Belgium Must Be Hopeless if Politicians from Brussels Are Criticizing Germany for Being too Capitalistic

Daniel J. Mitchell
Posted: Mar 23, 2013 12:01 AM

I’m not a big fan of the German government. Angela Merkel has a disturbing desire to impose fiscal and political union on the European continent. And even the supposedly free market Free Democratic Party seems perfectly comfortable with a gradual descent into statism.

No wonder I mocked the Washington Post for labeling Germany a “fiscally conservative” nation.

But everything’s relative in the world of public policy. Compared to some basket cases in Europe, Germany is a laissez-faire paradise.

Here’s a fascinating report from an English-language news site in Europe.

Two Belgian government ministers have complained…that..Belgian companies are facing unfair competition. The two Belgian cabinet ministers were in Hannover (Germany) on Monday. They decided on their visit after often hearing in Belgium that it was cheaper to get Belgian cattle processed in Germany than at home.

So what is the unfair competition from Germany? Are there special tariffs or trade barriers that are artificially raising costs on Belgian products?

Nope, the Belgians are complaining that Germany doesn’t have a minimum wage and that regulations are not sufficiently onerous. Oh, the horror.

The Belgian ministers say that the most striking thing is that this can happen legally because there is no general minimum wage in Germany: “The company is not violating any regulations, because there are no regulations and that must stop” Mr Vande Lanotte told the VRT. The Belgians insist Belgian companies are the subject of unfair competition. Economy Minister Vande Lanotte says that in principle everybody should be treated in the same way: “Belgian companies cannot compete with their German competitors and this has ramifications.”

Gasp, there “are no regulations.” What sort of vicious dog-eat-dog system are the Germans running?!?

The answer, of course, is that Germany has lots of red tape.

More statist than France?!?

But apparently not as much intervention as Belgium. And you’ll notice that the “principle” that “everybody should be treated the same way” is really a stalking horse for the argument that there should be regulatory harmonization.

But the harmonization always means that everyone has to impose more onerous rules. Belgium doesn’t harmonize with Germany’s comparatively market-oriented policy. Instead, Germany is supposed to harmonize with the more statist and interventionist model of the Belgians.

In this sense, regulatory harmonization is like tax harmonization. It always means a heavier burden of government, not a lighter burden. Low-tax jurisdictions are badgered and harassed to make their tax systems worse so that fiscal hell-holes such as France don’t face “unfair competition.”

In an ideal world, the Germans would tell the Belgians to go jump in a lake.

But thanks to the never-ending pressure for regulation, harmonization, and centralization in Europe, it’s not that simple. The Brussels bureaucrats may decide to force Germany to adopt bad policy.

Mr Vande Lanotte intends to raise the issue of the absence of a minimum wage in many German sectors with the European Commission.

P.S. Germany also is better than the United States, at least on the issue of minimum wage mandates. Germany doesn’t have a minimum wage law. Obama, meanwhile, wants to saw off the bottom rungs of the economic ladder by pushing the U.S. minimum wage requirement even higher.

P.P.S. This story helps to explain why I want Belgium to split apart. If it became two nations, one Dutch and one French, I suspect we’d get better policy because they would then compete with each other instead of nagging Germany to become more statist.