Czech President Klaus on renewable energy, Europe and the welfare state

Klaus on the "profits" from renewable energy: This profit is not an outcome of those energy sources, but an outcome of government subsidies that are paid by taxpayers through high taxes and by consumers through high prices of energy, food and other commodities. The environmental impact is not positive either, even though everything was done supposedly for the sake of the environment. Hundreds of billions of euros, dollars and Czech crowns have been thrown away, not out of the window, but into the pockets of groups and movements that look “idealistic” on the surface, or into the pockets of those who profit from their activities.

Czech President Vaclav Klaus, who is soon to leave office after two terms, has for the last time spoken on the country's National Day to the Czech people and the diplomatic corps in Prague. As always, also these two addresses were out of the ordinary, containing the kind of wisdom that - sadly - is not to be found in the speeches of any of the other European heads of state or government (or for that matter anywhere else, for the time being):

Over the almost ten years that I have been the President of the Czech Republic I have been given to sign dozens if not hundreds of Bills that inevitably led to increasing our indebtedness and the power of institutions of all kinds. I have returned only a small part of those Bills back to the Chamber of Deputies for renegotiation, usually without any effect.

This was true both of the left-wing governments and of the governments with a prevalence of parties that were, or considered themselves to be, centre-right. The already excessive number of Acts, orders and regulations that harness our lives demotivates us and restricts our freedom. Besides, it does not express the true will of voters. The media help to promote the interests of small, yet powerful and often internationally interconnected pressure and lobby groups hiding under the banner of non-government organisations that have different names. An exemplary illustration of their success is what has been going on with the so called renewable sources of energy, when our legislation made it possible for those who had a better grasp of it than others or for those who may have even had the legislation tailor-made to their needs to gain unjustifiable profit.

This profit is not an outcome of those energy sources, but an outcome of government subsidies that are paid by taxpayers through high taxes and by consumers through high prices of energy, food and other commodities. The environmental impact is not positive either, even though everything was done supposedly for the sake of the environment. Hundreds of billions of euros, dollars and Czech crowns have been thrown away, not out of the window, but into the pockets of groups and movements that look “idealistic” on the surface, or into the pockets of those who profit from their activities.

Although austerity measures have recently been debated in our country almost on a daily basis, our debt still continues to increase. We cannot but clean up public finance and reduce the overall cost of the operation of the state at all levels and also curb our complex and expensive public administration. There are examples of best practice to draw on. When I received the President of the Slovenian Parliament here at the Prague Castle at the beginning of October, he told me that their newly formed government had reduced the number of Ministries from 19 to 12. Let’s attempt at something similar.

Even though it is politically extremely difficult, our welfare system needs to get back to realistic dimensions. This means to limit government mandatory expenditures predetermined by law, that is the money that merely passes through the budget without any government decision-making. Contemplating higher corporate and individual tax as a source of financing the mandatory expenditures is ineffective and it only makes the economic and financial problems deeper.

In his speech to the Czech people, Klaus had this to say about the "Nobel laureates" in Brussels - and the IPCC:

We must not be led to believe that somewhere far beyond the borders of our country there are thousands of eager supranational civil servants and politicians who think about nothing else but how to help us to be better-off, more fortunate and more carefree. We will not have anything save for the things we do ourselves, that we take care of, that we negotiate or fight for with a reasonable degree of confidence. We should wait neither for a modern Messiah nor for the European funds.

We must not be led to believe that our domestic policy is so bad that various non-democratic movements, civil “appeals” or “enlightened individuals” have to come to lead and govern our country. It is not possible without democratic politics.

In his speech to the foreign ambassadors, Klaus's message was clear:

I wish to see Europe as a community of democratic states. States which cooperate with each other, without any hegemon among them or above them. That is why I wish the countries to remain basic entities of our lives, retaining their governments with executive power and parliaments with legislative power, elected by their citizens and accountable to them. That is why I wish European integration to develop on intergovernmental basis in the direction which is and will be initiated and agreed upon by the states participating in it. The current European crisis should be seen as an opportunity for a fundamental systemic change of the European integration model on the one hand and of the European overregulated and paternalistic social and economic system on the other.

It will be a great loss to the Czech people, and free people everywhere, when Klaus leaves office. However, it is reassuring to know that he will continue to speak out about the most important issues in other fora.  

Václav Klaus: The arrogance of the global-warming alarmists is appalling

President Václav Klaus has again spoken words of wisdom on global warming. Here is an extract of his speech at the International Seminar on Planetary Emergencies, organized by the World Federation of Scientists in Erice, Sicily on 20 August 2012:

As someone who personally experienced central planning and attempts to organize the whole of society from one place, I feel obliged to warn against the arguments and ambitions of the believers in the global warming doctrine. Their arguments and ambitions are very similar to those we used to live with decades ago under Communism. The arrogance with which the global-warming alarmists and their fellow-travellers in politics and the media present their views is appalling. They want to suppress the market, they want to control the whole of society, they want to dictate prices (directly or indirectly by means of various interventions, including taxes), they want to “use” the market. I agree with Ray Evans that we experience the “Orwellian use of the words ‘market’ and ‘price’ to persuade people to accept a control over their lives”[8]. All the standard economic arguments against such attempts should be repeated. It is our duty to do it.

To conclude, I agree with many serious climatologists who say that the warming we may expect will be very small. I agree with Bob Carter and other scientists that it is difficult “to prove that the human effect on the climate can be measured” because “this effect is lost in the variability of natural climate changes”[9]. Provided that there are no irrational attempts to mitigate the human effect on global temperature, the economic losses connected with the warming we may expect will be very small. The loss generated as a result of the completely useless fight against global warming would be far greater.

Read the entire speech here

Václav Klaus on the European Union

Czech President Václav Klaus, the most original thinker among today´s European leaders, last week gave a speech at Institute “Libertad y Desarrollo” in  Santiago de Chile, which deserves to be cited almost in its entirety:

In the 1950s, the leading idea behind the European integration was to liberalize, to open-up, to remove all kinds of barriers which existed at the borders of individual countries, to enable free movement of not only goods and services but also of people and ideas across the European continent. It was a positive concept and helped Europe significantly, even though it is difficult to express it quantitatively.

It changed during the 1980s and the decisive breakthrough came with the Maastricht Treaty in December 1991. Political interests to unify Europe and to create a new superpower started to dominate. Integration had turned into unification, liberalization into centralization of decision making, into harmonization of rules and legislation, into the strengthening of European institutions at the expense of institutions in the member states, into the enormous growth of democratic deficit, into post-democracy. Europe’s constituting elements, the states, have been consistently, systematically and “successfully” undermined. It was forgotten that “the state” is the only institution where real democracy is possible.

The Czech Republic, an EU-member since May 2004, wanted to reassume its place among European democracies and the EU membership was the only way to show that it was accepted. There is no other method to do it in Europe these days. Nothing else legitimizes a country. We did not want to stay aside, as we were forced to throughout the communist era. However, for those of us who spent most of their lives in the very authoritative, oppressive and non-functioning communist regime, the undergoing weakening of democracy and of free markets on the European continent represents something we did not expect and did not wish for in the moment of the fall of communism[1].

We witness a gradual shift from liberalizing and removing all kinds of barriers towards a massive introduction of regulation and harmonization from above, towards the ever-expanding, overgenerous welfare system, towards new and more sophisticated forms of protectionism, towards the continuously growing legal and regulatory burdens on business, etc. All that weakens and restrains freedom, democracy and democratic accountability, not to speak about economic efficiency, entrepreneurship and competitiveness.

The most visible European problem of the current era is the fate of the European monetary union. The eurozone project has not succeeded in delivering the positive effects that had been – rightly or wrongly – expected from it. It should help to accelerate economic growth and reduce inflation and, in particular, protect the member states against all kinds of external economic disruptions (the so-called exogenous shocks). This has not materialized. After the establishment of the eurozone, the economic growth of its member states had slowed down compared to the previous decades, thus increasing the gap between the rate of growth in the eurozone countries and that in other major economies, including Latin America. The internal disequilibria – such as trade imbalances or state budget imbalances – became bigger, not smaller.
People like me understood very early that the idea of the European single currency is very problematic, that it will create huge economic problems and will lead to undemocratic centralization of Europe. To my great regret, it did happen.

The eurozone, which comprises 17 European countries, is not an “optimum currency area” as defined by the economic theory. During its first 10 years of existence, it has not led to any measurable homogenization of its member states’ economies. In such a situation, it is inevitable that the costs of establishing and maintaining it exceed its benefits.
My choice of the words “establishing” and “maintaining” is not accidental. Most economic commentators were satisfied by the ease and apparent inexpensiveness of the first step (the establishment of the common monetary area). This helped to form the impression that everything was fine with this project.
Over the last decade, the negative effects of the “straight-jacket” of the single currency have become more and more visible. When “good weather” (in the economic sense of the word) prevailed, no visible problems arose. Once the crisis (or “bad weather”) arrived, the lack of homogeneity manifested itself very clearly. However, the Euro will not collapse, because huge amount of political capital had been invested in its existence. It will continue to exist, but at a very high price which will be seen in large-scale fiscal transfers and in low rates of economic growth in the future.

The second reason for the European economic problem is the quality, productiveness and efficiency of its economic and social system. A seemingly friendly and non-demanding, excessively paternalistic and, as a consequence, not sufficiently productive economic and social system, called “die soziale Markwirtschaft” (or social-democratism), dominates in Europe. This system with its generous social benefits weakened motivation, shortened working hours and life employment, prolonged years of studying, diminished the supply of labour (both at macrolevel and structurally), created bottlenecks and shortages.
Europeans prefer leisure to performance, security to risk-taking, paternalism to free markets, collectivism (group entitlements) to individualism. They have always been more risk-averse than Americans but the difference continues to grow. Also freedom seems to have a very low priority there. It seems that Europeans are not interested in capitalism and free markets and that they do not understand that their today’s behavior undermines the very institutions that made their past success possible. They are eager to very intensively defend their non-economic freedoms, or better to say the easiness, looseness, laxity and permissiveness of modern, or perhaps post-modern European society, but when it comes to their economic freedoms, they are quite indifferent.

The inefficiency and unsustainability of this system was later “reinforced” by the gradual acceptance of green ideology, of environmentalism. This process started in the 1970s, but reached its peak, and its economic devastating effects now, in the era of global warming (or climate change) alarmism. I will not go into detail, but I want at least to mention my book “Planeta Azul (No Verde)” which has been published already in 17 foreign languages, and is available also in  Spanish.
I am confident that you, in Latin America, will not repeat our mistakes. I hope you will aim at creating maximum openness inside the continent, but will keep respecting national sovereignty of individual countries and will – in my terminology – promote economic liberalization, not political unification. I wish you every success in this endeavour.

Read the entire speech here.

PS
There is little to disagree with, except that I think that the collapse of the euro is a real possiblity. In spite of the enormous amount of political capital invested in it, there is a limit - which is coming closer - when the politicians must bow to reality, if they want to survive politically.