Economic Freedom in the EU: Mediocre today – world leader tomorrow?
Over five years have passed since the outbreak of the most severe economic crisis of our time. Since then, there has been an ongoing global and European debate on how to restore economic growth. Several years before the outbreak of the crisis, the EU set an ambitious plan with the Lisbon Strategy to become the most dynamic and competitive region in the world. There is widespread consensus that today’s levels of unemployment, exclusion, deficit, and debt are undesirable and unsustainable, and need to be addressed.
None of these challenges will be overcome without boosting economic growth. As growth cannot be commanded, the ongoing debate on “austerity measures” vs. “growth” is misleading and false. Rather, the challenge lies in creating societies where individuals, families, and companies are able to work, trade, consume, save, invent, and invest without tangled regulation, high taxes, or other obstacles.
Simply put: the challenge lies in increasing economic freedom.
This memorandum seeks to contribute to the debate by showing that while many EU-countries (including Sweden, Poland, Lithuania, and Germany) have seen an increase in economic freedom over the last years, much remains to be done. In regards to economic freedom, the EU in total is nowhere near its goal of being a world leader. A weighted ranking for the European Union as a whole would rather bear more resemblance to countries like Brunei, Rwanda, and Uruguay than major competitors such as USA, Canada, Australia, and Taiwan.
Thus, Europe is in need of further reforms. Luckily, the solution is not hard to find. What needs to be done is to use the method of best practices by learning from those EU member states which are freer and more successful than others. As shown in this memorandum, the method of “follow the leader” would rapidly transform the EU into a global leader position, ahead of comparable countries and regions. The example should be used as an illustration of how to reach the goal of the Europe 2020 strategy, which aims to create the world’s most dynamic and competitive economy.
First and foremost, the reforms would be an important step in the fight against youth unemployment, deficit, and exclusion. A strategy to increase the economic freedom in the EU as well as in individual member states would tackle both the short term challenges as well as align with the European Union’s long term agenda.
See the film #ChooseFreedom, based on this memorandum, here.