The EU must stop economic over-regulation

The Free Market Road Show, an international series of events launched by the Asutrian Economic Centre, aims to promote market-oriented economic thinking around the world. The event was moderated by investment expert John Prout. During the first panel, participants discussed the problems of centralisation, and during the second panel, they discussed the processes of the near future and possible solutions to the economic policy problems facing the West. During the first panel, Neven Vidakovic, Director of business consultancy Loti Trading, said that the most important problem in the European economy is that the current political leadership of the European Union is preoccupied with maintaining its own positions. Instead of internal lending to smaller firms, which is now necessary for global competitiveness, and instead of reducing regulations and economic barriers within the EU, the bureaucracy is protecting itself, putting the brakes on economies with new and newer regulations. According to businessman John Chisholm, it is a very serious problem that interest rates are set entirely on the basis of political considerations - this is what caused the collapse of the Silicon Valley Bank in the US, for example, alongside its irresponsible business policies. Business expert Terry Anker said: in fact, the famous American consumer culture is being stimulated by the political establishment, hoping to keep people satisfied with the possibility of unlimited shopping and consumption. However, this will lead to a rampant personal and commodity lending and make the public highly sensitive to interest rate changes by commercial banks.

As for future solutions to the problems, the participants agreed that serious savings are needed in all communities. Former ambassador Péter Szabadhegy pointed out that Greece had also reached balance thanks to the fact that its citizens had been forced to accept a real wage cut of around 20%. Accordingly, a state should introduce austerity measures when necessary.

John Fund, a journalist for the National Review, pointed out that America just doesn't want to introduce austerity measures. There is no question of raising taxes; no Republican representative has voted yes on such legislation in Congress since 1990. At present, Biden is in danger of making the US federal government dysfunctional by showing no willingness to compromise in negotiations on raising the debt ceiling. John Prout noted that, regardless of this, US dominance of the world economy will continue to be decisive for a long time to come, because the dollar's role as a reserve currency will be maintained for a long time to come, as trillions of dollars are being lent out in this currency worldwide.

The panelists warned against a serious China-US economic conflict, urging instead for the drawing of appropriate boundaries in the relationship between the two countries. Péter Szabadhegy drew attention to this: Hungary would also be badly affected by such a conflict, as the country's economy is extremely open and therefore sensitive to global economic developments, the effects of which we are seeing now.

Danube Institute