Challenging the EU’s Free Market System

Challenging the EU’s Free Market System
Post Author
  • Roar Bjonnes is the co-founder of Systems Change Alliance, a long-time environmental activist and a writer on ecology and alternative economics, which he terms eco-economics.

European Union

The European Union (EU) was formally created in 1993 as a result of the Maastricht Treaty. The EU is an economic and political union of 28 member states operating through a system of supranational institutions and intergovernmental negotiated decisions by the member states.

Institutions of the EU include the European Commission, the Council of the European Union, the European Council, the Court of Justice of the European Union, the European Central Bank, the Court of Auditors, and the European Parliament.

The European Parliament is elected every five years by EU citizens in Brussels, EUs “capital city.” This parliamentary city is also home to thousands of bureaucrats lobbying politicians to enact their economic dreams and policies. Each of the largest multinational companies can have upwards of 200 lobbyists representing them.     

The Maastricht Treaty established the European Union in 1993.The latest major amendment to the constitution of the EU, the Treaty of Lisbon, took place in 2009. The EU has developed a single economic market through a standardised system of laws that apply in all member states.

Within the Schengen Area (which includes 22 EU and 4 non-EU states) passport controls have been abolished. EU policies aim to ensure the free movement of people, goods, services, and capital, enact legislation in justice and home affairs, and maintain common policies on trade,agriculture,fisheries, and regional development.

The formation of the EU was a logical extension of the EEC, and was an attempt to draw European countries even closer together into one common market. The European Union is a far-reaching concept, which for the first time in human history has united 500 million people from twenty seven different countries without a centralized state behind it. The economic foundation of the EU as established in the Maastricht Treaty is the Four Freedoms. These are not the same four freedoms envisioned by Franklin Roosevelt–freedom of speech; freedom of worship; freedom from want; and freedom from fear. While Roosevelt’s freedoms concerned the rights of the individual, the EU freedoms were the commercial freedoms of an open market: the free movement of goods, services, persons and capital.

With the four freedoms of the EU, most tools that individual governments traditionally have had to influence their economies were removed, and the whole of Europe turned into one large experiment in free market capitalism. While the original vision might partly have been to preserve peace in Europe, the foundation of the EU is more about a certain economic worldview than that of promoting peace; the worldview of neo-liberalism, a deregulated economy of capitalist competition.

The four freedoms of the EU were designed to forward a neo-liberal economy in all its member countries coupled with democratic but centralized government regulations from the European Parliament in Brussels and monetary regulations from the European Central Bank. 

This form of free market capitalism has benefitted the most developed countries economically, as well as the largest corporations. At the same time, it has often reduced the ability of less developed countries and communities to catch up and develop their industries.

This leads to uneven development, where rich countries and regions prosper and poorer areas often fall behind, a situation which has also become a reality in present day EU. Indeed, free markets do not automatically bring about freedom from want, the fourth of President Roosevelt’s freedoms. Yet, this is the gospel perpetrated by free market economists and politicians.

The Myth of Free Markets

The Myth of Free Markets

Another favourite myth of free market neo-liberalists is that open and free markets are always better for business and for people. Here are a few reasons why this is not always so: 

–Free markets favour large companies, those with the most money and power will generally outcompete smaller companies. Hence, free trade reduces freedom of choice for smaller companies and people in general—they are forced to compete within an economic environment fixed by the larger companies.

–Free markets do not favour investments in smaller businesses, such as farms and specialized industry in poor areas because they are not competitive. However, for the growth and sustainability of a poor area, investing in such businesses, even if they make a loss for several years, is, in the long run, good for society and the economy. 

–Free markets do not allow less developed areas to protect themselves against competition from companies from larger companies from other countries.

–Free markets often create an economic “race toward the bottom.” Examples in Europe are an increase in zero-hour companies such as UKs Sport Direct, where employees do not have fixed salaries, don’t know how many hours they can work, and have no health benefits. 

–Free movement of labor between rich and poor areas can be greatly profitable for corporations but can also create a shadow economy of low wages, illegal employees, brain drain, and economic and increased human stresses within the social welfare system,

–Free markets do not recognize that certain state-owned companies, such as in the alternative energy, health, and oil sectors, can be a better alternative for the stability of the local economy and for the environment.


  • Roar Bjonnes is the co-founder of Systems Change Alliance, a long-time environmental activist and a writer on ecology and alternative economics, which he terms eco-economics.

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