Economist Milton Friedman, one of the world’s foremost economic minds is predicting a major European economic crisis in the near future. Unfortunately, I think he’s right.
The idea of the EU is sound – a common market in which individual European countries drop unnecessary trade barriers and agree to work together on economic issues. There’s no reason why a car made in Germany needs to go through a series of regulatory hurdles to be sold in France.
The problem with the EU is that it replaces the old inflexible and corrupt system of national regulations with a new system of inflexible and corrupt supranational institutions under a framework of bureaucratic arrogance. The EU has taken the worst of Old Europe and magnified it into an even larger nightmare.
Europe must cut spending and reduce it’s draconian labor regulations and embrace the free market more than it has. Unfortunately for European reformers, that means stopping the flow of money to Europe’s massive and horribly ineffcient welfare system. The chances of that happening without major social strife are slim. What Europe needs is a series of Thatchers to shake up the status quo, but the political climate in Europe seems unlikely to produce such a creature. It may just take an economic collapse for Europe to escape its doldrums.