What is National Economic Council?

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What is National Economic Council?

Based on the words expressed by the president of the Cabildo Abierto, Guido Manini Ríos – during the meeting between this political force and Un Solo Uruguay (USU) – on the need to establish a National Economic Council to adjust the course of the country, based on a foreign example – like Federal Germany after the Second World War – of an Economic Council. We consider it appropriate to explain the scope and powers. This kind of council.

Social market economics is a synthesis of the liberal political-economic tradition (individual rights, republicanism, market) with the tradition of socio-Christian thought (human dignity, social justice, solidarity). Be at the service of the human person and his little associations, not the other way around.
Political Dialogue, Konrad-Adenauer-Stiftung, March 2009.

After World War II, Germany was not only destroyed but occupied with debt. The country’s territory was divided into four zones and distributed among the conquering powers and the economy heavily interfered with.

But after negotiations for German reunification failed, particularly due to growing tensions between the Soviet Union and the United States, the division of Germany into a federal Germany was considered the only viable way to negotiate. The West, and the German Democratic Republic, would be included in the Soviet bloc. Thus, the British and American governments initiated the economic union of their respective territories with German territory in 1947, followed by France in 1948.

“The final restructuring of the Economic Board decided to provide a bicameral structure that included an Economic Council – consisting of 104 members elected by the Houses of Parliament. land, It was created again – and the State Council, of which there are eight each Lander I will represent two delegates. Thus, an economic parliament, with its own administrative structure and reaching the three western cantons, began its activities as a kind of general German institution. The reform of the Economic Council, which coincided with monetary reform, almost overnight put Germany on the road to its spectacular recovery, contributing greatly to its success. German miracle)

In this way, Ludwig Ehrhardt was appointed, he was the guide to what would later become known as the social market economy, he was also in charge of the finances of Bavaria, and was the head of the economic department of the collective administration. Occupied Western Territories. Ehrhardt quickly announced several basic laws for the so-called “German miracle.” The first is monetary.

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Konrad Adenauer

But one of the real architects of the new German social and economic order in 1948 was Chancellor Konrad Adenauer. He was responsible for this development along with Erhardt, who was his economic minister. Both were fundamental pieces of the German Christian Democratic Union (CDU) political party, where they managed to consolidate a policy in which Christian values ​​were combined with the principles of a market economy.

In this way an Economic Council was established (Economic Council) with jurisdiction over fiscal and monetary policy, as well as statutory powers to legislate in freight transport, production and distribution, among other areas. In addition, it had five directorates (similar to secretaries of state) for different regions.

In this way, Germany implemented its own model, in which it knew how to mix some basic characteristics of traditional liberalism, but did not place blind faith. Let it happen. At the same time, he maintained faith in markets, but without forgetting the role of the state as regulator, protector of the weak and guarantor of acquired rights. Also, the German Economic Council established a policy that created opportunities for companies but at the same time protected workers.

After the economic bloc’s policies were implemented, companies received incentives to sell again, factories reopened and workers returned to their jobs. In the following years, industrial production grew at a double-digit rate, wages grew by nearly 10% and per capita income by 8% over the next five years. By 1964, the gross domestic product (GDP) had tripled that of 1948.

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Background of Uruguay: “National Economic Council” Bill

In our country, in 1955, a few years after the implementation of the Economic Council in Germany, Dr. Salvador García Pintos – a doctor, essayist and politician from the Civic Union Party – drafted a bill to implement the “Economic Council”. National” is mentioned in Article 231 of the 1934 Constitution.

It is interesting to explain the reasons given by Salvador García Pintos regarding the powers granted to the National Economic Council by the Uruguayan Magna Carta. First, it clarifies that although it is important for Uruguay to implement it, the nature of the Council will be advisory and its diagnoses, plans or other types of information provided by said body will not bind the executive branch. “It won’t be an organ, an organ to think,” Garcia Pintos pointed out. Because, according to our constitution, the functions of the government cannot be limited or delegated to any body.

But as the legislator points out in the explanatory statement for the scheme, nowhere in the constitution is it denied that the executive arm must consult the National Economic Council on matters of national importance. Above all, when they are issues that have not only an economic but also a social impact.

Throughout the history of this country, however, we have seen how the competing interests of party politics have sidelined any system that threatens the total independence of the executive branch and legislature, even through consensus. This shows how little technical factors play a role in our national policy, even if it is detrimental to the nation itself. Along those lines, the Uruguayan political spectrum did not vote for the bill of Salvador García Pintos, even if it was approved in the respective commission.

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In conclusion, we can say that it is at least paradoxical to be labeled as populists when the institutions and organizations, political or business actors who claim to protect the legacy of Konrad Adenauer talk about the importance of implementing this idea. Ignore the real foundations underlying the economic growth of the second half of the 20th century.

Bill: National Economic Council
Montevideo June 13, 1955, Salvador Garcia Pintos

Art.

Art 2 “The Economic Council shall consist of a Central Committee and an Economic Chamber. The Central Committee will consist of eleven members specializing in economics, and the Economic Chamber will consist of thirty-one members, representatives of industries and economic groups.

Section 3 “The Working Committee shall be composed of: a representative of the Banco República, a representative of the National Private Bank, a representative of the Faculty of Economic Sciences, a representative of the Export and Import Controller; Seven members chosen by the executive branch from among those with significant knowledge in economics.

Article 4 “The economic chamber shall be composed of representatives of the following organizations: workers’ and employees’ associations, employers’ organizations, industrial organizations, agricultural and livestock organizations, agricultural associations, consumer cooperatives, production cooperatives, mutual organizations, organizations of inactive classes.

Section 5 “Duties of the Executive Committee: To prescribe its own regulations and economic chamber. Eliminate questions raised in the Economic Council. […] Propose drafts or amendments to laws on economic matters. Propose by studying the economic planning of the country, orientation of agricultural exploitation, general problems of production and transformation of industries, consolidation and orientation of industries and its connection with rationalization of trade of their products. Promoting harmonization of protectionist and financial laws, working conditions and regulations and harmonizing costs and salaries with the realities of the external market and potential for internal consumption. To promote and organize economic research.

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