All posts by Ferghane Azihari

An EU Army Won’t Make Europe Safe

Growing distrust between Europe and the US government has led European governments to renew their commitment to building an autonomous and common defense policy. The idea of building a European military is as old as the idea of European integration itself. But in 1954, France refused to vote in favor of the European Defense Community project it initiated.

This is why the idea of European defense had been abandoned until 1992. The Treaty of Maastricht has created a “Common Foreign and Security Policy” to help Europe to build its own military. But this project is no longer necessary to keep Europe secure.

Read the rest at: Foundation for Economic Education

Theresa May Should Expect Brexit Talks To Fail

In an address to the German parliament on April 27, Chancellor Angela Merkel had tough words for the British government. The European Union’s most powerful leader told the Bundestag that the United Kingdom, “cannot and will not have the same rights” after it leaves the union. In other words, the British government should expect European leaders to refuse to negotiate and grant total access to the European market.

These words have been harshly criticized by British Prime Minister Theresa May, who accused the EU of “lining up” to oppose the United Kingdom. While one may disagree with the punitive attitude of European leaders, May’s naivety is to be deplored: The European Union’s behavior was predictable.

Continue reading in the Eurasia Review

The Upcoming Clash of Civilizations: After French Elections, Saving The Liberal Order From New Authoritarianism

Long regarded as the guardians of the international liberal order, developed countries are now submerged in authoritarian ideologies. The first major country to be hit by this authoritarian wave is the United States, whose president was elected on a radical nationalist and protectionist discourse. France is probably the next country on the list. Even if Marine Le Pen is not elected, the far-right National Front Party has already won the cultural battle, leading mainstream parties to radicalize their stances on social, economic, and security issues. Right-wing authoritarianism is moreover challenged by radical left leader Jean-Luc Mélenchon’s Marxist rhetoric. If we add up the total votes for the far-left and the far-right during the first round of the presidential election, these are at least 40 percent of French voters who have praised authoritarian agendas.

Continue reading at TownHall

There’s No Such Thing As Corporate Tax

The EU reaffirmed its commitment to fighting corporate tax avoidance through a statement by European Commissioner Pierre Moscovici. This should come as no surprise following recent financial scandals exposed through the Panama Papers and Luxleaks, and the ensuing international outrage towards corporations “not paying their fair share”. Yet, the push for higher corporate taxes disproportionately also affects ordinary citizens by increasing their tax burden.

Corporate tax avoidance is regularly said to be unfair to other taxpayers. Indeed, proponents of higher corporate taxes accuse multinational companies of de facto increasing ordinary citizens’ tax burden because these ones would be forced to compensate states’ budget shortfalls.

However, this artificial opposition between corporate and public interests is dishonest. When one argues corporations don’t pay taxes, the implication is that shareholders, workers and consumers are not taxed at all, which is completely untrue. All these people are taxed in various ways, including income tax and valued-added tax, among other costs imposed by national governments. The only purpose of this distinction is to push ordinary citizens to support higher corporate taxes without allowing them to realise they are the ones who are going to pay the bill.

In fact, a corporation is a legal fiction which aims to reduce transaction costs between physical stakeholders, which are shareholders, workers and consumers. Consequently, every fiscal cost imposed on corporations will necessarily be paid by these people. Therefore, as corporate taxes increase, shareholders’ dividends and workers’ salaries will decrease, while consumers will be forced to pay more for their purchases.

Read more at the The Daily Caller 

Free Trade Doesn’t Depend On Multilateralism

For the first time since the end of the Second World War, multilateral institutions are losing their influence regarding open trade.

The World Trade Organization (WTO) has gone into hibernation after the failure of the Doha Round, and the European Union (EU) — long regarded as a pro-trade force — is facing its own local protectionist pressures. The EU’s difficulties in ratifying the Comprehensive Economic and Trade Agreement (CETA) with Canada, and even Brussels’ recent attempt to restrict the free movement of labor to satisfy Western Europe’s protectionist claims against Eastern Europe, show how the EU trade agenda is challenged.

Moreover, in the United-States, the election of Donald Trump marks the beginning of a new protectionist era. Trump considers both the Trans-Pacific Partnership (TPP) and The Transatlantic Trade and Investment Partnership (TTIP) as contrary to America’s interests. He asked for a renegotiation of NAFTA and even mentioned the possibility of withdrawing from the WTO.

The recent nomination of Peter Navarro, an economist well-known for his hostility against China’s growing commercial influence, as head of the newly created National Trade Council confirms the will of the new administration to engage in a new “trade war” — reflecting the old mercantilist bias that views international trade as a zero-sum game.

Continue reading at FEE.