Our Economic State

How Europe Can Get Its Mojo Back

European union map made out of binary code, illustration.
The European Union needs to unlock its digital potential rather than fight over monetary and fiscal policy.
  • Why it matters

    Why it matters

    Europe’s stagnating economy might move forward by doing things such as easing the way for startups, launching a digital offensive and formulating a joint energy strategy.

  • Facts

    Facts

    • Economists at the recent meeting in Britain included Germans who adhere to ordoliberalism and predominantly Keynesian-minded colleagues from Europe and the United States.
    • Wikipedia describes ordoliberalism as a German form of social liberalism that emphasizes the need for the state to ensure that the free market produces results close to its theoretical potential.
    • Keynesian economics, on the other hand, is described as the various theories about how in the short run, and especially during recessions, economic output is strongly influenced by aggregate demand (total spending in the economy).
  • Audio

    Audio

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If there is such a thing as a lion’s den for upstanding conservative German economists, known as ordo-liberals, then it’s probably Keynes Hall at Kings College of the University of Cambridge in Britain.

It was at Keynes Hall, of all places, towered over by a life-size bust of the British economist and politician John Maynard Keynes, that prominent German economists assembled last week.

The Germans included Lars Feld, a member of the German Council of Economic Experts, a key group of government advisors; Clemens Fuest, president of the Munich-based economic research institute Ifo; and Otmar Issing, the former chief economist of the European Central Bank.

They assembled to meet their predominantly Keynesian-minded colleagues from Europe and the United States. In a rare moment of harmony, the guests had all been invited by the Institute for New Economic Thinking, which was founded by financial speculator George Soros, and the Freiburg-based Walter Eucken Institute, headed up by Mr. Feld.

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