My summer riverboat cruise from Amsterdam to Budapest along the Rhine, Main and Danube proved to be fully as instructive as it was relaxing. The majestic hilltop fortresses, castles and palatial edifices, erected to keep out tribal hordes, also testify to indulgences pursued by monarchs, princes and bishops over hundreds of years of relentless self-aggrandisement that left state coffers bare, subjects in poverty and rulers reduced to the status of robber barons.

The monuments’ hidden legacy includes the vast amount of debt incurred by their owners in erecting them – debt which they could never hope to repay. Yet it was the moneylenders who were vilified as scapegoats for the utter ruination of the state.

If national resources are applied to ventures that provide citizens with no succour, they will certainly prove unsustainable by reference to economic criteria. Indeed, those very fortresses, designed to protect the kingdom, proved in almost every case to be more effective instruments of economic destruction than any threatening rabble.

Has anything changed?

Is there any difference, in principle, between spending the public’s capital on towering baubles that flatter the egos of autocratic medieval rulers, or the horrendous latter-day misallocation of capital directed into projects that would never have even reached the drawing board if subjected to the most elementary test, such as “Would citizens support this project, knowing it is to be funded by their taxes?”

In principle, it’s the same. Instead of “aloof, unelected, autocratic princes obsessed with glorifying their reign”, merely substitute “aloof, unelected, autocratic bureaucrats obsessed with projects to glorify their useless fantasies”.

Even the funding formula of “tax, borrow, plunder” is much the same. Rhineland rulers taxed in coin or kind to a point just short of popular revolt; they borrowed from merchants, moneylenders and neighbouring despots; and stole what they could from any weaker tribes within reach. Today, however, we use a more diplomatic subterfuge.

Lending money to Habsburg rulers carried the risk of default, but that was preferable to having it confiscated anyway. Sovereign lending by the central bank also carries default risk, but since the freshly minted money it lends isn’t real in the first place, the loss is spread over EU taxpayers as a whole. As close to plunder as you could wish for.

Plunder by diktat is another way of putting it

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 Current EU tax chiefs now plan to force low tax regimes such as Luxembourg to raise tax rates in order to “stamp out harmful tax competition.” Plunder by diktat is another way of putting it.

Contemporary follies

As for latter-day castles along the Danube, there is no shortage of contemporary follies that exemplify not grandeur, but misallocation of resources on an unimaginable scale.

The gleaming airport terminal in Spain’s Valencia region, costing €150 million, has yet to have a single passenger pass through its doors, and has little prospect of receiving a commercial flight.

Thousands of kilometers of motorways thrust on Portugal by wholly misdirected EU largesse remain almost deserted by motorists who cannot afford the tolls.

In the UK, Bath is being used as an experiment for “improving local transport and the urban environment” at a cost of €7 million, with €4 million of this coming from the EC’s “Civitas” initiative – that is, taxpayers, none of whom voted for it.

I could go on, but it’s too depressing. Open Europe lists the top 50 most wasteful projects on its website.

Is it any wonder that the Greek Parliament has just issued a warning that Greece will need a third bailout package to avoid default? As long as Greece can get more money from the EU it will continue to need more bailout packages, and will never adopt the reforms that alone will allow it to stand on its own.

Prospero’s famous references to the “cloud-capp’d towers, gorgeous palaces and solemn temples” begins with the words: “Our revels now are ended”. I wish! It seems they are just warming up.