Correct Analysis, but Flawed Remedies
A conference of the Paneuropa-Union Romania discussed the assessment of the Draghi report on European competitiveness. The fact is that Europe, the European Union, is losing competitiveness. But are the remedies in Draghi’s report really the right approach to solving the problem?
“A few days ago,” began Rainhard Kloucek, President of the Paneuropean Movement Austria, in his remarks on the Draghi report on European competitiveness, “the headline of an Austrian daily newspaper read: Von der Leyen warns of Europe’s economic decline.” The President of the European Commission was probably right with this statement, but she forgot to mention that she is not part of the solution but part of the problem. One only needs to consider her time as Minister of Defence in Germany and assess the current state of the Bundeswehr, or think of the Green Deal, the Supply Chain Act, or the many other bureaucratic measures of the Commission.
“It is true that this excessive bureaucracy cannot be blamed solely on the Commission,” Kloucek continued, “because not a single government of an EU member state, for example, has spoken out against the Supply Chain Act.” Von der Leyen has now announced a Commission initiative for debureaucratisation. “If anyone in this room has an argument as to why we should believe that bureaucrats would now dismantle bureaucracy, please share it,” was the challenge to the audience at the specialist conference in Bucharest.
But now it is about the Draghi report. “Super Mario,” as he was often called, “removed market mechanisms with his ‘whatever it takes’. He produced cheap central bank money and thereby created illusions, but not innovation and competitiveness.” Zombie companies (i.e., companies that would have long since been driven out of the market if they could not constantly refinance themselves with cheap money) and inflation are the consequences of this policy.
More Hayek and Mises instead of Draghi
Just as Draghi, as ECB President, often presented a correct analysis but then implemented the wrong measures, it must also be noted in the current report that the analysis of Europe’s lack of competitiveness is correct, but the proposed measures are often flawed remedies.
For Kloucek, however, a revitalisation of the capital market, i.e., a departure from the prevailing bank financing of the economy, would certainly be sensible. “But this requires education, training, in which the entrepreneur is not the exploiter, but the one who creates prosperity.”
Kloucek described the idea of European debt as a pyramid scheme. Because states are so heavily indebted, they are now looking for ways to incur even higher debts at a new level. “That doesn’t solve the problems; it only postpones them.”
“Instead of Draghi, we need more Hayek and Mises, or indeed ordoliberalism,” was the concluding plea of the Austrian Paneuropean President.
c Featured image: Paneuropa Romania
