an advisory committee of member state bureaucrats. So no national vetoes. Because it’s an Implementing rather than a Delegated Act and one that is to be scrutinised through the Examination Procedure, there is no role for the European Parliament other than scope for the supranational lawmaking powerhouse that is the EP to call it out as ultra-vires after the fact (please someone correct me if I am wrong on the details of this!).

This is happening across the world. Enabling acts further to disempower already enfeebled legislatures and to benefit captured executives. Most parliamentarians – let alone Joe Public – don’t understand or particularly seem to care about it.

This particular act of pernicious control-freakery of the European wing of the inverted pyramid of globalist nonsense seems to be motivated ostensibly by a fear about vaccine nationalism within the EU. But if you peel a few layers back, it’s just the same old ancient human story about the need to try and control the controllable and the fear of our inevitable individual demise that, sadly, those most inclined to seek and gain world power seem least able to deal with.

It’s all going to create an enormous, and justifiably furious ,backlash once the ordinary folks who simply accept that we live and then we die start to intuit what these personally insecure loonies are trying to do.

Sigh.

Warren Trees
Warren Trees
12 days ago

Looks like he EU has taken its cue from the current U.S. administration, which labels everything completely opposite of what is actually intended. Like freedom of speech is a threat to democracy.
I am waiting for a new proposal someday soon, “The Second Amendment Protection Bill”, where every licensed firearm is confiscated from every household. It would be in line with “The Affordable Care Act” or the “Inflation Reduction Act”.

Peter Whitehead
Peter Whitehead
11 days ago

What could possibly go wrong!

Mike Michaels
Mike Michaels
11 days ago

We’ve left but they still use our language in their graphics? Living rent free in their heads.

Steve Gwynne
Steve Gwynne
11 days ago
colum Joyce
colum Joyce
12 days ago

A major benefit of Covid has been a reappraisal of the stale and ineffective economic and interventionist orthodoxy of recent decades.
It is interesting that this discussion ignores the obvious target of the Emergency legislation. This is the climate crisis. Neither businesses nor consumers are contributing adequately to achieve to the necessary reductions.
Eventually, a position will be reached where the imposition of business and consumer behavioural change will be required.
As such the vagueness of the drafting is purposeful and agenda driven.
With the new DMA, DSA, and P2B already all in place the appropriation of the power to leverage all means to achieve the climate change goals is visionary, not surprising and increasingly necessary.

Last edited 12 days ago by colum Joyce