IREF - Institute for Research in Economic and Fiscal issues
Fiscal competition and economic freedom
26 February 2015, 6pm, Royal Irish Academy, Dublin. Open to all. Prof. Enrico Colombatto, the Head of Research at IREF, will deliver a lecture on his analysis of the true shortcomings of contemporary Europe, far more important than the eurocrises. Prospects for the future will be discussed.
Europe is in a quagmire because it has failed to meet two basic challenges. First, after having seen the light as a free-trade area, it gradually evolved towards a political project. Yet, it failed to acquire the necessary legitimacy to obtain the powers it needs in order to design and carry out a consistent policymaking agenda. Moreover, many policymakers – both in the member countries and in Brussels – have failed to fully grasp the meaning and consequences of globalization. In fact, this term is a synonym for worldwide competition, in which the winners are those able to deploy their entrepreneurial skills whenever an opportunity arises, and promptly correct their mistakes. In this light, the European Union has failed to create an institutional setting in which this can happen. Thus, we are falling behind (with some exceptions). These shortcomings are far more important than the so-called eurocrisis.
The future remains cloudy, and unless some major countries bring about substantial reforms, growth is going to be sluggish across the continent. In the meantime, Brussels and Frankfurt will perhaps decide whether the common currency is a technical tool, or a picklock to break through a number of political bottlenecks and justify unpalatable decisions. In regard to the grand project to obtain a federal entity, deadlines are being postponed, for want of clearer visions and firmer resolve.