- Luis Garicano, Non-resident Fellow
- Mehreen Khan, EU correspondent, Financial Times
- Guntram B. Wolff, Former Director
In the third event of the Spitzenkandidaten series co-hosted by Bruegel and the Financial Times, Luis Garicano discussed his platform as the ALDE (Alliance of Liberals and Democrats for Europe) candidate for the European Commission President. The interviewers for the event were Bruegel Director, Guntram Wolff and Financial Times Brussels Correspondent, Mehreen Khan.
Garicano began by discussing his general vision for the European economy that he would like to promote as the president of the commission. He explained that the current liberal system based on open markets and free trade is currently under attack from foreign powers and from domestic populists. His goal is to promote the liberal system and to qualm the anxieties and fears that lead to populism by working to create an economy that works for all Europeans, even those who are typically “left behind”in the labor market. He also expressed the importance of European growth in the digital sector and helping European workers develop skills in these areas.
Next, the discussion turned to trade policy. As the commission president, Garicano explained that he would be an adamant supporter of the rules-based multilateral trading system. However, he also expressed a bit of concern about China. He explained that the West made a “Fukuyama Fault” by making the assumption that China would eventually liberalize politically when they were accepted into the GATT and WTO after liberalizing economically. He believes that China’s failure to protect human rights, workers rights, and intellectual property rights should not be permitted. Yet, he does not agree with the US approach to dealing with these issues through the application of bilateral tariffs. Rather, he is of the opinion that Chinese violations of WTO standards should be addressed legally through a rules-based multilateral system. He explained that even though the EU may be gaining benefits through Chinese trade at the moment, it is important to take a long-term view, stating “if we continue to ride the Chinese tiger, we will eventually be eaten.”
On the topic of eurozone reform, Garicano was not afraid to voice criticisms of the current EU policies toward economic convergence and fiscal harmonization. He is of the opinion that the inequalities between regions in the EU is not acceptable and serves to feed the fire of populism. He emphasized that the EU needs to focus more on creating strong institutions in struggling regions because this will lead to the innovation and investment needed for better economic growth rates. He also advocated for the EU to eventually adopt a eurobond in order to increase the power and safety of the euro for investors. To conclude this section of the debate, he criticized the current stability and growth pact mechanism for fiscal harmonization. He explained that, under the current system, there is a failure of communication with member states that serves to breed populism. When Italy is told that they cannot raise pensions because “Moscovici said so,” a lack of trust develops between the EU and the states susceptible to populism. He thinks the EU needs to create a more democratic system for fiscal harmonization while maintaining the technocratic aspects of the current system.
Lastly, Garicano discussed industrial and competition policy. He stated that the biggest success of the EU is its competition policy because it allows for equity and a healthy relationship between government and business. He explained that even in the face of enhanced competition in digital platforms from China and the US, the EU should not try to create “champions” but should rather focus on maintaining a strict competition policy and regulating digital superpowers in such a manner that data is shared and the “winner take all” tendency in digital business in mitigated. Additionally, he advocated for increased research and development funding and the maintenance of ethical standards in AI production.
Overall, Garicano’s platform was quite interesting and offers an interesting perspective on how to qualm the tide of populism that he fears will continue to rise in Europe if not addressed soon.
This event was part of a series of talks and debates with Europe’s Spitzenkandidaten and political leaders. Journalists from the FT, along with a Bruegel Director or a senior scholar, explored and challenged the main political parties’ policies for the future of the continent in front of an invited audience. The events were livestreamed on the Bruegel website. For more events, see here.