Stardate 20021008.0429

(On Screen): I haven't made any secret of my opinion that European policies about support for extremely generous social spending would stifle the European economy through oppressive taxes needed to finance that spending, but I'm now beginning to wonder if that may not happen sooner than later.

The problem is that in addition to all the various national governments which already exist and which won't reduce in size or budget any time soon, Europe is creating an entirely new umbrella government, the EU, which like any government will consume money. As it grows, it's going to need more, and like any government the European Commission and the European Parliament are eventually going to want to start passing measures which call for expenditures of cash by the bucket. (It is the nature of government to spend money.) Where's it going to come from?

You can get as creative as you want about the details, but ultimately it can only come from one of three places. Either taxes get increased, existing spending programs get cut, or you borrow it. (The fourth answer is to run the printing presses and spend new money, but do that for long and you'll destroy your currency.) If it's taxes, it doesn't matter whether it's the EU itself being given taxing authority, or each member nation being responsible for doing the taxing and giving some sort of mandatory bulk payment to the EU, it still amounts to increasing yet again the tax burden on the European economy.

I'm reading about how it's beginning to dawn on the Europeans that there really, truly is a major gap in military power between them and us, and how it's beginning to dawn on them that it actually matters. (Amazing thing, that.) And there's a rising tide of calls for significant increases in defense spending over there. For example, Rumsfeld managed to talk the Europeans into agreeing to put together a NATO rapid reaction force which would, among other things, have the ability of carrying out 200 combat sorties per day. That will require a really significant investment, and one would expect that this will also include ground forces. At the same time, the EU itself wants to create its own military force which is separate from NATO, and not based on troops which have commitments to NATO. All of this is going to cost, and cost plenty. Who's going to pay for it?

Right at the moment, apparently no one is. Javier Solana is the High Representative for the Common Foreign and Security Policy; he's got a really fancy title, but no budget at all. This article describes how his organization, such as it is, has to control costs.

But you've got a process going on now over there to actually try to write a constitution for the European Union, headed by Valéry Giscard d'Estaing, and one of the things he wants to set up immediately is a centralized agency for military procurement to be financed by really large contributions from all the EU's member nations.

The opportunity for abuse in an agency like this is manifest, especially since an agency like this would be useless unless its yearly budget was measured in €billions. He's also calling for substantial increases in defense spending by the EU member states.

Unfortunately, cutting social spending is politically unpalatable, and even the Socialists in Europe are beginning to be nervous about the tax rate, and so they're running deficits. France, Germany, Italy and Portugal are all close to having a 3% deficit rate, which would put them on the in the €uro doghouse. They can't even raise enough revenue to pay for the spending they've already got, and the EU wants even more?

Well, Chris Patten's got an answer: the US should pay for it.

The External Relations Commissioner Chris Patten called on the US to help the EU strengthen its defence and security systems so as to "be taken seriously as international actor" and act as "a counterpart – if not a counterweight – to the US" itself. Speaking in Chicago on Thursday, he said that the "US might do more" to encourage the EU develop a common foreign policy.

Chris Patten said that the EU is still in the very early stages of developing a Common Foreign and Security Policy. "There are reasons why it has taken so long", he said. "We are not one nation, like the US, but a union of separate nations … it is difficult to agree and then to execute a single policy between many countries."

Mr Patten mentioned the EU has made remarkable progress over the past few years, particularly the development of an independent European military capacity, but said Europe cannot hope to match US defence capacity – "nor do I believe we should try", he said. If the EU were to reduce development assistance to devote all money to higher defence spending or "hard security", he said that the world would not become a safer place.

Commissioner Patten nevertheless stressed that Europe needs to be able to make a more credible military contribution. "European governments…have not been willing to devote the budgetary resources to make [the European rapid reaction force] a really credible ambition."

Commissioner Patten said "it may be that the US can maintain her political, military and economic superiority in perpetuity, but history suggests that this is unlikely." He thus sugges