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More Europe? Less Europe? A More Free Europe! Juan Pina PRESIDENT, SPAIN’S INDIVIDUAL FREEDOM PARTY (P-LIB) Madrid, June 17th, 2013 Libertad es prosperidad. 1. How did we get here? This crisis is just the result of European (and Spanish) trans-party social democracy. The wrong and unsustainable social democratic consensus is to blame, although most people refuse to see this and wish for an even larger bubble to swallow its ruins. More Europe? Less Europe? A More Free Europe! This crisis is the result of trans-party social democracy For the past 60 years, the socialists in all parties have established a transparty social democracy in Europe. Pushed by politicians, central banks followed Keynesian policies aimed at full intervention of the economy. By manipulating interest rates and by keeping a controlled, closed and state-privileged financial system, central banks made investment grow far beyond the existing saving. More Europe? Less Europe? A More Free Europe! This crisis is the result of trans-party social democracy Too much and too easy credit gave birth to an artificial economic boom, and people were misled to take it for true prosperity. Many investments fostered by the loan frenzy were just unworthy. But in fact, all investment not backed up by saving worsens the cycle. Therefore, this crisis is just the outcome of wrong monetary policies driven by technical and political fatal conceit. More Europe? Less Europe? A More Free Europe! This crisis is the result of trans-party social democracy Six years into the crisis, Spain continues to be particularly hit by the grave mistakes made by Aznar, Zapatero and Rajoy alike. Everyone is to blame: • • • Frankfurt — ECB Brussels — EU Madrid — Government And both large parties, as they are equally Keynesian and social-democratic. Rajoy’s taxation and interventionism so far beats the socialists’. More Europe? Less Europe? A More Free Europe! This crisis is the result of trans-party social democracy The first industry hit by the crisis was the banking industry, because it had lent too much, and often with a high risk. Then the industrial sector was also hit, as it needed to settle huge debts and get rid of malinvestments. This boosted our traditionally high unemployment rates even further, up to the current disaster. More Europe? Less Europe? A More Free Europe! This crisis is the result of trans-party social democracy And finally, the public sector fell itself into crisis as it tried to rescue large companies and especially banks, while also maintaining a huge public expenditure, which had been inflated by the tax money flow during the bubble years. Bubbles can’t be extended, elongated and overinflated once and again. They eventually explode. More Europe? Less Europe? A More Free Europe! This crisis is the result of trans-party social democracy Spain as a country and Spaniards individually did live in an artificial economy for decades. We grasshoppers often disregarded any austerity suggestion from the Central and Northern European ants who were actually funding us. We spent too much and too unwisely while we received enormous transfers of other European taxpayers’ money, as well as easy, cheap loans. Spain saw this coming, but our politicians just kept inflating their bubble and kicking the ball further. More Europe? Less Europe? A More Free Europe! This crisis is the result of trans-party social democracy This crisis serves us all well: our politicians, for doing it; and the rest of us, for not resisting social-democracy. But it is unfair to our young: homeless, jobless, future-less. Brainwashed since childhood to believe free services were a right, they now feel robbed. And because thinking hurts... …very few get it right: the promises were false because the premises were untrue: the system was UNSUSTAINABLE. “homeless, jobless, future-less... fearless” More Europe? Less Europe? A More Free Europe! This crisis is the result of trans-party social democracy The young are right to be angry, outraged (“indignados”). But they have been misled into blaming the wrong villains... ...and into demanding even more of the same: • • • • • More “rights” (services) for free, and therefore more of other people’s tax money —or in fact, more debt. More public sector and public banks (yes, the ones that actually went bankrupt in Spain!) More easy loans for anyone. More regulation of finance and the rest of the economy. MORE SOCIAL-DEMOCRACY “Eat the rich” More Europe? Less Europe? A More Free Europe! 2. How to get out of the maze No long-lasting solution can be engineered within trans-party, Welfare State social democracy. A paradigm shift needs to be induced onto our society: Collective >> Individual Coerced >> Voluntary State-run >> Privately held More Europe? Less Europe? A More Free Europe! Out of the crisis >> out of social democracy We classic liberals / libertarians believe that banks and any other corporations in trouble should be rescued by their own shareholders and creditors, NEVER by taxpayers. Therefore, we stand for the enactment of strong legal (or even constitutional) provisions to drastically prohibit any future bailing out of banks or any other kind of businesses, no matter how large. More Europe? Less Europe? A More Free Europe! Out of the crisis >> out of social democracy Bank privileges need to disappear. Central bank funding of commercial banks under special conditions and rates should be terminated. Deposit Guarantee Funds should be dismantled. Central banks should be shut down, and compulsory currency abolished. Free emission should be legal, with an initial return to the gold standard. More Europe? Less Europe? A More Free Europe! Out of the crisis >> out of social democracy Simultaneously, we believe the new phenomenon of decentralized, peer-to-peer currencies deserves encouragement and a close study of its development. With all due PRUDENCE, bitcoin or a similar currency might provide an alternative to the centralized control of the money supply by any issuer (public or private), as tampering with the amount of units is fully avoided by the P2P technology used. More Europe? Less Europe? A More Free Europe! Out of the crisis >> out of social democracy Unemployment is partly due to minimum wages. Currently, only workers producing over 14,000 euros per year can get a job. We promote full wage liberalization. All taxation is a burden, but overtaxing employment with six million unemployed is just suicidal. Drastic cuts are urgent. Collective negotiation shouldn’t be compulsory. Union privileges and state funding must finish now. Union lobbying harms small businesess and independent workers. Spain’s unions: still assaulting the Winter Palace. More Europe? Less Europe? A More Free Europe! Out of the crisis >> out of social democracy The Rajoy administration has increased taxes dramatically. Our Tax Freedom Day is already on the 3rd of July for the average Spaniard, if the employer’s contributions are taken into account. VAT now contributes highly to the average citizen’s unbearable tax effort. Apart from employment taxation, high taxes also apply to petrol and power, while new fees and charges proliferate. We believe that a drastic tax cut is the only sensible economic “stimulus”. Mariano Rajoy’s Spain: 30 tax increases in 16 months! More Europe? Less Europe? A More Free Europe! Out of the crisis >> out of social democracy We reject deficit calculations made on GDP. Our national deficit is not around a mere 7%, but around 25% of the state’s actual, true income. And this is every year! The point is not simply to balance our accounts. It’s no use to do this by increasing taxation on businesses and citizens. Instead, state expenditure should be decimated. But, which expenditure? Although we all want to return all key services to civil society by privatising and liberalising them, these are long term reforms needing a transition. More Europe? Less Europe? A More Free Europe! Out of the crisis >> out of social democracy Privatising healthcare, education or the pension system is of course necessary, but it takes time —and possibly a better economic and social climate. Transitions may start (in fact, the pension transition should begin as soon as possible)… …but the urgent cuts we need are in the state’s own expenses, not necessarily in the bad services the state still provides. We should cut the exaggerate amount of civil servants, and especially over a quarter of a million state employees discretionarily hired by politicians (at all levels: local, regional and national). More Europe? Less Europe? A More Free Europe! Out of the crisis >> out of social democracy We need to auction all state-owned companies, including media corporations, railways, urban transportation, mail, toll motorways, etcetera. A lot of real estate should also be sold. We need to stop subsidizing businesses, including media, and many large companies in bed with the political elite. We should also reduce the cost of our political system, and prohibit subsidies to parties, unions and any other types of civil society entities. More Europe? Less Europe? A More Free Europe! Out of the crisis >> out of social democracy About Europe’s role, we classic liberals / libertarians are in favour of a real free market with fully free circulation of people, capital, goods and services. But we’re euro-critic when it comes to the expensive, unaccountable and often arrogant eurocracy, which is nowadays the guardian of Europe’s choice for trans-party social democracy. More Europe? Less Europe? A More Free Europe! Out of the crisis >> out of social democracy So far the euro and the ECB have been good for Spain in one important way: they have prevented devaluation and inflation. There is no doubt that our politicians would have made an even worse mess if they had controlled monetary policy. But of course, it’s still fiat money. Within the current, un-Austrian economic system, we should support the euro only insofar as it proves to work as a restraint against domestic monetary abuse. More Europe? Less Europe? A More Free Europe! Out of the crisis >> out of social democracy We don’t think the point is more Europe or less Europe, a more united monetary policy or a single European supervision of banking. Forcing all other Europeans to share our losses is unfair. And it may save us today, but then…? The point is to get rid of as much state interference in the economy as possible, and this applies to both the national and European level, and also to all sub-national levels. The historic task ahead is to separate economy and state just like we managed to separate church and state. The point is, in other words… A MORE FREE EUROPE! Out of the crisis >> out of social democracy And for this we need to be as active as ever through think tanks, publishing, media, academia... ...but also in politics! No matter how much we dislike the system, we can’t keep relinquishing the political battlefield to our enemies. Trying to make use of the system’s parties has proved to be a worthless strategy. They won’t be changed from within. We need strongly Austrian, classic liberal / libertarian parties that pursue their goals openly. Fortunately, such parties are being formed all throughout Europe, and we make no compromise on Freedom. Thank-you! Twitter: @partidolibertad Facebook: /partidolibertad E-mail: [email protected] www.p-lib.es You may download the full presentation at: www.p-lib.es/fmrs