Economy

Competitiveness is a strange beast—always measured against outsiders, yet forged internally. In her annual address, European Commission President Ursula von der Leyen reminded us of a hard truth, one that “after Draghi and Trump” can no longer be ignored: competitiveness is not a game; it is a matter of survival.

Imagine two economists walking into a grocery store whose shelves are completely empty. One says: \"The problem is production — not enough goods are being created.\" The other one replies: \"No, the problem is demand — people aren’t spending, they’re saving. The state must stimulate consumption.\" This dispute still shapes how governments respond to crises, how they spend money, and how modern macroeconomic policy is justified.

It will soon be two years since rock rebel Javier Milei took office as president of Argentina. Since then, Argentina\'s economy has been shaken to its foundations. In a country with a deep-rooted public finance crisis, hyperinflation, and extensive subsidies, a government of uncompromising cuts took office and, within a few months, changed the fiscal balance, suppressed inflation, and reduced dependence on social transfers.

The history of Thanksgiving\'s origins is instructive for modern times in several respects. It is widely known that the first Europeans to set foot in the Americas faced severe hardships. Nearly half of them starved to death as agriculture failed in their new lands. Today, we no longer confront the hunger endured by the first pilgrims.

A New International Comparative Study by C4D Consulting on behalf of the Friedrich Naumann Foundation for Freedom reveals: a lack of structural reforms and the planned EU ban on combustion engines threaten up to one in three jobs in the automotive industry, weakening its innovative capacity. Instead of technology bans, open and competition-friendly framework conditions are needed to secure the European automotive industry in global competition.

According to the Fraser Institute’s latest Economic Freedom of the World report, Ukraine has once again found itself in the group of the least economically free countries in the world. Ukraine is currently ranked 143rd among 165 countries and territories, a slight improvement from the previous 150th place.

Economists have been fascinated by the question of the origins of prosperity since the very beginning of their discipline. Today, we know much more about it than Adam Smith did 250 years ago when he wrote The Wealth of Nations. In the mid-20th century, economist Robert Solow developed a model explaining economic growth through capital accumulation and population growth.

I recently attended a discussion on Europe’s competitiveness. There was unanimous agreement that we are lagging behind in all applied technologies—perhaps with the sole exception of the pharmaceutical industry. The reflexive response from the participants was: “We’ve created a fund for that.” Too few startups? Create a startup fund.Weak AI performance? An AI innovation fund!

“Competition is a discovery procedure that enables us to adapt to new circumstances. It is through further competition, not through agreement, that we gradually increase our efficiency.” This statement by economist F.A. Hayek best captures the essence of competition. Competition constantly separates the efficient from the inefficient. The invisible hand of the market is, in fact, the visible hand of the customer.

One of the recommendations of last week\'s IMF mission in Bulgaria is to \"cool down wage growth in the public sector.\" This is not the first time that the IME has commented on the accumulation of risks to fiscal stability as a result of ill-considered decisions to increase spending, and in particular wages in the defense and security sectors over the past year.