Transcription
A crackup is coming in Europe. What does this mean for our security?
[Music]
Hello, I'm Steve Forbes and this is what's ahead, where you get the insights you need to better navigate these turbulent times.
In a remarkable speech delivered to the National Assembly before it voted to overthrow his government, French Premier Franis Beeru declared that while members have the power to change governments because they don't want to face difficult financial problems, quote, "You do not have the power to wipe away reality. The reality is still there." End quote.
The outgoing French premier was right about France's ugly reality. A reality, by the way, true for most of Europe as well. The continent and also Britain are facing a profound crisis and malaise of a kind that is unprecedented since World War II.
Europe's established parties have failed to deliver dynamic economies where entrepreneurship can flourish and people feel they have the opportunity to rise up. Individual aspirations and indeed the culture have been suffocated by massive and ultimately unaffordable welfare states and extensive regulations that deaden initiative. The corruption of education by acidic far-left ideas is even worse than what we experienced in the US. There's no real faith in a better future. Just go and get what you can now. Smothering rules and procedures make a dynamic high-tech sector impossible. Israel, with a population of 9 million, is a bigger factor in high-tech than the European Union with a population of over 440 million people.
With few exceptions, like Poland, European governments piled on growth taxation. Some did reduce corporate taxes, but smothered those incentives with higher levies elsewhere. Payroll taxes are killers, far higher than in the US, where the rate is 15.3% and that applies only up to a certain level of income. Amazingly, in France, by contrast, the rate can go over 60%. The value added tax, a form of a super sales tax, averages almost 22% in the European Union. The average sales tax in the US is around 5%.
Like lemmings, governments went all in on vastly expensive so-called renewable energy programs that substantially raised energy costs and ignored the actual environmental harm these sources inflict. The intellectual bankruptcy of Europe's political class is astounding as it ignored the wishes of its voters. Massive immigration is a prime example. Most people there don't want it. Yet, governments still do little about it. In fact, the political elites seem to have lost faith in traditional Western values. Effective assimilation programs for immigrants have been virtually non-existent. Police do not even enforce the law in various areas.
Government debt in most countries has exploded. Now with the security threat of Russia and US pressure, defense budgets are rising. But where is the money to come from? Europe's status quo is now untenable with stagnant, overtaxed, overregulated, and demoralized economies. Far-left and far-right parties are rising up on a scale not seen since the years before World War II. Most of them share anti-American sentiments. Putin is licking his chops.
The crackup could be precipitated by a severe financial crisis coming from certain governments like France no longer able to sell its bonds. The possible unraveling of Europe is dreadful for our own future security. Two world wars attest to the need for a healthy democratic Europe.
I'm Steve Forbes. Thanks for listening. Do send in your comments and suggestions. I look forward to being with you soon again.