Berlin could destroy the last vestiges of budget discipline in the EU
Once a staunch defender of financial responsibility in the eurozone, Germany has thrown its support behind the European Commission’s ill-conceived, unwarranted and politicized spending scheme to aid the eurozone’s economy.
Europe and Russia would be wise to seek better relations
As the globalization process ends its 40-year run and the world fragments into political and trade blocs again, the largest powers are adjusting their geopolitical stances. Europe and Russia both have compelling reasons to resolve their differences and collaborate more closely.
The economic consequences of a global fragmentation will be severe
As the economy begins to sag, China’s ruling party is tightening control over the country and fanning nationalist sentiments in response to justified criticism from abroad. International tension is rising. The world could split up into competing political and economic blocks once again. This would be particularly harmful for Europe, ...
The German constitutional court’s courageous ruling was necessary
Germany’s Federal Constitutional Court in Karlsruhe made history on May 5, 2020. The justices found that the European Central Bank could have acted outside its remit by purchasing government debt. Accordingly, the court suspended the Bundesbank’s participation in the ECB’s program.
Business strategies are needed for the rough economic stretch ahead
Governments and supranational organizations that weakened the economy’s resilience with overspending, accumulating debt and arbitrary taxation before the pandemic are now doing more damage. They have resorted to scare tactics to expand their control under the pretext of responding to the downturn brought on by lockdowns. The short- and mid-term ...
Sound business is key, not centralist ambitions
French President Emmanuel Macron’s call for more “solidarity” among eurozone states may have a nice ring in today’s harsh pandemic times. It is, however, a disguised attempt to make the enterprising and frugal European states pick up the tab for the irresponsible ones. Instead of a “transfer union,” France and ...
Europe after the crisis
The COVID-19 pandemic is dealing body blows to the world economy, but it is not the root cause of concerns about Europe’s future. Brussels’ and Frankfurt’s stock responses to the impending crisis – money printing, easy credit and massive public expenditure – only bring Europe closer to socialist-style centralization.
A trillion euros on the wrong policy
There are several cost-efficient and market-friendly policies that could be implemented by both Germany and the European Union to reduce the impact of carbon emissions on the environment. However, these solutions are being cast aside while the European Commission attempts to create a planned economy through “green” measures.
How to destroy the European Union
Once, the “European idea” helped unite a war-weary continent. Now, overbearing central authorities, suffocating bureaucracies and reams of red tape are limiting the freedom that idea once promised. Europeans are losing trust in their institutions, and worry for their own security. At the heart of the problem is weak leadership.
Politics follow the money – the ECB’s fate
History contains many examples of what happens when politicians gain control over the currency. Few of them end well.
Dark clouds gathering over the global economy
We are probably coming to the end of a global economic recovery. But with interest rates still hovering around zero, central banks will have no ammunition to fight a recession. Meanwhile, debt is high and more trade barriers are going up. The underlying causes of global economic imbalances, and not ...
EU budget plan offers progress and pitfalls
The European Commission is finally taking steps to trim unproductive spending in areas like agriculture in its budget framework for 2021-2027. But while the new emphasis on fighting waste is promising, the fiscal plan also contains troubling proposals. One of the most disturbing is to reduce cohesion payments to countries ...
Irrational tax and regulatory systems
The true story of the Paradise Papers is less about shady business deals than about the byzantine regulatory and tax structures of developed countries. It is a lesson that politicians like French President Emmanuel Macron are studiously trying to ignore.
Creating tax cartels would be detrimental to the EU
The EU needs to maintain a healthy dose of tax competition among member states. Replacing it with a uniform “European taxation system” would encourage excessive public spending.
Taxation horrors and Europe’s frustration
The European Union wants to create new, complicated systems to tax technology companies. Doing so will only harm its economy. Instead of engaging in an economic tit-for-tat with the United States, it should look at how Americans have fostered innovation and built tech giants. Good places to start include increasing ...
Protectionism undermines European principles
Emmanuel Macron came to office promising to liberalize the French economy and reduce the role of the state. But his government is already turning protectionist, threatening to “temporarily nationalize” a shipyard. The move undermines European and liberal principles.
Crusade for total control
The campaign in many countries against cryptocurrencies such as bitcoin is part of a larger government quest for citizen control. Oversized transaction and compliance systems, ostensibly imposed on financial institutions to help fight the gray economy and terrorism, are in fact control tools, used both by democratic and authoritarian governments. ...
The Chinese economy: it’s about debt
China’s high ratio of debt to gross domestic product (GDP) will necessarily lead to an economic slowdown. The question is whether that can happen in a controlled manner that limits the negative effects on the country and the region, or whether it will bring China’s economy crashing down.
An unholy tax saga: Apple and the European Commission
The European Commission put itself on a shaky legal ground when it resorted to unfair competition charges to frame its attack against a tax deal between Ireland and Apple Inc. Disturbingly, the commission also has resorted to blatantly populist rhetoric to justify its action against a profitable company.
Clueless central banks
Despite quantitative easing, forward-guidance and negative interest rates, global GDP growth has not taken off. Avoiding the business cycle should not be the priority of central banks or governments. Creating conditions that allow businesses and individuals to deal with the cycle, should.
After Brexit, what is Europe?
Brexit can be a healing shock to the European Union. The United Kingdom’s decision to opt out forces Brussels to finally confront a central issue: what is Europe’s true identity. The European project can thrive only if it is democratically developed from the ground up, by its diverse and pragmatic ...
Cheap money policy does not fool citizens
Central bankers and a sizeable group among western economists and political leaders believe that low to negative interest rates are encouraging consumption and economic growth. The policy has not been working, however, because citizens rightly distrust it and appreciate the importance of savings.
Market economies, regulation and crony capitalism
The global economic crisis arose in the world's most highly regulated sector – the financial industry. That is certainly no coincidence. When government intervention and easy money meet big banks, the result is cronyism – the furthest thing from genuinely free markets.
Economic riders of the apocalypse
The G20 finance ministers and central bank governors have already met twice this year to discuss the world economic situation, writes Prince Michael of Liechtenstein. After the February meeting in Shanghai, they released a cautiously optimistic communique congratulating themselves for “important achievements” in bolstering growth and stability...