"Economist Lars Feld issues a cautionary statement, suggesting a shift towards a novel global system of governance"
Lars Feld, a distinguished German economist and former chairman of the Bundeswirtschaftsrat, spoke at the recent Finance Summit in Berlin, sharing his insights on geopolitical challenges and the future of Europe.
Feld, who is also a professor at the University of Freiburg and the director of the Walter Eucken Institute, expressed positivity towards the federal government's plan to unify procedural law. However, he cautioned that this is the beginning of a new world order, but it is not yet fully tangible.
Feld emphasised the importance of each member state acting responsibly in the face of its individual challenges and implementing necessary measures. He identified structural problems in various industries, including labour costs, energy costs, tax burden, and regulatory intensity. Particularly, Feld highlighted the high regulatory costs for companies as a concern.
Foreign investors, according to Feld, are steering clear of Germany due to high costs, which he believes hampers the country's competitiveness. He criticised the low investment by companies in Germany and identified a lack of movement as a problem. To address these issues, Feld suggested the need for a supply-side policy.
Feld also touched on the debt brake but seemed rather hopeless about it. He understood why Europe is currently submissive due to the continent's security largely depending on the United States. However, he warned against the goal of "dividing the West" and emphasised the influence of the USA in the West. Cooperation within the West, according to Feld, is particularly decisive.
Feld emphasised the insufficiency of the internal market, particularly in the service sector, as a central task for the EU. He concluded that Germany's competitiveness shows a mixed picture. Nevertheless, he stressed the need for Germany and Europe to intensively engage with what can make the West strong in the future.
The chairman of the Bundeswirtschaftsrat, a position held by Lars Feld until 2021, is currently Michael Fuchs. Despite no longer holding the position, Feld's insights at the Finance Summit underscored the need for Germany and the EU to recognise and solve structural problems to secure a strong future.
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