The EU’s tilt toward centralization
The European Commission has proposed creating a European Ministry of Economy and Finance, and transforming the European Stabilization Mechanism into the European Monetary Fund, controlled by Brussels. These steps toward economic centralization are dangerous for Europe’s competitiveness. What it needs is diversity and regional competition.
Is a European Monetary Fund needed?
In December, the European Commission will publish its proposal to establish a European Monetary Fund. From a strictly economic point of view, such a fund is not needed. There are plenty of political reasons, however, with Germany, France and the EC all pursuing their own contradictory goals. That makes it likely that an EMF will eventually be created, even though it will amount to little more than the existing European Stability Mechanism.
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.
Limits on posting workers create Europe’s high-cost cartels
European Union labor ministers have just agreed to a proposal that could see more protectionist measures implemented across the bloc. The new rules would limit employers’ flexibility how much they pay “posted” workers – employees from a different EU member state. Until now, posting workers added needed competition to the labor market. Eliminating that option just protects high-cost cartels created by EU states with excessive cost structures.
Opinion: Putting Europe back on track
These days, it is easy to forget that European integration is a huge success. The founders were right that the free movement of goods and people would bind the continent together and promote peace. But national governments and centralizing democrats have spoiled a good idea through their own timidity and ambition. If the European Union is to play a global role, it must return to its roots.
GIS Dossier: Return of the Daddy State
The aftermath of the 9/11 terrorist attacks and the 2008 financial crisis have led to calls for a dramatic increase in the powers of government. Even the ubiquity of internet-based technologies and the populist backlash against political establishments have had the paradoxical effect of promoting centralization. Yet in both politics and economics, there is plenty of evidence that state paternalism is the wrong answer.
Surprising evolution in U.S. policy toward Ukraine
In no time, Ukrainian President Petro Poroshenko was elevated from Donald Trump’s doghouse to the status of an honored guest at the White House. The U.S. president has discovered reasons to demonstrate to his NATO allies, and the world, his tough stand on Russia. As East-West tension mounts, the conflict over Donbas, a portion of eastern Ukraine captured by Moscow-backed secessionists, may quickly degenerate into a U.S.-Russia proxy war.
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.
Brexit and the sunset of European influence in Asia-Pacific
Though the Asia-Pacific region seems too far away to be affected by Brexit, the UK’s departure from the EU will have a profound impact on the region. While it will reduce the bloc’s significance in the region’s affairs, the UK’s status may suffer as well. Asia-Pacific states will likely look to countries such as Germany to act as a new counterweight to China and the United States.
Opinion: Confusing statements on money and trade
Janet Yellen is not worried about another global financial crisis. Mario Draghi and even Warren Buffet bemoan “inequality.” But no one seems to be taking seriously the problems artificially cheap money is causing to the global economy. With such a fragile global financial situation, free trade could be a big help – but protectionism is on the rise. Could the upcoming G20 meeting bring substantive progress on that count?