Munich: How to regain economic growth

The Free Market Road Show made it last April 17th to the capital of Freistaat Bayern, picturesque Munich. Our local partners, who carried out a superb job, were the Taxpayers Association of Bavaria and the Bavarian Economic Council. ì

Right from the start of his speech, Rolf von Hohenhau, chairman of the Taxpayers Association of Bavaria, stressed the importance of tax competition and the protection of property rights as a precondition for economic growth. Ingo Friedrich also put emphasis on the importance of norms – especially in the framework of the negotiations of the Transatlantic Trade and Investment Partnership (TTIP).

In turn, Johannes Hintersberger, the Federal Minister of Finance of Bavaria focused on two key points. Firstly, the divergent levels of investment of the digital industry. While in Bavaria it amounts to 1.5 billion euros, in the rest of the German Federal Republic reaches 2.4 billion. Secondly, he emphasized the importance of lower taxation.

Martin Friedrich had a more positive look regarding Germany and wondered whether his country will be able to bring other European nations into the path of growth.

In any case, the woman of the hour was Dr. Barbara Kolm, Director of the Free Market Road Show. She presented the points she believes Europe needs to get back to the growth path.

Briefly, these points were:

  1. Respect the rule of law (e.g. not breaking your own rules and laws…)
  2. Sound money – this means a stable monetary system
  3. Limited taxation: flat, simple, and fair taxes should be the rule, not the exception
  4. Smart regulation: overregulation is the case in Europe… smart it is definitely not …
  5. Efficient government: we should critically discuss what the tasks of a state/government are
  6. Free trade: which still only exists in theory in Europe
  7. Individual choice and protection of property rights: in which Europe is falling behind
  8. Free and competitive markets: an obvious precondition for economic growth
  9. Entrepreneurship and right incentives: we won’t achieve the goal of a prospering, innovative society with debates marked by envy à la Piketty
  10. Brave politicians: who should create and preserve this framework

Kolm finished her remarks arguing in favor of a different Europe. According to the Austrian economist, Europe was most successful when its economic units were larger than the political ones. Nowadays, this is hardly the case with Brussels growing at full speed in influence and power. “Europe should remember its past, learn from it and become ambitious again. Instead of being satisfied by comparing itself with the average, excellency should be the measure once again”, she concluded.