The world as we know it today is about to change for the worse because of those pesky Europeans. In order to survive, Europe needs to grow their economies and create wealth. The problem is, they don’t know how.
While the press is full of high-level talks, just like it was when our government bailed out our banks and car companies while leaving citizens adrift to lose their homes and their jobs, the problems in Europe are as much with those whose feet are on the ground, as those with their heads in the clouds.
Just because Europeans wear Gap clothes, eat Big Macs, watch The Avengers and listen to rock music doesn’t mean they are mini Americans who happen to live in our favorite vacation spots. Their ancestors are the ones who stayed home. Our ancestors are the ones who fled religious police, the cops, the government, poverty, starvation, and lack of opportunity. While their ancestors huddled around the castle hoping the lord of the manor would protect them, ours were staking claims to large plots of land and shooting anyone who dropped in unannounced.
Today, that same mentality exists. It is the government’s duty to take care of its people—to provide jobs and a level of social services never seen in this country. Taxes average around 50% of income. Everyone complains bitterly about how little disposable cash they have, but when I suggest they vote for a change in the tax laws, they are aghast. “Who would pay my expenses if I’m out of work?” In Belgium, this has resulted in the most extraordinary determination to nickel and dime everyone for that extra bit of cash. You will get at least a 20% discount on just about anything if you pay cash. Taxi drivers and shopkeepers will do their best to keep your change or up the bill.
The rush to add countries to the EU created a false sense of prosperity. From about 2003 to 2007 the EU added markets, they did not create wealth. Every time a new country came on board, there were more people to buy Irish butter or Danish ham. A friend who worked for the Ministry of Defense of Czech Republic told me that when they joined the EU, every single piece of military equipment, from jets to shoe laces had to be replaced to conform with EU/NATO standards. But when all the new equipment had been purchased, sales stopped.
The EU government does not encourage small business. Farmers in Poland could no longer slaughter their pigs and sell the meat to their neighbors. Now all animals had to go to state sanctioned abattoirs and farmers couldn’t set their own prices for the meat. Products from original EU countries flooded the markets of newer countries with cheaper items such as butter and cheese, again, wiping out many self-sustaining small farmers. But no worries! They could apply for social services from the EU.
The EU government has a department called DG Regions. This is a very interesting group that will give money to economically depressed regions of EU countries (no general funds for the country itself) for development. Here is a perfect opportunity to support emerging businesses for long-term wealth creation. But that’s not what they do. All the projects I researched were temporary make-work projects. Like Ronquières in Hainaut. This is a giant earthwork that hauls barges over locks on the Brussels-Charleroi canal. The project was started when barge traffic on Europe’s waterways was almost gone. Trucks carry goods these days. It took about six years to build and today it’s a tourist attraction.
So far, the European idea of creating wealth is to make everyone pay their taxes. Christine Lagarde, French head of the International Monetary Fund, admonished the rich to pay their taxes so the money can be used to provide money for governments. The result? Capital flight. Tax havens are getting richer by the day. Ingrained in the psyches of rich Greeks, French, Spanish and Italians is the right to keep their money away from their governments.
So then the governments shift their focus to the little guys, taking away pensions, medical care, and government jobs or lowering salaries and raising taxes that can’t be paid because many are out of work. In Spain, half of the young people are unemployed. They are in the streets demanding jobs. But there are no jobs.
In the US, wealth creation means starting companies. New companies create new jobs that didn’t exist before so it’s not just a reshuffling of people and work. California especially is good at this and we have the infrastructure in place to help new companies get off the ground and grow.
With the situation in Europe, they won’t be buying your products in any great quantities and expanding to Europe will probably put you out of business. Once you hire a European, they are yours for life. No way to scrape them off your leg. Only death or huge retirement benefits will convince them to move on.
Meanwhile, Europeans don’t like people who stand out—especially those who stand out due to wealth and fame. They believe in a “work-life balance” that is gained by working 30 hours a week or less. Starting a business is a lot of work with no guarantee of success. Why would anyone do something so stupid? Entrepreneurs are greedy and selfish and make the rest of the Europeans look lazy and dependent.
Since World War II, Europe has built a huge, unsustainable welfare system. While we look down our noses at this, we should remember that we didn’t have crazed Germans running amok in our country. The aftermath of the two 20th century wars and the suffering it caused is engraved deep in the European psyche, even among those who were born afterwards. When asked what the most important contribution the EU has made, the first response is always, “no more wars.”
What they are really saying is that they don’t want the horrific living conditions ordinary folks were subjected to during and after the wars. Ironically, those same devastating social conditions are creeping back, not caused by war but by the desire to keep everyone safe from want.
Meanwhile, all of Europe looks to Germany for salvation. It appears Germany has finally won a war.
Priscilla Burgess is CEO, Co-founder, and Co-inventor of Bellwether Materials, an award-winning, triple-bottom line company that manufactures deep green building insulation made from an agricultural by-product. Before founding Bellwether Materials, she ran her own management consulting business. She has traveled all over the world, asking questions about how people work and from that, has developed several models and many opinions about the best way to grow a flourishing business.
image: Niooru via Flickr cc (some rights reserved)