Big Government leads to
Serfdom an
d Poverty

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   Update 09-07-2008

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The best Social Program is a Job ( R. Reagan )

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An analysis by Petr Mach
petr  mach
Petr Mach is executive director of
the Prague Center for Economics and Politics
and an advisor to Czech President Vaclav Klaus

Lisbon Treaty :  Lies, Fraud and Deceit

The text most governments introduced to their Parliaments is NOT the same as the final version of the Treaty. Governments sold a pig in a poke. Peter Mach discovered a seemingly inconspicuous sentence in the middle of the final consolidated version enabling the EU Council of Ministers to adopt directives on minimum rates for taxes and excise duties when national rates distort competition. The sentence gives a fatal blow to the sovereignty of member states in the most crucial field of fiscal matters. This was not approved as such by Parliament. The  fraud exposes what this treaty really is about: disabling Tax Competition and transforming the European continent  in a huge HIGH TAX CARTEL from which no escape is possible.

How to read the Lisbon Treaty

If one wants to learn what the Lisbon Treaty is really about, reading the treaty itself is insufficient. Reading consolidated version of the current treaties (where amendments of the Lisbon Treaty are incorporated) is also insufficient.

One must compare individual articles of the Lisbon Treaty with individual articles of the current treaties. The Czech government (similarly as governments in other EU member states) did not introduce to the parliament the consolidated version of the Treaty with specifying what was dropped and what was added as it is common with ordinary bills. Thus the government is in fact selling a pig in a poke.

Let’s show an example. Paragraph 79 on page C306/70 of the Lisbon Treaty says:

"At the end of Article 93, the words within the time limit laid down in Article 14 shall be replaced by and to avoid distortion of competition."

Seemingly inconspicuous sentences
Seemingly an innocent sentence. Something about avoiding distortion of competition. After all – who would object to avoiding distortion of competition!? But-First we must understand that the above mentioned article 93 is that of the Treaty establishing the European Community which says:

"The Council shall, acting unanimously on a proposal from the Commission ...adopt provisions for the harmonisation of legislation concerning turnover taxes, excise duties and other forms of indirect taxation to the extent that such harmonisation is necessary to ensure the establishment and the functioning of the internal market within the time limit laid down in Article 14."

Thus a seemingly inconspicuous sentence somewhere in the middle of the Lisbon Treaty abolishes the time limit within which the EU can harmonize indirect taxes, which as we could see in the article 14 has expired! The new sentence would also enable the Council of Ministers to adopt directives on minimum rates of taxes and excise duties upon a claim that the current rates distort competition.

If the Lisbon treaty is ratified one should not wonder when the Commission proposes, say, increases in minimum VAT rate from 15 to 19 (currently basic rate in Germany or France) pointing that British 16 or Luxembourg 15 per cent represent "harmful tax competition" and "distort competition" in the single market.

Shall we then solace ourselves at least by the fact that the EU needs unanimity in the Council of Finance ministers in order to adopt such a directive? Precociously. Another series of inconspicuous paragraphs in the Lisbon Treaty enables shifting taxation from unanimity to majority voting.

The end of fiscal Autonomy

The Lisbon Treaty (on page C306/43) says, that in the article 93 the words "acting unanimously on a proposal from the Commission" shall be replaced by "acting unanimously in accordance with a special legislative procedure" and then (on page C306/39): "Where the Treaty on the Functioning of the European Union provides for legislative acts to be adopted by the Council in accordance with a special legislative procedure, the European Council may adopt a decision allowing for the adoption of such acts in accordance with the ordinary legislative procedure." Keep on mind that the words "ordinary legislative procedure" in the Lisbon Treaty mean majority voting while the "special legislative procedure" means unanimity.

Can we then at least believe that our prime minister will never agree to a proposal that would shift taxes from unanimity to majority voting? Hardly. In comparison with signing the whole Lisbon treaty, which enables all this, a single voting in the European Council is a bagatelle. A Prime Minister who easily signs the Lisbon Treaty can - one late night of a Council summit - even more comfortingly support a proposal like "decisions according article 93 (113) shall be adopted in accordance with the ordinary legislative procedure".

Purpose of this article is not to describe all the changes included in the Lisbon Treaty. We have just shown a small example whereas the Lisbon Treaty is full of similar "innocent" provisions.

For how long can Europe continue
to ignore the Voice of the People ?

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All Europeans want a Referendum before
giving up more of their Sovereignty

POLL QUESTION :  If a new treaty is drawn up which gives more powers to the EU
do you think that people should be given a say on this in a referendum
or citizen consultation or do you think that
it should just be up to the national parliament to ratify this treaty?

The Road to Serfdom. This masterpiece of Nobel Prize laureate Friedrich Hayek is an eye-opener, strongly advocating the free market principles. In this all-time classic Hayek persuasively warns against the authoritarian utopias of central planning and the welfare state. Fascism, communism and socialism share these utopias. For the implementation of their plans these authoritarian ideologies require government power over the individual, inevitably leading to a totalitarian state. Every step away from the free market toward planning reduces people's freedom and is a step toward tyranny. Planning also cannot assess consumer preferences with sufficient accuracy to efficiently co-ordinate production. However in a free market, "Price" is the all-inclusive source of information, guiding entrepreneurs to produce whatever is wanted and directing workers wherever they are most needed. Free markets also provide the entrepreneurial climate for a thriving economy and for releasing the creative energy of its citizens. Free individuals in their native strive to develop their talents and to improve their fate produce spontaneous progress. All public interference in the economic process disturbs the market equilibrium, distorts the optimal allocation of resources and consequently reduces the level of wealth. Where planning replaces free markets people do not only loose their freedom and individuality. Resulting slow growth also increases welfare demands causing dependence similar to slavery. In the end people's self-reliance and self-respect is ruined, and citizens are degraded to a means to serve the ends of the collective mass. road-to-serfdom
  Free condensed pdf
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More Books of
Friedrich Hayek here
  • The Tragedy of the commons  by  Garrett Hardin   Free access and unrestricted demand for a finite resource ultimately dooms the resource through over-exploitation. This occurs because the benefits of exploitation accrue to individuals, each of which is motivated to maximise his or her own use of the resource, while the costs of exploitation are distributed between all those to whom the resource is available (which may be a wider class of individuals than those who are exploiting it). The theory itself is as old as Aristotle who said: "That which is common to the greatest number has the least care bestowed upon it.      more here

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