Looking at Europe and its stagnating economy from Prague

We, in the Czech Republic, live in a much better world now than 25 years ago but we are – in some respects – disappointed. The beginning was promising. Both for domestic political reasons and because of our EU accession, we started a reverse process. Our economy is more regulated and subsidized (and harmonized and standardized) now than it was the case a decade ago.

The entry into the EU was not a controlled experiment as the economists understand it. We have not lived in a vacuum, all other things have not been kept equal, the “ceteris paribus” condition was not fulfilled. This makes a serious quantitative analysis almost impossible.

Europe continues marching in the same blind alley as before regardless of the

• deteriorating economic data,
• waning respect and position of Europe in the rest of the world,
• deepening of the democratic deficit we are confronted with, and
• undeniable increase of frustration of those who live in Europe and are objects of this progressivist and constructivist experiment.

The long-term economic stagnation Europe is facing is not a historical inevitability. It is a man-made problem. It is an outcome of a deliberately chosen and for years and decades gradually developed European economic and social system on the one hand and of the more and more centralistic and undemocratic European Union institutional arrangements on the other.

The European overregulated economy, additionally constrained by a heavy load of social and environmental requirements, operating in a paternalistic welfare state atmosphere, cannot grow. If Europe wants to start growing again, it has to undertake a far-reaching transformation of its economic and social system.

Getting rid of the excessive and unnatural centralization, bureaucratization, harmonization, standardization and unification of the European continent means changing the whole concept of the European integration.

The introduction of the Euro weakened the self-discipline of individual countries, created a new “fuzzy” state of affairs and produced an exchange rate which is too soft for the countries of the European North and too hard for the European South. Letting some problematic countries leave the Eurozone – in an organized way – would be the beginning of their long journey to a healthy economic future. 

We need a fundamental transformation of our thinking and of our behaviour. We do need a “Paradigma Wechsel”.