Autor: FWG
Not only is the European Union’s poor economic performance devastating for its citizens and their well-being, but it also fuels anti-EU populists whose cures, which include dismantling the Union, are frequently worse than the illness. In order to survive, the European Union must also undergo significant economic transformation.
“It’s the economy, stupid!” was a catchphrase used during Bill Clinton’s successful 1992 presidential campaign and remains popular to this day. Donald Trump, along with Elon Musk and a group of entrepreneurs who seek radical change, were brought to the White House more than 30 years later, primarily due to economic concerns. The US economy was growing up to five times faster than the European Union’s in 2023. Nonetheless, this was insufficient for the Americans. So what can the Europeans say? Not only is the European Union’s poor economic performance devastating for its citizens and their well-being, but it also fuels anti-EU populists whose cures, which include dismantling the Union, are frequently worse than the illness. In order to survive, the European Union must also undergo significant economic transformation.
Poor growth is mostly caused by declining competitiveness, high energy costs, increasing regulation, and slowing innovation. Polish Prime Minister Donald Tusk was right that “the European economy must become a powerhouse once again, a growth powerhouse, a powerhouse that is not afraid of any competition.” However, it is time to move from words to action, as over the past decade or so, thousands of pages have been written in words and little has come of it for the EU economy.
In 2024, about 300 days after the European Council’s decision, Enrico Letta’s report on the Single Market was released. A year after the President of the European Commission made her declaration, we found out what Mario Draghi’s report on competitiveness included. In both reports, written under the watchful eye of former prime ministers of Italy, which is not famous for either rapid growth or decisive reforms, sensible deregulatory proposals that are worth implementing immediately are mixed with unrealistic attempts to make everyone happy (e.g. let’s spend even more, but at the same time, maintain all social programmes) or recommendations that will weaken competitiveness. In the upcoming weeks, it will be possible to compare the results of the Letta and Draghi reports with what US entrepreneurs Elon Musk and Vivek Ramaswamy will be achieving under the “Department of Government Efficiency”.
In addition, there are thousands of pages of publications in the drawers of the European institutions from the last dozen years about the unfinished construction of the Single Market, overregulation and incoherence of European law. A 2020 study by the European Commission shows that 60% of the barriers at the Single Market identified by businesses were also reported…twenty years earlier. Old restrictions are not being removed; new ones are emerging. Therefore, it is evident what needs to be done, and the EU now requires brave and determined individuals who will finally take action. Leszek Balcerowicz and other Polish reformers in 1989 possessed these attributes, and Javier Milei in Argentina has them today. Who will be at the forefront of change in Europe?
This is where the opportunity for Poland opens up. The Polish government should use the much greater strength of the Polish economy than when we joined the EU, the European experience of the Prime Minister and the presidency of the Council of the EU, to move into action in the spirit of the slogan “ It’s the economy, stupid.” Compared to many other EU member states, Poland’s economy has grown more quickly over the last three decades. Our history includes a number of significant reform measures, as well as the successful economic transformation in 1989. The European Union needs decisive leaders that will inspire Europeans to take action, unlock the continent’s still vast but untapped potential, and enable businesses working within the Union to grow. The EU cannot afford to make any more gradual reforms at the pace typical of Brussels bureaucracy.
Prime Minister Donald Tusk rightly pointed out that “restrictions, overregulation, sometimes naive ambitions to protect the entire planet have made us increasingly uncompetitive.” Energy prices in the EU are several times higher than in the US or other neighbouring countries such as Algeria, Egypt or Turkey. This undermines the competitiveness of European business and hurts the economy, consumers and workers. It limits the room for wage increases while products are more expensive. In addition to the insufficient natural resources in Europe and Russia’s invasion of Ukraine, the Union’s excessive burdens and overreaching green policies in the name of these “naive ambitions” are also to blame for these high prices.
Protecting the environment is significant, and importantly, wealthier communities take better care of the environment than the poorer ones do. Therefore, the green policy that the EU should be pursuing is primarily rapid economic growth. As long as the innovations are not hindered, they will also lower production costs and increase energy efficiency. Energy and industrial regulations must adapt to technological progress without causing price increases or significant adjustments to production methods. The European Union’s survival and progress both depend on the revision of its climate targets and environmental regulations. Otherwise, anti-European populist groups will keep becoming stronger and will try to destroy the Union, which means abandoning not just all green policies but also the Single Market and peaceful cooperation. The actual threat that needs to be addressed is this, not the upcoming apocalypse that some climate activists have declared.
Overregulation of the digital economy and new technologies has also been occurring over the past decade, which has hindered innovation and slowed productivity growth. According to the Draghi report, the EU currently has about 100 laws pertaining to the emerging technology sector, and member states have over 270 regulators who handle digital issues. This does not mean that regulations should not exist; rather, they should be coherent, less intrusive to rapidly evolving technology, and promote innovation rather than defending outdated business models. While the legal system should take into account phenomena such as the development of artificial intelligence, this does not mean that the Union should be proud of achieving “the world’s first comprehensive regulation of AI.” The US has more to be proud of than having the largest technological companies in the world or the strongest AI industry.
Let’s move on from artificial intelligence to more mundane matters. People are already working less in most EU countries than in the US or Asia. Whether we like it or not, prosperity also comes from work, so if we want to continue to develop, we have to work. In Poland, the ideas being pushed above all by the social democrats and radical left for a top-down reduction of working hours and days should be blocked. At the same time, further intensification of trade wars will be detrimental to both the European Union and the world, because free trade is best for development. Hence, the EU leaders should dissuade Donald Trump’s administration from its protectionist plans.
Furthermore, many of the Single Market’s obstacles – like those concerning regulated services and professions – are of a national nature. In order to counteract the effects of intra-EU protectionism, the EU should put more pressure on Single Market participants with measures to reduce the regulatory burden in their own countries. Poland should not be at the vanguard of nations with the most regulated professions, overregulation of services, or being in the bottom of economic freedom indices if it hopes to lead economic changes within the EU. In 2025, let’s begin transforming Poland and the EU.
The Single Market was the result of decades of the European Union’s efforts to establish a reputation for peaceful cooperation and growing economic ties. Today, bureaucracy and regulation are obscuring this legacy of peace and progress. The Industrial Revolution started in Britain and later reached other European countries. The Union is now in risk of turning into an open-air museum of industry and economic growth.
We should remember our local proverb “a wise Pole after the damage is done” in addition to the slogan “it’s the economy, stupid!” Waiting till the negative effects of poor economic policies become more severe is not an option. If we want Europe to become a growth powerhouse again, we should be encouraged by Musk and Milei’s enthusiasm and ambition, even if we do not agree with all they say. The Polish government should advocate for a decisive and bold transition on the continent. Rapid economic growth will be the best shield against external and internal enemies of the European Union.
Arkadiusz Mus, Polish entrepreneur, President of Press Glass Holding
Marek Tatala, CEO of Economic Freedom Foundation
Polish version of this article originally appeared in Gazeta Wyborcza newspaper in January 2025.
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