Did you know the EU has given several billion Euros to the Sicilian Mafia over the last few years? Did you know the EU gives billions of Euros every year to keep corrupt Sicilian politicians in power? Did you know it systematically destroys enterprise and commerce? Read on to find out how.
Have you ever watched a chick hatching out of its egg? It takes hours, and the chick periodically collapses quivering from exhaustion. Yet if you try to help the chick by breaking the egg open, it always dies.
For several decades, the EU has been trying to help the poorer areas of Europe with grants from the European Regional Development Fund. There is also the European Social Fund, the Cohesion fund, and many others. The purpose of all of them is to tax the richer areas of Europe and give out grants to the poorer areas, to help them develop economically.
How does the funding work?
Many of these grants are given for a specific project which, if successful, should reimburse their profits to the EU. If the project turns no profit, they do not have to pay back anything. Failure brings no negative consequences at all.
The people running these projects never aim to make them a success, economically. Why would they? They do the fun part, planning how to hire all their friends for each part of the project, thus giving them a helping hand economically. If they are in politics, they can get LOADS of loyal voters that way!
In the absence of any simulation of real-life commerce or micro-economics, the incompetent people are never exposed. They run a money-losing enterprise for life, which never goes bust. Some of them may not even realise what pointless parasites they are.
Some do, of course. The European Regional Development Fund is a favourite of the Mafia here in Sicily, as it is obsessed with “the low carbon economy.” Thanks to this fund, the Mafia has filled parts of Sicily with wind turbines which are not connected to the national grid and have never generated electricity.
So, that’s how EU grants are giving a helping hand to corrupt politicians, economic parasites and organised crime.
All these funds have achieved nothing
As Vox Europ reported several years ago, in a translation of an article originally published by Italian newspaper La Stampa, all the money poured into Sicily has not achieved any improvements whatsoever:
“€700 million to improve the water supply? In 2000, the water supply was “stop-and-flow” for 33% of Sicilian households, now 38.7% have water worries. Incentives to entice off-season tourists? Cost €400 million, enough to buy up an airline. And yet the ranks of those thankless tourists haven’t swelled, but petered out: from 1.2% in 2000 to 1.1% in 2007. And as to the €300 million invested in alternative energy projects great and small: it’s true, there isn’t a single hillock without its windmill now, but Sicilian output is stuck at 5% of total consumption, as against an average 9.1% for Southern Italy as a whole.”
“And so on and so forth, including a mountainous €230 million spent on railway improvements – used to overhaul a mousy 8 km of the grid. Too bad for all those Sicilians who, to traverse 400 km between Palermo and Messina, have to take a 4½-hour ride on a single track railway, not counting unforseeable stopovers.”
“Moving right along, it turns out that €300 million has been sprinkled on budding integrated waste management schemes in cities that are still wading through nightmarish mounds of rubbish. The funds earmarked for the construction of 260 dumps and 64 recyling centres and waste-processing plants have failed to raise Sicily above the 6% recycling mark, though the target was 35%.”
If you want proof of how effective Sicilian waste management is, here’s a photo my my town. I live in Western Sicily, near Palermo. When the bin men fill their two lorries with rubbish, they have to drive it to CATANIA, the other side of the island, to dump it in Sicily’s only landfill site that is not yet completely full. How environmentally friendly!
The more economically astute among you may have noticed that this reallocation of wealth is communist economics. It is exactly what Soviet Russia was doing with all those five-year plans we used to joke about in the eighties. They took money from the industries that were doing well, and gave it to the ones that were doing badly, and they took money from rich regions and gave it to the poorer ones, to “help” them develop. Just like the EU. It didn’t work in the USSR, and it doesn’t work in the EU.
China used to do the same thing. Look what improvements the Chinese economy has achieved, since the reductions in state “help” and the liberalisation of agriculture and industry.
Why does all this help fail?
Did China or Russia, in the old days, ever stop to ask why some industries, or some regions, were doing badly? There are always sound reasons for economic failure. The definition of a good entrepreneur is someone who can diagnose them, and fix the problems.
In economically successful EU regions, bad company directors run their businesses into the ground and lose their job or go bankrupt. This clears the way for good managers. In EU regions designated for economic development, bad managers get grants which hide the fact they are bad managers, and enable them limp on.
The opportunity cost of this is immeasurable
Let me give you an example. I live in a Sicilian town with a museum of art by Renato Guttuso, whom art fans will know is Sicily’s most famous artist. The rest of the town is full of baroque villas and churches. It is a place of equal or greater historical interest than Sicily’s highly touristy towns, Cefalù and Taormina.
The restaurants, shops and cafés could be packed with customers. The hotels could be fully booked, and new ones could open. All these well-off local business owners would spend their money buying new cars, getting their hair done more often, having their houses refurbished, giving their kids private tuition after school, and so on. Everyone in town would become richer.
But no! Because the director of the Renato Guttuso museum thinks it is alright to have no website, no advertising, and almost no visitors. They get 13 visitors on average, per day.
The way forward
If exposed to normal market forces, the director would have failed and been replaced with someone competent. But here in Sicily, the EU wants to help. The EU doesn’t want the incompetent to meet their downfall. The EU doesn’t want people to learn from their commercial mistakes.
The poor regions of Europe will never grow economically until the EU stops “helping” them, stops pulling the egg shell away. The economy needs to struggle to life naturally. Only when the incompetent and the corrupt run out of easy money, and meet their downfall, will the true entrepreneurs be able to take their places.
Only then will Sicily start to develop economically.