Further to my report in October it seems that the luminaries of the Baltic states are still living in cloud cuckoo land.

In Estonia Finance Minister Aiver Sõerd says in today’s Äripäev: “Both, the state as well as private business must continue with the aim to be fully prepared to adopt the euro from the beginning of 2007.” The hectoring tone might be understandable when you remember that the latest opinion polls put opposition to the Euro at 48% and support at 47%. As Matthew Lynn at Bloomberg states:

In Estonia, a poll showed more than half the population opposed euro membership, according to an AFP report last week. And only 38 percent of people in the 10 new countries expect “positive consequences” from the euro, down 6 points from last year, according to a European Commission report last week.

Quite reasonably, many analysts have concluded that eastern European leaders aren’t planning to walk up this particular aisle. “The EU attracted accession states on account of the relative prosperity it enjoyed through the 1990s,” said Stephen Lewis, chief economist at Monument Securities Ltd. in London, in a note to investors. “More recently, the euro zone has, rightly or wrongly, become a byword for economic stagnation. It is not surprising, therefore, that the forward momentum of European integration has been lost.”

This article was written by Martin De Vlieghere, Paul Vreymans and Willy De Wit.

“America’s social model is flawed, but so is France’s,” the Parisian newspaper Le Monde recently wrote. According to Le Monde Europe should adopt the “Scandinavian model,” which is said to combine the economic efficiency of the Anglo-Saxon social model with the welfare state benefits of the continental European ones. On the eve of the EU’s Hampton Court Summit (October 27), one could even read that “Britain might be forced to discuss the advantages of Scandinavian models, which rely on more social security.”

The praise for the Nordic model comes from Bruegel, a new Brussels-based think tank, “whose aim is to contribute to the quality of economic policymaking in Europe.” The think tank is a Franco-German government initiative and is heavily funded by EU governments and corporations. In October Bruegel published a study “Globalisation and the Reform of European Social Models” [pdf] propagating the Nordic model.

Two government-subsidized Brussels organisations, the “intercultural youth platform” Kif Kif and the “movement against racism, anti-Semitism and xenophobia” MRAX, have lodged a complaint before the Belgian judicial authorities against Filip Dewinter, a member of the Flemish regional parliament and one of the leaders of the Flemish-secessionist Vlaams Belang, which is the largest party in Belgium. They demand that Dewinter be convicted for “incitement to racist hatred” and that his party be deprived of its funding. In Belgium, political parties are almost entirely government-funded, as accepting private donations is mostly illegal.

The reason for the complaint is an interview which Dewinter gave to the New York magazine Jewish Week (and which he put on his website). When asked whether he espoused xenophobia, Dewinter replied:

When conversations turn to health care, I am always reminded of my grandfather. He was 91 when he died. He had never been ill. He had never needed medical treatment in his whole life. Upon reaching his nineties, however, he required prostate surgery.

Like all Belgians, my grandfather had paid wage-related contributions to cover health insurance throughout his entire professional life. The Belgian health care system is a so-called pay-as-you-go system. Today’s young and healthy do not set money aside for their own future needs, but are compelled to pay for today’s sick and elderly. As my grandfather had never needed much health care, he had been a net contributor to the system. Now was the first time he was going to claim something back.

EU Observer writes that the EU member states are losing their grip on climate change targets. I find this good news because it will hopefully result in a more appropriate climate change policy from the European countries once they realize that they themselves cannot keep up with the growth impairing standards set in the Kyoto Protocol.

Whether this highly needed policy change will actually occur is doubtful, however. The UN, through its Bonn-based United Nations Climate Change secretariat released a report last week, warning that the western world is losing its grip on the climate change problem because greenhouse gas emissions in many EU states are rising instead of decreasing.

Jurgen Van Acker is 27 years old and severely handicapped. He cannot walk, talk, sit or eat, but mentally there is nothing wrong with him. With the help of his computer he can communicate. Recently he became a television celebrity in Belgium when he asked that the welfare office pay his prostitutes.

When Jurgen turned 18, his mother Frie Van Acker told him all about sex and asked whether he would like to have sex. Jurgen indicated “No.” One evening three years later, however, he wrote on his computer: “I want sex.” That same evening, Frie contacted a prostitute. Every month for the past six years prostitutes have come to the house for Jurgen. They charge 100 euros for half an hour. Jurgen finds one session a month inadequate. He wants sex at least once a week, but his mother cannot pay that much. Jurgen and his Mum are now demanding that the government subsidize the sex sessions, but the Fund for the Social Integration of the Handicapped only finances masturbation equipment, including vibrators and pumps, for the handicapped in Belgium, but not prostitutes.

A strange thing is going on in France. Politicians are positioning themselves for the 2007 presidential elections when the French will have to chose a successor for Jacques Chirac. It is not in the mold of the repulsive and corrupt Chirac, however, that the contenders want to present themselves, but in that of Jean-Marie Le Pen.

I met Le Pen twenty years ago at an international press conference that the Front National leader was giving in Brussels. He made quite an impression. The mainstream media were very hostile to Le Pen (they still are), which made me instinctively sympathise with him. I was about the only conservative journalist in Belgium and because of this I was not very popular with my overwhelmingly liberal colleagues. During the press conference they tried to roast Le Pen, but he roasted them instead.

The European Union could save up to 200,000 lives a year by lifting its ban on most kinds of smokeless tobacco, including the Swedish variety known as snus. It is a form of moist ground tobacco that users place between their lip and gum. By doing so, they are able to fulfill their nicotine addiction because the nicotine is then absorbed into their blood stream.

Findings by Professor Brad Rodu from the University of Alabama at Birmingham and Professor Michael Kunze from the University of Vienna reveal just how harmful the EU ban on smokeless tobacco is. There are as many tobacco users in Sweden as in the rest of Europe. However the consumption of smoking tobacco is far lower than in any other European country. According to Prof. Rodu this is because Swedes have access to healthier alternatives to smoking tobacco.

In looking at the new economic predictions put out by the EU it is important to see how well past predictions have played out. The media has picked up on the predictions as "light at the end of the tunnel" for the struggling European economies:

Europe's economy is accelerating out of its recent trough, according to new forecasts from Brussels, but stubborn inflation and high government borrowing could hasten an early interest rate rise in the eurozone.

Resurgent domestic demand should help to drive growth in the European Union from 1.5 per cent this year to 2.1 per cent in 2006 and 2.4 per cent in 2007, the European Commission said.

Last Thursday the European Parliament voted to implement REACH, a massive new chemical regulations policy. As I wrote here earlier, REACH is useless, very costly and has negative repercussions for businesses around the world.

A compromise on the proposed policy was reached before the vote, to exempt some chemicals from the full range of tests and reduce the paperwork requirements. But REACH remains deeply flawed, as it is an expensive bureaucratic program. And none of the proposed reforms to the policy can change the fact that the program promises little or no environmental impacts. But it does promise severe economic setbacks, as it will create needless market distortions and hinder free trade.