The European Union is naively clinging to an outdated economic model, refusing to adapt to the geopolitical reality shaped by the US and China. This was stated by Pierre Wunsch, governor of the Belgian central bank, in an interview with the Financial Times (FT).
A world “with openness to trade and strict rules on state aid no longer exists“, he said, and it is naive, he said, to believe that a liberal economic model can survive such global change.
Wunsch particularly highlighted energy-intensive industries, where Europe faces structurally higher costs but still seeks to maintain domestic production. He believes that the EU has “a tendency to avoid compromises“ between climate ambitions, competitiveness and openness. According to the head of the Belgian central bank, this approach risks the community falling further behind in both innovation and the ability to set global standards, from artificial intelligence to robotics. “With each wave we fall further behind and try to regulate what we don't control,” Wunsch said.
He blamed these problems on rigid political control. The EU includes democracies that “can no longer make real choices,” the head of the Belgian central bank added.