The Georgian Dream party (Ivanishvili) claimed a 54% victory in the voting, getting 89 mandates out of 150 (that is not enough for constitutional changes.).

The four major pro-western opposition coalitions also claimed they won the elections in total, though the official count was 40+% of their total votes. The preliminary polls suggested a big win for the opposition, the GD announced 12% more than polls indicated, – while around 8% less for the opposition groups.

It is believed that there were hundreds of violations of the election law observers documented but for the first time in Georgia’s independence after 1990 courts did not support any such claim.

Observers prove that there was widespread violence around the voting stations against the observers, the GD ruling party (regarded as pro-Russian) used administrative resources in an unlimited way and much money was used for vote buying. GD also used the votes of the emigrated Georgians who were neither able to return home nor take part in the voting in the very limited number of voting stations abroad.

Total number of emigrated Georgian citizens is about 1 million, all voters. Only 30 thousand of them were able to vote at the consulates (out of 112 thousand registered – the opposition had a huge victory in the abroad vote). So the other votes were easy to steal. The vote buying and stealing was most easy and widespread in the biggest but the most economically vulnerable regions that are also champions of emigration and leaving at the expense of remittances and government assistance.

In 2/3 of the voting stations, the constitutional rule of secret voting was fully violated. Therefore, the voting on October 26 cannot be called elections according to the Constitution of Georgia.

The so-called electronic system (using the technology of the Venezuela-founded, US/international company Smartmatic) needed special ballot papers but instead, the paper that was used was not suitable for the special markers and it was possible to easily see the votes on the reverse side of the ballots.

In fact (one of the judges made an experiment and supported this claim, but the appeals court then annulled this decision) the choice of any voter was visible and it was possible to see who a voter chose. Very sadly but interestingly we see no investigation against the company if they assisted the GD in stealing the votes (or it was a fully local initiative – in both cases the Smartmatics bears a high responsibility, at least for hiding.)

Because of such violations the opposition and the President of Georgia refused to recognize the results of the “elections”, nor the international organizations or major democracies. The nations that recognized the election results include the PRC, Russia, Venezuela, and Nicaragua (plus neighbors and of course Russia and PR China).

The opposition refused to enter the parliament and most of them already officially abandoned their mandates.

The EU Parliament adopted a resolution that rejects the results and calls for new elections under international supervision.

From the night of Nov 29th protests erupted in several places in Georgia. In answer, the de facto prime minister announced the government’s suspension of Georgia’s EU membership bid until 2028 (understood by the Georgian public as a full rejection of membership).

During several days and nights, the protests were dispersed at around 7 am by a very violent force of police and special units. They beat up, used water/pepper cannons, and shot tear gas toward the peaceful manifestants, including women, children, journalists, and opposition political leaders. Tens of journalists were severely injured and many of them are still in hospitals.

So far the GD government achieved two results: 1. The election lost its meaning in Georgia. 2. Police can take any violent measures without punishment. At this moment it is reported that more than 400 people were arrested, beaten, injured, and wounded. Further increasing tensions can result in an unreturnable situation. Media reports that courts approve all the claims of the police against the protesters, mostly even without any evidence.

The violence was initiated by the riot police when they poured cold water with some poisonous content on the protesters. After they faced resistance they started beating and arresting the peaceful protesters. On some of the days, protesters also used fireworks against the robocops and shot toward the parliament building – this was used by the authorities for their propaganda saying there were revolutionary attempts.

Police brutally arrested some of the prominent opposition party leaders and accused them of the same blame for disobeying the lawful orders of the police. Such brutality and unconstitutional actions of the authorities increased the number of protesting people despite very cold weather conditions.

The results of the voting without all vote stealing were mostly in accordance with the dissatisfaction of the voters. They were alarmed by 2023 and 2024 protests against so-called Russian Law – or Transparency of Foreign Financing. Despite historically huge numbers of protesters, parliament adopted that law in June, which sent a clear signal to the voters where the ruling party was directing Georgia.

As it was noted, the polls by international companies predicted the Opposition four groups to win over the ruling party. That somehow made the campaign more ceremonial than practical, creating an illusion that the victory would be easy. Less attention was directed to meetings with voters, thorough observation was only possible in the capital and some more places. That encouraged the GD and the government to use several methods of fraud. Many protested violations of election law were not easy to prove and to prove they could have sufficient impact on the results was still difficult. The election law and the rules adopted some months before limited full control of the election process for the opposition parties and CSOs.

It is also clear that the parties and the observers were not ready for the new election system of party lists – the first time for such a system to be used. Converting the party campaigns from the previous system of parallel lists and district candidate voting to the full party list campaign required at least more unity of the opposition and a higher frequency of communication with voters in the entire country. The ruling GD party on the other hand worked to eliminate miscommunication and miscontrol.

Party programs (which I discussed with their representatives, except GD) with the Radio Liberty (RFE/RL) were not interesting, just bunches of populist promises – people were not attracted much. The GD party’s most important promise was that Georgia avoided a war and combined with a promise to prohibit opposition parties if it had a constitutional majority were the two major topics of their campaign. In total the election campaign was quite boring and inefficient, most of the meetings collected true believers and much less ordinary people.

What remained after the election is a huge permanent popular protest movement that is quite distanced from the active opposition politicians – several groups of business, art, cinema, theatre, IT, HR, education and training, and many others are standing together in freezing temperatures to demand re-election and release of the political prisoners. When I write this letter I hear students marching in my street. Nobody wants to live in Russian-controlled Georgia.

At the same time, this voting gave another lesson to the voters and politicians.  We can even say, there is a transition period, the new generations should appear with new freer visions, more practical and out of illusions. Voters on their side have to guess this is their responsibility and future that is voted not just political parties.

Now, many things depend on the Western leaders to hold Georgia and not allow Russia and PR China to trap and swallow. In the previous decades, we saw the opposite – night dreaming of the West and their very active and aggressive adversaries. A hundred years ago soviets used the weakness of the West after WW1, and occupied Georgia for 70 years, the same scenario must be avoided by any means.

The EU and the USA already did or promised to impose sanctions on the major players. Though the de facto leaders have their hopes connected with the inauguration of the new president of the USA – a very doubtful idea. Many leaders of the EU or its member states already emphasized their strict vision. Georgians hope the events of the 1920s will not be repeated because of the current geopolitical turmoil, – we’ll join the EU/NATO and say goodbye to the aggressives around.

Continue exploring: 

Election Rigging of the Parliamentary Elections in Georgia with Alexander Zibzibadze [PODCAST]

Global Climate, Anxieties and Perspectives for Young People

The post Georgia: Voting Is Not Always Election appeared first on 4liberty.eu.

Leszek Jazdzewski (LJ): In your recent column which you wrote for the Project Syndicate, you argue that there are at least three different ways in which Europe can woo President Donald Trump. Can you tell us briefly why and how this be done?

Philippe Legrain (PL): First of all, the reelection of President Trump is a devastating blow, not just for the United States or the EU, but also to the very idea of the West – the idea of a common sense of purpose and values between the US and Europe, and a security alliance and close economic political relations which are based on those shared values.

At the same time, we need to try and make the best of a tragically awful situation because Europe is weak. It is weak economically. Poland is doing obviously better than most, but many of its economies are struggling to grow. It is also reliant on exports. However, above all, it is weak militarily. We have collectively sheltered under the US nuclear umbrella and kidded ourselves that basically we, as Europeans, did not need to defend ourselves because no one would dare threaten us.

That illusion is now shattered. It was shattered first by President Putin’s aggression in Ukraine, and now it is shattered by the re-election of a president who takes a transactional attitude to European security at best. On some occasions, he is frankly hostile to the EU and to European countries. All that is alarming.

Therefore, the question is how do we make the best of this awful situation? I think we need to try to win over President Trump, to show him that it is in his interest to take a different attitude towards Europe than he has done in his campaign pronouncements and tweets.

In order to do that, first of all, we need to emphasize personal relations. In my piece for the Project Syndicate, I stated that the ideal person to send to woo Donald Trump was Giorgia Meloni, the nationalist right-wing leader of Italy, who is well received in conservative circles in Washington, who is lionized by Elon Musk and who, despite the fact that I might not agree with her politics, in her government has acted more like a traditional conservative (and certainly more in keeping with the interests of the EU as a whole than might have been feared beforehand) and who, crucially, has been anti-Putin and pro-Ukraine. Start with her.

Secondly, we should come bearing gifts. In this regard, first and foremost, Europe should try to avoid a trade war with the United States. This means the EU shall offer Trump something that he can declare as a win on trade – without the need to have to jack up tariffs in order to achieve it. One obvious approach is cranking up production. Even now, shockingly, the EU still buys gas in liquid form Russia. It would make sense for both sides for us to increase our purchases from the US. Moreover, we should also look at potentially reducing tariffs that the United States finds offensive – for example, the fact that we have a high tariff on car imports or on food products. That is the first step.

The second thing regards defense. In this area, Poland has been in the vanguard of taking a much more proactive approach and saying that Europe needs to boost defense spending – and there has been huge efforts in this regard, for instance, in Estonia, but much less so in France, Germany, or Great Britain. Therefore, Donald Trump is not wrong in saying that Europeans need to do more to pay for their own defense. As such, it makes sense to hedge against the probability that Trump will not come to the defense of European countries that do not spend enough in this area.

As I suggested in my article, Europe needs to go from the 2% of GDP target for defense spending to 2.5% next year – and ideally 3% by the end of Trump’s four years term. Poland comfortably exceeds that. Obviously, it is a front-line state. And if Ukraine falls, Poland is next in line.

In such a case, most pressingly, the EU must try and convince Donald Trump that to abandon Ukraine would make him seem weak. That it would not be a fantastic deal that he would secure from President Putin, but actually a terrible one. That he would look like he is cutting a running – just what he accused President Joe Biden of doing in Afghanistan. That he would have, in a sense, been outmaneuvered by another strong man that he admires, Vladimir Putin. And that China, which he cares so much about, would come to a conclusion that the United States (and Donald Trump in particular) are ultimately much weaker than they portrayed themselves. Therefore, that it is in his personal interests to actually strike a fairer deal and that – if it does not achieve the maximal objectives that Ukraine might hope for – he at least brings together a peace with security for Ukraine on not too unjust terms.

Meanwhile, many people have objected to involving Prime Minister Meloni in this process. However, Europe cannot afford to have hangups about that. On the other hand, others have said that we should not be giving gifts to Trump. But the reality is that Europe is weak.

In the medium term, Europe might grow stronger as a result of having to fend for itself. However, in the short term, we simply cannot do it as the situation in Ukraine is most pressing. And if Ukraine falls, then Poland, the Baltics, and Europe in general are in grave danger. Therefore, it is absolutely essential that any peace that is achieved in Ukraine be on fair terms that do not lead to further Russian aggression.

LJ: What should the EU’s strategy towards China be? Should it take into account the fact that we still need security guarantees from the United States? And does it mean that the trade relationship with the US (and a relationship in general) is essential?

PL: Europe is in a very difficult position. Germany in particular, and other smaller countries as well, have grown unduly reliant on exporting to and producing in China. This reliance makes them very vulnerable in the new geopolitical situation in which the EU and China are inevitably going to be increasingly in conflict whereas the US (which provides European security) is likely to take an even more hostile attitude towards the Chinese and to demand that the EU follows suit.

Meanwhile, we must bear in mind that Donald Trump is completely erratic. Whereas there was some kind of systematic well-thought-through basis to the way in which the Biden administration ratcheted up its economic and political pressure on China, it is quite possible that Trump could start a trade war with China, expect the Europeans to follow suit, and then strike a wonderful deal with Xi Jinping, which completely undercuts the European position. Therefore, it is a very difficult situation – even if Europeans wanted to engage and follow suit.

Potential economic consequences are very real. If we were to envisage a positive scenario, insofar as to say that Donald Trump imposes a 10% or 20% tariff on imports in general and a 60% tariff on imports from China, then in relative terms, the production in Europe is less disadvantaged than the production in China. Therefore, one could predict that Europe might gain from that.

However, given the fact that the Chinese economy has weak demand, they are struggling with a local government debt crisis. They are struggling with a property crisis, not unlike what we suffered in Europe 10, 15 years ago. They are reliant on having exports and a current account surplus in order to sustain growth, which may lead to export diversion and a situation in which many of the products that they were planning or hoping to sell in the United States, they would try and sell in the European Union instead.

The big difference that now exists is that, before, the European economy and Chinese economy were largely complementary (they made different products), whereas now they are increasingly competing. In some cases, they have competed so well that the European equivalents disappeared.

Solar panels are a great example of this phenomenon – at one point, Germany was dominant in the area of solar panel production, but now there is no German solar industry at all. Obviously, the production of electric vehicles (or cars in general) is a huge industry. Currently, Germany – and Europe’s car industry in general – are ill-equipped to compete with Chinese imports. I suspect that Europe is going to go down a different route to the United States, as it seems that the United States is going to shut its market entirely to Chinese EVs. Following a combination of measures (including tariffs), sales are going to be negligible. Therefore, the European strategy is going to focus on encouraging car production by Chinese companies within the EU. This way, at least some of the benefits (in terms of employment and technological spillover) will still exist.

It is ironic that we are now talking about technological spillover going from China to Europe, whereas in the past, it was always happening in the opposite direction.

LJ: On which issues Europeans could potentially work with Donald Trump to help him achieve what he really wants?

PL: We are going to have to work with President Trump because soon he is going to be the most powerful person in the world. As such, we have no choice. If we were to look for a potentially positive scenario in Ukraine – and I admit that this could be grasping at straws – what helps is the fact that it seems that Trump wants the war to be over. He wants to make it a big win and a shining example of his ability to strike a deal.

At the same time, at the moment, Russians are making steady gains, and it is possible that Trump would suggest a deal, as Vladimir Putin would outright reject it because he feels that he is winning, so why would he want to do a deal now. At which point, one could imagine that Trump was offended by the prospect and felt the need to show Putin that he meant business.

We also see some Republicans say that we could have a huge ramping up of military aid to Ukraine on a temporary basis, but simply in order to show Russians that we, indeed, mean business, and then bring them to the table once this has happened. This would be a scenario that would be extremely positive for both Ukraine and Europe. This is also the area in which we might collaborate.

Furthermore, in terms of the tariffs, they clearly are not something we could collaborate on, as – in a sense – from the US perspective, they are ‘America first’. As such, they target allies as well as perceived rivals and enemies in an equal measure. The win-wins, as I mentioned before, can be simply commitments to buy more from the US. The obvious thing to buy on a larger scale is liquid natural gas. Another one is American weapons and military equipment.

The EU is now moving forward with increasing spending on defense with joint purchasing and joint procurement to a certain extent. While I can understand why some European politicians think that this ought to be industrial policy in disguise – and we clearly need to have our own defense industry here in Europe – at the same time, it makes sense because the United States make great equipment. Buying more US military equipment also makes sense geopolitically. Poland has already been doing that, which is a wise strategy – and it is certainly a win-win.

Meanwhile, I do not think there is much that we can do domestically. It is almost impossible to deport a million people, let alone 10 million people or more, who are living with an undocumented status in the United States. Certainly, you can deport the people who have just arrived and who are being held in camps across the US border – they can be deported readily and, indeed, are deported on a large scale. However, the people who have been in the United States and living in in communities for a long period of time are hard to identify and will be extremely difficult to uproot. It is also easy to imagine how such a move could lead to civil unrest if this were to happen. Therefore, the numbers will not be as high as Donald Trump says.

Nonetheless, the issue of potential deportation is mostly about theater. Donal Trump won the first election on the basis of his slogan ‘Build the wall’ and get Mexico to pay for it. Clearly, the bit about Mexico paying was forgotten, but part of the wall which had actually already been built. Therefore, Trump needed a new slogan for this year’s presidential election, and he focused on mass deportation. As a result, an increase in deportation is to be expected. It would be nasty for some people, but it will not be on the scale that is envisioned because outside wartime nothing like this has ever happened – nor is it likely to happen.

LJ: When it comes to the issue of migration to Europe, should the EU differentiate between illegal migrants depending on where they are coming from? And what are the possible arguments for controlling the borders and introducing an open migration policy at the same time?

PL: I strongly believe in the benefits of free movement of people – not just in economic terms, but also in human terms. My mother was a refugee from Estonia. And so, my personal family history has taught me that people sometimes need to flee their country in order to stay alive, or to remain free. That is not something ignoble, but something actually fundamental.

Even though some of the people who come to seek asylum in the EU are not really asylum seekers, many others are. If we are going to have a policy of not allowing people to turn up at the border, then there need to be safe and legal means for people to seek asylum instead.

When it comes to Australia and Canada, both of them have large refugee resettlement policies, which most European countries do not. Now, there has been a big exception made for Ukrainians, which is fantastic, but there are also other places where desperate people need resettlement.

As regards the political context, the global context is that almost all asylum seekers and refugees are in developing countries next to the country of their origin, rather than turning up in Europe. Therefore, if we are going to have a policy of tough border control, then it needs to be combined with safe and legal means for people to seek asylum.

In terms of the economic aspect, we see that even the governments that are most hostile to immigration and who cast it as a threat to their national and Christian identity (like the likes of Viktor Orban in Hungary), they tend to increasingly combine that approach with policies of allowing in foreign workers, because even they recognize that allowing in people to do jobs that locals either no longer want to do or cannot do is beneficial. There is a similar disconnect in Italy, where there has also been a large increase in economic migration under Giorgia Meloni.

Meanwhile, Poland, even under the previous government, has been allowing in migrants from elsewhere to work. If you live in a relatively rich country – and Poland is now a relatively rich country too – which has increasing numbers of elderly people that need to be cared for, while at the same time dwindling numbers of young people who do not particularly want to do all work caring for the elderly, with citizens that would like some help in paying the taxes which are going to pay for the healthcare and social care of the elderly, a country that increasingly wants to compete internationally (for which it requires talented people, not all of whom were born educated in that country), then that openness to migration is necessary for economic growth.

We can see that within the European Union. The country where I was born and lived in, the United Kingdom, has been a huge beneficiary of migration – not least from Poland, but also from many other countries. We can see that in terms of new companies that migrants found, as well as in terms of new ideas and Nobel Prizes generated and won by people who were born abroad. It is also visible in terms of the way that a whole range of public services on which people rely, and which disproportionately employ immigrants.

This is why it is important to engage with the political and cultural objections to migration. And, yes, if there is to be control, there needs to be alternatives to crossing a border which are safe and legal. And, yes, politicians need to be honest with people that if you want to have a thriving economy in the 21^st century, then you need to be open to foreigners to a certain or a larger extent in a whole range of sectors and industries.

LJ: Ten years ago, your book European Spring: Why Our Economies and Politics are in a Mess – and How to Put Them Right (2014) was published. How do you see your observations from that time now that a decade has already passed? Is there anything you would change in light of the crises that have occurred in the last ten years?

PL: I think that the book has aged well. Given that it was deliberately broad in its scope, I covered many of the issues which are still relevant today. Now, the crisis in the euro zone is behind us and, therefore, we can see that the EU institutions and many governments have recognized that the policies they pursued during the crisis were mistaken.

Therefore, implicitly, I was right in stating that most of that fortunately is no longer a pressing issue, although one cannot rule out – given the fact that the Eurozone is only partially complete – that a revival of a financial crisis in the Eurozone could happen. One example of that would be France. If you continue to have French governments running large budget deficits, and on top of that you have potentially the election of President Marine Le Pen of the Eurosceptic National Rally in 2027, it is not inconceivable that we could see a financial crisis in France. In terms of the reforms, the economic and political reforms which the second half of my book advocated for, it is striking how little has been done.

One of the things that I did say in the book was that actually Germany was much less of a success than it seemed at the time. That, actually, it had not reformed, but rather it had merely engaged in cost cutting (mostly at the expense of German workers and its neighbors in the Eurozone) and that, ultimately, this was a self-defeating strategy. It was not investing enough, its companies were not flexible enough to deal with dramatic technological change, and it was too reliant on exports. I think that this analysis was perceptive and, indeed, right.

The biggest challenge facing the EU is that – even though the global economic and financial crisis is long gone (and you’ve seen growth rebounding in the United States and many other countries, that, again, Poland is doing much better than Germany or France) – growth has been sluggish in the EU as a whole. Especially in hugely important sectors (technology as a whole, and AI in particular), the EU barely has any presence at all.

You can live quite well as a museum if you are small. In Venice, for example, it is not particularly nice for the residents to be swamped by millions of tourists, but economically and financially, the city is doing okay. A continent as a whole cannot live as a museum, not with high living standards and certainly not in a way that is appealing for young Europeans to want to stay there.

This is not to say that there are no fantastic things about living in Europe, because there are. And I am not saying that we need to become the United States lock a barrel, but we do need to have much more dynamic economies. The lack of reforms to generate growth, which Mario Draghi recently pointed to (and which European Spring pointed to beforehand), is deeply troubling and ultimately unsustainable.

Find out more about the guest: philippelegrain.com/

Check out the publication discussed in the episode: www.project-syndicate.org/commentary/u…rain-2024-11

This podcast is produced by the European Liberal Forum in collaboration with Movimento Liberal Social and Fundacja Liberté!, with the financial support of the European Parliament. Neither the European Parliament nor the European Liberal Forum are responsible for the content or for any use that be made of.

Continue exploring:

Election Rigging of the Parliamentary Elections in Georgia with Alexander Zibzibadze [PODCAST]

Strategic and Geopolitical Vision of the EU with Nicu Popescu [PODCAST]

The post EU Response to Trump with Philippe Legrain [PODCAST] appeared first on 4liberty.eu.

Among those who took part in our survey, positive associations predominated: capitalism means poverty reduction, efficient accumulation of resources, and freedom. We can find confirmation of these observations in Johan Norberg’s book.

Does Capitalism Reduce Poverty?

There is a belief among some that capitalism only fuels the growth of poverty. In his book, Johan Norberg frequently refers to the economic transformation that has taken place in many countries and points out that “contrary to the World Bank’s claims but according to its own data, seemed to have decreased from 38 to 29 percent in the 1990s.” Interestingly, the situation is improving all the time, as the poverty rate fell “from 29.1 percent of the world’s population to 8.4 percent” between 2000 and 2022.

Norberg devotes considerable attention to examining the relationship between the degree of freedom of an economic system and the wealth of a society. Comparing the 25 percent of countries with the most liberal economic systems with the 25 percent of countries with the least liberal approach, it can be seen that GDP per capita in countries with greater economic freedom is more than seven times higher, while extreme poverty, in countries with more restrictive economic rules, is sixteen times higher.

Efficient Use of Resources

Norberg argues that economic liberalization forces participants in many activities to consider not just the appropriate distribution and utilization of resources, but also their appropriate accumulation. As prosperity increases, less and less of our consumption is about material goods and more and more about services, such as care, entertainment, education, research, or design. This is because “the automation of manufacturing means that we can devote a shrinking share of our purchasing power to its products.” Thanks to this phenomenon, more and more attention has begun to be paid to human resources.

As a result of the liberalization of economies, as well as democratization, workers’ rights have started to be taken care of and their work is more valued. It is also often argued that, as a result of the automation of the production process, there will be fewer and fewer jobs and it will be more and more difficult to find one’s way in the labor market, especially for those who were predominantly engaged in manual work. Johan Norberg argues to the contrary.

“Instead, automation creates complementary industries and frees up purchasing power to hire more people. Current research shows that an increase in automation in a factory by 1 percent actually increases the workforce there by 0.25 percent after two years and 0.4 percent after ten years.”

How Do We Create Reality?

One person attending the Freedom Games wrote: “Capitalism is my reality”. This seemingly obvious statement aptly reflects the essence of capitalism, in which the individual shapes his or her own reality. It can be applied to different spheres of life, in particular finding oneself in the labor market.

Johan Norberg notes that “the free market was the sort of economy that followed when people were given the right to shape their relationships and collaborations and to exit them if they became exploitative.” Although it is not perfect and instances of exploitation, bullying and other inappropriate behavior towards workers do occur, workers’ capabilities are increasing thanks to capitalism. One can also observe the increasing proficiency of the young, who, thanks to the diverse range of universities, both public and private, have the opportunity to train for their chosen profession or create jobs themselves.

The basis of capitalism is the principle of reciprocity, which Norberg interweaves through “The Capitalist Manifesto”. Opponents of the free economy claim that the system works against the consumer or worker because it only favors the profit of the rich. This is not true because, as the author of the “Manifesto” points out, capitalism is “the only system that meant that, if you were to earn anything, you had to serve others and give them the goods, services, and rewards they wanted.”

Continue exploring: 

How to Fix Capitalism [PODCAST]

Global Climate, Anxieties and Perspectives for Young People

The post How Do Freedom Games’ Participants View Capitalism? appeared first on 4liberty.eu.

Forbes: You are the biggest Polish investor in the United States.

Arkadiusz Muś: In terms of greenfield investments, yes. We are just in the process of expanding our second plant in Virginia, which specializes in the production of insulated glass for commercial buildings, primarily offices. If we add our plant in North Carolina, the total cash invested in our U.S. production capacity will exceed $220 million. Last year we were even personally congratulated on this by Virginia Governor Glenn Youngkin. He told us that, being a Polish company, we had made the largest capital investment in Henry County’s history, making a valuable contribution to the revival of industry in the region. This year we will achieve $160 million in sales overseas.

You seem to be blazing a trail. In August, Sebastian Kulczyk‘s Qemetica (former Ciech) announced the acquisition of a US stoneware manufacturer for $310 million.

I think this is happening, but it will be an acquisition. We spent ten years building our business in the States almost from scratch, based on a small family business found for us by local consultants.

In the United States, everyone is living through the recently finished presidential election. What is your opinion on Donald Trump’s election?

I am a classical, pro-free market liberal and I have always been closer to the Republicans than the Democrats. But in this election I had fingers crossed for Kamala Harris because she was more predictable and a better candidate from a geopolitical point of view. But if you look at it purely from a business perspective, the better option seems to be Trump.

He based his campaign on restoring the splendor of the American economy, because, unfortunately, inflation, social stratification, and the flight of industry from the US have led to the impoverishment of society, which is strongly felt, as can be seen even on the streets. The good life here is only on the coasts. There is a lot of stagnation in the interior or the so-called deep south. And Trump has sensed this mood better than the Democrats.

I myself have talked to many American business people, and almost all of them supported Trump’s “Make America Great Again” slogan. By cutting taxes, Trump wants to leave an additional $8 trillion in the economy, financing this by slashing red tape and, above all, raising tariffs on Chinese products. Some of his supporters are eager to compare him with Reagan and his reforms, which unleashed the US economy in the 1980s. And this is, in my opinion, a viable scenario.

Why did you start investing in the U.S. in the first place?

In Poland, many entrepreneurs proudly talk about foreign expansion and then they enter the Czech Republic. But if you have ambitions to build a global company, you need to tap into the potential of the United States. 

Twenty years ago Press Glass became the number one player in Poland, but we had zero exports. It took us another 15 years to fight to become number one in glass processing in Europe. And when we achieved that – or even five years before that – I decided that the natural next step needed for our growth was to enter another continent and there is no better place to do business than North America. With nearly 400 million consumers in the U.S. and Canada speaking the same language, it is a country with a deep-rooted liberal democracy, the largest water and energy resources, and borders Mexico to the south, with a population of more than 125 million.

But the States – as an investment destination – are not very popular among Polish companies.

I think this is due to fear of the unknown. The states are far away, so making such an investment seems more difficult to control. But once you get in there, you quickly learn that this is not the biggest difficulty. The biggest challenge is the fierce competition. It is far more difficult to identify any market niche to enter there than in Europe or Poland. America experienced its last big boom in the Reagan era, and before that, after the war under Eisenhower, with the construction of a huge highway system and all the infrastructure. There has been stable growth there in recent years, which is incredibly competitive because everyone is looking for a way to survive. Therefore, in order to invest in the United States, you need a strong organization and an awareness that it won’t be easy.

What do you need to be prepared for?

For the fact that in the first year, you add $10 million to the business, in the second year $17 million, and after 5 years you see minimal profits. You need the capital to survive it. In the US, we have set our sights on the state-of-the-art and theoretically most profitable glass façade market for office buildings in Manhattan. Two years ago we reached almost 12 percent EBITDA margin, but this year the market has slowed down a lot and we will earn 4-5 percent.

Entering that market, did you have a vision and a sense of market advantage for a Polish company unknown there to conquer America?

We have relied on what has previously worked for us in Europe. However, in the US, because of the competition, we have to do it even better and more efficiently.

Then what is your advantage?

In this business, seemingly everyone has access to similar machinery and technology, but we made our leap with an approach to development and organization of production. We have 15 factories and in building each plant we eliminate mistakes from previous investments, work with technology suppliers, automate, and introduce new management programs.

How does it work in practice?

This family-owned company, which we took over when we entered the US, employed 170 people, making mainly not glass for office building facades, but smaller interior glazing. Today we have 550 people working for us in both factories, with production increasing eight-fold.. Similarly, we have raised efficiency in our Welsh plants, converting three factories into one modern plant, with production capacity 50 percent higher and employing 1/3 fewer people. We have a major competitor in the US., They are two and a half times larger than us. But they produce these windows in 40 obsolete plants. You can imagine what costs they must have.

Aren’t you frustrated by the fact that conquering this market is taking so long and after ten years you are still worried about margins and profitability?

Absolutely not. We are consciously ahead of certain trends, which is initially costly, but thanks to that the future belongs to Press Glass. America is technologically obsolete in certain areas because they had very cheap energy and didn’t have to save money. And Manhattan is a concrete jungle. This is the result of the fact that commercial glass manufacturers fought an unequal battle for years in New York against the extremely strong concrete and cement lobby. They were blocked.

But this is changing, the comfort offered by buildings with large glazing and access to lots of natural light is taking over. There is a growing awareness of energy conservation and carbon efficiency. Americans are changing their approach, reaching for better quality products, like quasi-European products, in the construction of state-of-the-art office buildings. And that is where we come in with our insulated glass. We just won a joint bid with Aluprof to glaze the iconic Flatiron, a distinctive triangular office building from 1902 at the intersection of Broadway and Fifth Avenue, now an apartment building.

How much longer will it take Press Glass to conquer America?

We need another 10 years. But I follow the saying: “If you do not plant this tree today, you will not be sitting in its shade in 20 years.” I have invested, I have taken a risk, but I think America will help double or triple my business.

The biggest surprises?

Certainly in Europe, we live with certain myths about America. For example, I was strongly surprised to learn that getting people to work in our plants has proven more difficult than in Europe. We have our factories halfway between New York and Florida. It seemed to me that here people would be ready to come even from Chicago for work.

I understand that this was the case decades ago, at the time of the creation of the great American novels.

Exactly. We had to look for people locally. Virginia is an agricultural state famous for growing tobacco and corn. We recruited a crew of several hundred people among farmers and we had to teach them everything in our industry. On top of that, there was a very large ethno-cultural dispersion – our people speak more than a dozen languages. We have everyone from Lithuanians to Chinese and Puerto Ricans. I was also surprised by the bureaucracy and tax complications, given their commitment to economic liberalism. For example, a driver traveling with goods across four states must file four different returns.

And what would you have done better? What were the biggest mistakes made with this investment?

I sent an overly large team of 20 people from Poland there to fill key positions, and I should have focused on hiring local workers by then.

The Poles were supposed to give you security and a sense of better control over your investment overseas.

Yes, but that turned out to be illusory. What was more important than my sense of security was to do business there faster, and for that, you need local people who know the local market well.

Do you have to go there often?

Against all odds, I do not have to, but I also go there for sport…

…meaning golf?

Yes, in the USA they have great courses. And I only visit the company on occasion…(laughs). But in fact, I am such a rare visitor there that they do not even recognize me at the plant gate. I am not particularly needed there for anything, anyway. The technological changes that have taken place in the last 20 years are incredible. This is a completely different product than when I was managing Press Glass on a more operational level before we went outside Poland.

Then what is your job today?

Thinking about where we will be in ten years, planning investments, and looking for markets where we want to be present. And on finding the competitive advantages with which we want to do it. And on light coaching of my people so that they understand our strengths and where we are heading as a company.

Arkadiusz Mus, entrepreneur, Chairman of the Board of Press Glass Holding, and founder of the Economic Freedom Foundation.

The text was originally published in Polish in Forbes 12/2024 issue. Interview by Piotr Karnaszewski.

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The post American Dream of Polish Billionaire appeared first on 4liberty.eu.

Leszek Jazdzewski (Fundacja Liberte!) talks with Alexander Zibzibadze, Chairman and Founder of the youth educational organization Georgia’s Future Academy (GFA). His leadership of the GFA, the renowned youth network Franklin Club and wider civil society has been instrumental in organizing two large-scale protest waves against the so-called “Russian foreign agents law” in March 2023 and April-June 2024. After the protests, he was one of the initiators to establish the “My Vote for the EU” coalition, the largest election observation mission for the 2024 Georgian Parliamentary Elections uniting more than 20 leading NGOs. After the protests, Alexander has also emerged as a prominent civil society leader and a national and international media commentator.

LJ: The October elections in Georgia effectively resulted in the victory of the party that has already been in power for over a decade, the Georgian Dream (GD). As a consequence, the opposition parties accused the ruling party of stealing the election and it seems that the observers share this view. These were not minor incidents, but rather major action on behalf of the Georgian Dream aimed at altering the result of the election. Does this mean that the current government is illegitimate?

Alexander Zibzibadze (AZ): Usually, when talking about electoral manipulation and election rigging, especially in terms of Georgia, we split these actions into two parts. The first part regards all the manipulations which happened before the electoral day. The second one happens on the electoral day.

When it comes to the ones before the election day, the usual strategy is based on using administrative resources to mobilize voters. For example, the government may require all civil servants and their families to vote for the government. Moreover, when those people vote, they have to take a photo with their phones of the ballot and later may need to show it as a proof. Otherwise, they may lose their jobs in the future. There already are a few confirmed cases of people who were fired after the elections because they could not provide the proof (because they voted for the opposition).

The same is being done with regard to the people who are dependent on the government because of different social services. Those people are also required to bring the proofs of voting for the government. This is one of the strategies.

Sometimes governments may use weird or crazy schemes to achieve the desired result. For example, when it comes to the families who have relatives in jail, if they mobilize enough voters for the ruling party, their family members are being pardoned. This was the case of one of my colleagues whose family member is in jail – his family was asked to collect 200 votes and if they managed to do so, their relative would be released three years before the end of his sentence. These types of manipulations do happen.

This year, a new scheme was also invented by the GD party – confiscating people’s IDs in advance. As a result, the people who were known to be leaning toward voting for the opposition were approached by the security services, who confiscated their IDs –  and without you ID, you cannot vote in Georgia.

Apart from that, we could also observe a number of different scare tactics, manipulation, and sometimes even vote buying. All this usually happens before the election day. In Georgia, we are used to it. It is our normal.

The second part happens on the electoral day itself, which this year was on October 26. What we saw on the election day revealed an unprecedented scale of manipulations and rigging that we have never seen in Georgia before – or at least since 2003, when the Rose Revolution took place.

We observed tens of cases when the same people were voting in different polling stations, people voting without IDs, or people were voting instead of other people. Most likely, those were probably the IDs which are confiscated from opposition voters or individuals who were randomly voting for other people.

However, an even more important and evident violation that was happening on the electoral day was related to the secrecy of vote. The new electoral system that was introduced in Georgia involves digital counting machines, which we did not use before. The ballot was constructed in such a way that opposition parties were at the top of the ballot, while the GD candidates were at the bottom. As a result, when voting, you would have to color with the marker the circle of the party which you wanted to vote for, which made it possible for everyone in the polling station to see who you had voted for based on the composition of the ballot – and whether you voted for the government or not.

The secrecy of the vote is one of the major electoral principles, so this is a very big issue. It was especially visible in the rural area and small towns in Georgia, where people are very concerned about the secrecy of their vote – which was, basically violated for 90% of Georgian citizens. As a result, many people were simply scared and, as a consequence, voted for the government because they thought that their vote would not be secret.

Moreover, we also observed the so-called ‘carousel voting’, when people go from one polling station to another voting multiple times or voting instead of other people. There were even some cases of ballot stuffing – one of our observers recorded a video of somebody in Marneuli (a district with ethnic Azeri minorities) was stuffing the ballot box with tens of ballots.

The extent of these kinds of voting manipulations is unprecedented for Georgia because until now, most of the vote ringing and manipulations were happening before the election day. This time, according to statistical analyses conducted on the polling stations on the election day, when we compare it to previous years, there are some crazy irregularities. For example, in one of the districts, in the last election, the government party received 47% of all votes, but this time they reportedly received 72%. Basically, all of the organizations (Georgian NGOs and opposition parties, as well as the OSCE, the International Republican Institute, the National Democratic Institute, among other international organizations) which looked at the polling numbers clearly said that such election results could not be achieved if the voting was conducted freely and fairly.

LJ: Given that it seems that the electoral fraud is evident, why have the OSCE or other organizations not clearly labelled it as such?

AZ: One thing which the Georgian Dream government is good at is that they do not operate like most of the authoritarian regimes. They do not claim to have received 70% or 80% of the votes in favor the ruling party. Meanwhile, in Belarus, Lukashenko would always say that he got 80% or 90% of votes. In Russia, Putin would always get more than 70%, because this is the number he feels is important to show to prove his legitimacy. In Georgian Dream’s case, 53% was the official result which was announced in the end.

The second thing is the relationship between the Georgian state and the Western institutions. Basically, everyone stopped short of calling the election rigged, but at the same time, nobody called it free and fair. The European Union and the United States demand an investigation to be conducted by non-partisan international actors. However, the Georgian Dream does not want to comply.

Meanwhile, when the OSCE made its first statement the day after the elections, on October 27, a lot of evidence was still being collected. We spent the last months compiling all the evidence and sending it to all our partners, which was a very important process because it took a lot of time to process all the videos, photos, protocols, and all observations. In many cases, we had to take the matter to court.

LJ: What is going to happen next? Is there a scenario in which those elections might be repeated or considered invalid? Or will the Georgian Dream stay in power?

AZ: Three of the four opposition coalition parties have already withdrawn their list. Another one has just submitted it. Georgia is now entering the period of a long-term political crisis. For the first time in the Georgian history, we are going to have a one-party parliament. Since gaining our independence, we have always had at least two or three political parties in the parliament. Now, the GD is alone in the parliament.

As the Georgian Dream party is trying to consolidate their power, they are moving really fast. They have already nominated the new cabinet, with the programs of four out of 13 ministries have been discussed by the parliament in less than a day. The ruling party also announced that they will hold the new presidential elections on December 14, which means that the new president will be elected by the end of the year as well.

At the moment, the election results are being contested. The president and CSOs appealed to the Constitutional Court, as the Georgian constitution clearly states that the parliament should not assemble if more than one-third of MPs’ legitimacy is being questioned in the courts. At the moment, all 150 MPs are being questioned, but the GD still proceeded with the first parliament session in an attempt to consolidate their power by the end of the year.

If the opposition does not manage to enter the parliament, it will result in a one-party parliament. At that point, the opposition will probably try to make sure that an international investigation is conducted. In case the international investigation comes to the same conclusion as Georgian NGOs – that the elections were rigged and do not represent the will of Georgian people – it would put pressure on the Georgian Dream to hold snap elections. This is likely the goal.

However, it is also very important that the snap elections are conducted by a reformed Central Election Commission. At the moment in Georgia, only the ruling party appoints the people who conduct the elections, which makes it a very partisan process. Moreover, because of all the election rigging and irregularities in the process this year, there is no public trust in the electoral commission. Therefore, obviously, it needs some kind of a reform, but it is still difficult to say what kind of reform there should be or who should conduct those elections. Nonetheless, before holding a new one, if we want it to be free and fair, we definitely need to change the people who conduct the elections.

Meanwhile, the protests are not as large in scale as they were during the spring, when we were protesting against the so-called Russian foreign agent law. It is understandable because a lot of people are now frustrated. We were protesting for two months in spring, on a daily basis, nonstop. Back then a lot of people hoped that the election would be the process which would result in change.

Now, because the protests did not bring any change in the spring and since the elections were rigged, usually people need some time to process the reality and understand the situation better. Nevertheless, the protests are still going on, which is very important because it puts the pressure on the Georgian Dream party.

LJ: How has the Russian war in Ukraine changed the context of the elections in Georgia? And what is the Georgian Dream’s attitude toward democracy?

AZ: At the moment, even Armenia is more democratic than Georgia, which is strange. Back in 2015-2017, when we were attending different conferences and meetings in Brussels and in D.C., we were always asking our European colleagues (especially when they were discussing the Eastern Partnership) if it was possible to have Georgia discussed separately without Ukraine and Moldova. The reason for that was that, as Georgians, we have always felt that Ukraine and Moldova were kind of the brakes on our European integration.

Georgia had been doing a lot of institutional reforms and was further ahead than those two countries, especially in terms of dealing with corruption, among other issues. However, now, the situation has changed completely – and the Russian war in Ukraine had a lot to do with it.

The foreign policy of the Georgian Dream has been based on an attempt to trying to sit on two chairs at the same time – one chair being Western or European integration and the second one being Russia. However, after the war in Ukraine started, while the EU and Western world in general tried to distance themselves from Russia as much as possible, it became impossible for the Georgian Dream party to continue to sit on these two chairs simultaneously, because they would eventually fall onto the ground.

Georgia has never joined any sanctions against Russia. We had a lot of opportunities during the war to finally get the defensive weapons Georgia really needed to protect itself from a potential Russian aggression, which before the war in Ukraine had not been provided by our Western partners. After the Russian invasion on Ukraine, the United States and Europe became more keen to discuss providing Georgia with different types of defensive weapons. However, the Georgian Dream did not want to make Russia angry, and so they refused to get any defensive weapons as a result.

There is also extensive evidence to show that Georgia has been used to help Russians to go through the sanctions imposed on them. For example, the export of cars from Georgia into Russia had increased significantly and stopped only after Europe and the United States intervened. However, now we export all these cars to Kyrgyzstan and Kazakhstan and, from where all the parts that are sanctioned by the Western countries are going into Russia anyway.

The war in Ukraine has played an important role in the strategy of the Georgian Dream. As a result, the party started to get more and more authoritarian, as they tried to destroy the so-called ‘freedom islands’ in Georgia. They went on a crusade against the media that had been critical of them and improved the censorship mechanism. They also passed the Russian Foreign Agent Law (which resembled the law passed in 2012 in Russia), which will start fully operating since January 1, and which will make it almost impossible for most of Georgian CSOs to operate in the country.

Moreover, the Georgian Dream has already announced that they are planning to submit the appeal to the Constitutional Court to ban all opposition parties in Georgia, which looks like a very authoritarian move. We are already considering Georgia to be an electoral autocracy, which is very alarming for many of us because there are no independent institutions left in the country (with the sole exception of the president).

LJ: What should be the future strategy of the European Union in regard to Georgia? What will the forthcoming presidential elections bring?

AZ: Regarding the presidential elections, for the first time in the history of Georgia, the Georgian Dream party changed the Constitution and now the president is not being elected by the people anymore. For the first time, the electoral college – which consists of the parliament and local councilors – will elect the president. Moreover, the GD party has a significant majority in the parliament, which means that they would be able to elect whoever they want.

Regarding the opposition strategy, what opposition should do is, first of all, not give the legitimacy to this parliament. At the moment, it seems that none of the opposition party will be taking their mandates. Secondly, pressure should be constantly put on the government. As such, the current political crisis requires working with our Western partners, but also, and even more importantly, organizing protests in Georgia. As a consequence, the government should be constantly feeling the pressure from the opposition and the civil society through massive protests. The goal is for the government to agree to hold snap elections.

Regarding our Western partners, it appears that the prospect of Georgia’s further European and NATO integration is closed for now. Currently, many discussions about suspending also Georgia’s candidacy status or potentially being a member of the Schengen area. However, punishing ordinary Georgians is not the best way to go forward.

What the West should collectively do is to, first, think about how they view Georgia and if Georgia can be a strategic partner for Europe based on values. The best way to move forward is to continue with the targeted sanctions regime – which the United States has already introduced against some of Georgian officials, including some of the Georgian judges, as well as the head and the deputy head of the police, and numerous MPs. The European Union should also join Americans in this effort because it looks like the people who rigged the elections in Georgia are still enjoying all their freedoms, and their families are still freely traveling to Europe, doing shopping, and enjoying all the perks and benefits of the Western civilization. At the same time, they keep telling Georgians how the West is bad, how it is trying to drag Georgia into the war with Russia, and spew other kinds of unfounded propaganda.

It has become clear that further integration is not possible if the election rigging, and authoritarian-style laws are not addressed properly. The European Union and the United States have to be very clear about this in their statements, so that they do not leave any room for interpretation by our government, as it will try to interpret it in their favor.

The West should also examine the development aid given to Georgia and refocus it to strengthen the civil society, pro-democratic and pro-European activist groups, and to no longer support the Georgian Dream regime, which often uses those funds to crack down on democratic activists (for example, the Georgian security forces were trained by means of using the funds allocated by the USAID).

Finally, both the United States and the EU should be clear and definite in regard to the imposed sanctions and in what they expect of the Georgian government. The messaging surrounding this issue should clearly focus on withdrawing support for a non-democratic regime and increase the support of pro-democratic groups. Such an approach should, hopefully, at some point lead to snap elections.

This podcast is produced by the European Liberal Forum in collaboration with Movimento Liberal Social and Fundacja Liberté!, with the financial support of the European Parliament. Neither the European Parliament nor the European Liberal Forum are responsible for the content or for any use that be made of.

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The post Election Rigging of the Parliamentary Elections in Georgia with Alexander Zibzibadze [PODCAST] appeared first on 4liberty.eu.

Economist

At the beginning of the 20th century, there were no separate economic studies yet, so Hayek earned his doctorate in law and political science. After reading Ludwig von Mises‘s Socialism, he began to attend his seminars regularly and became his close colleague at the Austrian Institute for Business Cycle Research, where they anticipated the Great Depression of 1929. This period spawned his scholarly interest in business cycles, which he developed in a series of works until 1945. The most important of these were Monetary Theory and the Trade Cycle (1929), Prices and Production (1931), and Pure Theory of Capital (1945).

It was his interest in business cycles that led the Bank of Sweden to recognize his “pioneering work in the theory of money and economic fluctuations and for their penetrating analysis of the interdependence of economic, social and institutional phenomena.”

Hayek believed that artificially lowering interest rates by the central bank sends a false signal to businesses that the public has more savings than it actually does. This leads to misguided, capital-intensive investments, the products of which they have no customers or cannot be completed because access to cheap money is running out.

Such a cycle, which initially looks like an economic recovery, but which in reality was an artificially inflated bubble, ends in an economic crisis, meaning massive bankruptcies and layoffs. And this is in the best-case scenario because those in power can simply lower interest rates even further and prolong the “inflated bubble,” resulting in an even bigger crisis in the future. This is akin to drinking a wedge for a hangover. It in no way helps the alcohol-poisoned body recover.

Hayek also opposed other manifestations of state interventionism. In the 1930s he participated in a famous debate on the subject with the most influential economist of the 20th century, John Maynard Keynes, and in 1944 he wrote The Road to Serfdom, in which he showed, using the example of the Weimar Republic, how increasing state control over the economy led to socialism in its nationalistic version. The book made him famous in the United States and secured him a professorship at the University of Chicago. During the war, the publisher could not keep up with printing it for all those who wanted it because of paper rationing.

The Nobel laureate criticized not only the interventionism of capitalist states but also the socialist system, which is inherently incapable of dealing with the so-called knowledge problem. Rational allocation of scarce resources requires coordination of the fragments of knowledge dispersed among all participants in economic reality. This can only be done through a system of prices, shaped by freely acting sellers and buyers. If the state decides how much of what to produce, how much should be the costs, and how much of what to sell to whom, the numerical values accompanying all exchanges do not express knowledge about the preferences of producers, customers, and the scarcity of goods. The planner under socialism must issue orders blindly, which ends in unimaginable waste and constant shortages of even the most basic goods.

Philosopher of Science And Epistemologist

The problem of knowledge is also related to Hayek’s thoughts on how the social sciences should be practiced. He opposed neopositivism, which took physics as the model for all knowledge. It is impossible to conduct experiments on large human populations. Besides, constantly acting, free and creative people generate new information all the time, which cannot be put into mathematical models. We can predict exactly how fast an apple thrown from the tenth floor will hit the ground, but it is impossible to predict exactly how market participants will behave in a given situation.

His critique of neopositivism also led him to criticize “constructivist rationalism.” By this term, Hayek meant the belief that the human mind is capable of consciously designing and enacting complex social institutions, and it is not just the central control of the economy, but also law, moral principles, or language. In fact, these institutions emerge spontaneously and evolutionarily over the years in the course of countless human interactions, and no single mind can bring them to life. An urban planner can delineate where the sidewalk should lie, but it is by the paths trodden alongside that one can see how people can move most optimally.

Philosopher of Politics And Law

Hayek advocated a liberal rule of law, in which the rules governing society apply to everyone equally and are predictable to ensure the stability of the system. In the rule of law, it is not the people who rule, but precisely the law, which restrains the inclinations of politicians and protects the freedom of all individuals. Margaret Thatcher was said to have thrown his most important work on the subject, i.e., The Constitution of Liberty, on the table during a meeting of his party and announced, “This is what we believe.”

Although Hayek is sometimes considered by his critics on the political left and right to be an extreme free-marketeer, or even a libertarian, libertarians and classical liberals in turn like to accuse him of having social-democratic sympathies. The truth is that Hayek allowed for more state action than just acting as a night watchman. He believed that the state had the right to collect taxes to meet needs that the market could not meet, and cited as examples countering the effects of natural disasters, running a national statistics office, building roads, or even providing a subsistence minimum for destitute people.

So you can clearly see that he is far from a dogmatic libertarian, but I wouldn’t call him a social democrat, or a leftist. Hayek allows various state activities or unemployment benefits not because of his love for strong state structures or egalitarianism, but simply as the lesser of two evils and some minimal concession to people with less confidence in market processes. If people feel that their need for security is unmet, they will be more susceptible to various extreme ideologies promising them paradise on earth as soon as they hand over absolute power to some demagogue.

The sense of security is, of course, a subjective and time-varying criterion, and there are risks involved. However, in essence, as long as the law is stable, and simple and prevents the introduction of de facto tyranny, we will be able to chase away from sight the bigger threats to freedom than state (local government) sidewalks.

Friedrich Hayek’s life is an inspiring example of love of freedom and reason. Far from fanaticism, able to correct his views and befriend his ideological opponents, he exemplifies for the Economic Freedom Foundation the attitude that made the Western world a little better in the 20th century. Whether in the halls of universities, on the roof of College Chapel in Cambridge putting out fires set by Nazi planes, or at meetings of the Mont Pelerin Society with other Nobel laureates and the greatest liberal thinkers of the time, he always acted in the interests of the entire civilized world. And praise him for that.

However, it is worth recalling his own words, which he said at the Nobel banquet:

“The Nobel Prize confers on an individual an authority which in economics no man ought to possess.” 

Also, if we want to take his teachings seriously, we must always, under the influence of facts, be ready to reject those views in which he and other respectable people with titles and awards were wrong. Liberals have something to celebrate, but they should by no means ever settle on their laurels.

Written by Adrian Lazarski

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Leszek Jazdzewski (LJ): In a policy brief written by you together with Laurence Boone for the European Council on Foreign Relations (ECFR), titled Better Firefighting, Reading Europe for an Age Between War and Peace, you propose recreation of a European version of the US Defense Production Act. Why do we need it?

Nicu Popescu (NP): The starting point of that paper is about the need for speed in our administrative decision making. Therefore, we made a parallel to where Europe is today in terms of security with firefighting machines, police cars, or ambulances. Most of the time, these vehicles drive at a regular speed, but when there is a crisis (an accident or another incident), they put the sirens on because they need to get to the place of the incident fast. If a firefighting car, a police car, or an ambulance does not get there in time, people will die. Being slow is, therefore, dangerous.

In terms of European security, we are currently witnessing the biggest war on the European soil since World War II. In a crisis like that you need resources, defense spending, but you also need to be fast – in terms of placing orders for weapons or boosting electricity and energy infrastructure. You cannot go into a crisis situation at the regular speed of administrative procedures.

Our institutions have become extremely slow, as if they were stuck in a traffic jam. If you look at how slowly the European Union countries spend the money from the NextGenerationEU fund (a post-COVID-19 recovery fund), you will see that most EU countries have spent around a third of the money they were meant to spend. Moreover, a very tiny fraction of cohesion funds have been spent on the allocated timelines.

Furthermore, imagine that during World War II, when the Americans and the British were doing public acquisitions for the Normandy landing in 1944, that they would have used today’s public acquisition procedures. If that were the case, the Normandy landing would have probably happened in 1950 or 55 at the earliest – it certainly would not have happened in 1944. Therefore, we are arguing that we need to act fast in times of crisis.

We need to be fast at placing orders for military equipment, but also in terms of various non-military elements – in the areas of energy or infrastructure upgrades. It is not just about allocating more money (because more funds are needed), but also about using our existing funds, which should be easier to reallocate to new priorities because there is a war on the ground.

LJ: Should cohesion funds be used for these purposes? Or do we need new legislation, perhaps a new institution trying to mobilize and institutionalize it? How do you think it could be realized in practice, considering that many countries keep their prerogatives to themselves in these particular areas, and it is only in times of crisis that the EU manages to go beyond its usual pace?

NP: We totally need both. We need new administrative procedures, which might be based on laws or regulations, and we need them both at the EU level and the national level.

What we are arguing in the publication is that we need the European equivalent of the American Defense Production Act, which is a piece of legislation adopted in the early 1950s in the United States and allows the American executive to spend money fast in crisis situations. Therefore, sometimes they use it to boost research or to place orders on weapons, but they have also used it for non-military purposes. For instance, they used it to make it easier to import solar panels in the United States in the context of the need to accelerate the green transition. They even used it for baby milk.

As such, the American Defense Production Act it is a pretty flexible legal instrument which allows you to be fast in crisis situations and put aside peacetime procedures, which are typically slow. What happens in Europe is that some countries are doing it on the national level.

In 2022, in the context of the Russian war in Ukraine, Germany adopted a piece of legislation called the LNG Acceleration Act because they needed to build LNG terminals fast, not at a standard speed where you know it takes five years of paperwork before you start building physical infrastructure.

Now, in the Netherlands, there is a draft law currently discussed by the government that is more or less supposed to emulate what the US Defense Production Act is doing. However, the problem is that it is not only Germany or the Netherlands that need this kind of legislation, and it is not just in the LNG sector. We need it on the pan-European level if you want to be fast in developing cross-border projects. Therefore, we not only need to work on the legal side, but also find better ways to reallocate existing money.

Although we have unused funds in the European Union’s budget (as well as in the development banks, such as the European Bank for Reconstruction and Development, the European Investment Bank, or the Council of the Europe Development Bank), all of these banks have funds, but normally they do not have special procedures to fast track the allocation of funds in crisis situations for countries that need urgent solutions to pressing problems.

This is why this recommendation (in light of the recent news that the European Union is looking into ways to make it easier to reallocate petition funds) is a perfectly logical thing to do. This is the kind of things we all need to do, as Europe can no longer be as slow as it has been in reacting to the effects of Russia’s aggression against Ukraine, to the COVID-19 crisis. We all need to be much faster when reacting to a crisis.

LJ: The Eastern EU members without a doubt consider Russia as an existential threat to their security. This attitude is reflected in the GDP spent for defense in the Baltic states, as well as in Poland or Romania. At the same time, it is difficult to imagine that Italians or Germans would share the same perspective. Is it possible to introduce a new joint model of responding to such a significant threat without escalation of the war to the NATO soil?

NP: First of all, it is in everyone’s interest (including the interest of Italy, Portugal, or Spain) for Europe to be strong, for NATO and the European Union to survive. If the Russians continue advancing in Ukraine and if they get to the NATO and European Union’s external border (the border of Poland or Romania), then they would threaten even more the whole Western democratic institutional architecture.

Some people argue that helping Ukraine involves too many risks in terms of nuclear tensions with Russia. Actually, I would argue the opposite is true, and that the best way to minimize the future risk of nuclear tensions is by making sure that Russia does not get too close to the European Union’s border and to do so through conventional weapons. The best way to keep future risks – be it conventional or nuclear – as far away from the political agenda and the borders of NATO and the European Union is by making sure that the Russian army is as far away from NATO/EU borders as possible. And the only way to do that is by helping Ukraine with conventional weapons supplies.

This is a sad reality, but it is definitely a factor. The way in which this war is changing Europe poses an existential threat not only to the security of many European countries, but also to the whole institutional architecture on which Europe and Western Europe has been built in the last 80 years.

Therefore, it is a threat for everyone, including for Italy and Portugal. None of this countries is big enough to be relevant in a globalized world without allies. If we compare it to the threat that COVID-19 posed to the European economy, the European Union ended up borrowing 800 million euro. Meanwhile, it was not able to design a scheme to borrow money in order to keep the war as far away from European Union’s border as possible. Therefore, it is a bit of a paradox.

LJ: When it comes to the issue of ammunition production, what should be done about the unused capacity that exists in EU factories? And what about the interconnectors between Moldova and Romania, which were not created at a time when they were very much needed? And, finally, with the existing institutions, legislation, and funds, what can we do differently to improve the situation, providing there is a political will to do so?

NP: The interconnector between Moldova and Romania is happening, but too slowly. It should have been done by now – and it would have been if urgent security procedures had been applied, which is not the case. However, there is a number of other Kafkaesque examples of this phenomenon.

In 2020 or 2021, Ukrainian Road Construction Agency received large funds (100 million euro) to renovate roads in the Luhansk region. And then when the war started, Russia began the occupation of the region, so Ukraine could no longer renovate the roads in that part of their territory. Therefore, these 100 million euro were supposed to be repurposed for other purposes for Ukraine. The procedure, however, was so excruciatingly slow that, at some point, Ukraine decided that it is not worth trying to do the repurposing of the funds. In a crisis situation it was totally absurd. Using that money for another purpose (like for a grain storage or electricity infrastructure) was not possible because peacetime procedures were being applied to a situation that needed quick solutions – not two years of paperwork.

There were many other absurd situations like that, which means that the European Union needs to revise its procedures in a way that allows for special procedures in case of a war or a major crisis, otherwise Europe will be getting weaker and weaker, and it will be losing not only its global dimension, but also its cohesion and capacity to compete in the economic sphere.

We see numerous European voters being upset with the governing parties. We may observe setbacks in France, Germany, and the UK. In Britain, the government lost elections just a couple of months ago. Clearly, there is a big backlash against governing parties. Yet, if you look at how fast the European Union has been spending the post-COVID-19 recovery fund, it is ridiculous.

Therefore, instead of finding ways to spend the money fast to boost the European economy and also keep the European political systems less affected by the popular vote of voters, we have created procedures which are so heavy that they make it impossible for governments to spend money fast to relieve the economy after COVID-19, or to help Ukraine fast enough in a broad spectrum of issues. This creates a dangerous situation for Europe.

LJ: Does the European Commission live up to the expectations? What needs to happen for it to become less of a very complex bureaucratic institution and more of a strategic actor which sets its own goals and is more flexible in achieving them when things go wrong?

NP: What happened in the last three years (also with the COVID-19 pandemic) is that very often you have a political realization of the fact that something needs to be done urgently. Certainly, the leadership of the European Commission as well as the leadership of the European Investment Bank and the European Bank for Reconstruction of Development all see the urgency of what needs to be done. However, we still need proper legal procedures to be worked out by legal departments and risk analysis units. All of them work on protocols which are designed not for crisis, but for slow, casual, peacetime speed. Therefore, it is not just a matter of political will.

Very often there is political will, but we also need a proper institutional adjustment that allows for administrative fast tracking. And we still have not seen a proper institutional adjustment that would make Europe better fit for crises yet – including future crises.

LJ: This brings us to a conversation about enlargement, and more specifically about Moldova. What is the current situation in Moldova after the full-scale invasion of Ukraine by Russia? And what was the rationale behind the recent referendum, which was combined with the presidential elections?

NP: After Ukraine, Moldova has been the country that suffered the most from the negative consequences of the war. I do not wish to underplay the impact of the war on Ukraine, as it has been a million times more dramatic and tragic. But among the other countries, Moldova has been probably the most severely impacted country in a lot of domains.

Moldova had to handle a big refugee crisis. Compared to the population of Moldova, its GDP, and resources to manage it, it was much more difficult than it was in Slovakia, Armenia, or Poland. On top of it, Moldova has had significant economic problems because of the war. Investors have been much more careful about investing their profits in a country located next to the war zone.

As a consequence, the costs of the regional logistics, chains, and transportation, everything has gone up. Meanwhile, a number of people in France or in Poland were dissatisfied with the inflation levels, but in Moldova, all of these problems have been even greater, and the government has had fewer financial ways to compensate and alleviate the economic shocks of the war. Therefore, the context is complicated.

In the last few weeks in Moldova, we had a presidential election and the referendum on introducing a reference to EU accession into the constitution. Maia Sandu won the presidential elections and reclaimed her mandate with an 11% lead, which is a really amazing result.

Meanwhile, across the world, especially in democracies, incumbents are being penalized by voters. In the last couple of years, the United States, Poland, the United Kingdom, Germany, Finland, and Italy all have seen new governments coming to power and people being dissatisfied with inflation and price levels, among others. Therefore, the fact that the Moldovans recommitted, once again, to a pro-European government, to Maia Sandu for a new mandate, and voted in favor of the EU-related referendum is clearly a testimony to a very high degree of resilience to the existing problems.

Nonetheless, these problems continue to erode the Moldovan economy, the level of optimism in the population, and the trust in the political system in general. All of these structural problems have been aggravated in recent months in Moldova with a very aggressive mass-scale Russian scheme to buy votes.

Through oligarchs, Russia had distributed at least 138,000 bank cards to Moldovan citizens, which represents approximately 10% of the total number of all voters in Moldova. Some of these people were being paid for several months in order to make them vote the way Russia told them to. The authorities know every single phone number related to this case because people who had installed the application of a Russian bank were receiving text messages during the installation process and cash payments on their bank accounts, which was all registered in the mobile operators data.

These are not mere speculations. We are talking about a pretty obvious situation with almost 10% of the voters who installed a Russian bank application on their phones and had been receiving cash for their vote. This is a very dramatic new form of hybrid warfare that comes on top of disinformation and many other methods that aim to destabilize Moldova.

The good news is that between the first and the second round of the presidential elections, the authorities pushed back quite significantly against this vote buying scheme. Therefore, judging by the results – although it is difficult to give the exact numbers – it seems like the pushback against the scheme has more or less worked for a significant number of people who have sold their vote in the first round of the presidential elections, but who have hesitated in the second round, when they saw that it is not that you get 100 euro for selling your vote but you can also get fined, detained, or investigated by the police and you will end up in the justice system. Therefore, it likely prevented a lot of people from selling their vote in the second round and, as a consequence, the results were more reflective of the rule of the voters.

LJ: It seems that Maia Sandu wanted to make the presidential elections very much a referendum on the European future of Moldova. In hindsight, did it make sense to polarize voters along the party lines on the EU question? Perhaps it is the issue that would allow for mobilizing more voters in support of the European Union?

NP: It is too late to speculate about what would have been better, and it is always easier to have strong opinions in hindsight. What we have seen with the EU referendum was that in the first round Maia Sandu received 43% of votes, whereas changing the constitution and introducing a reference to the EU or several references to the EU observed 50.4% of support. Therefore, there was obviously a higher number of people voting in favor of the EU than for Maia Sandu in the first round.

At the same time, within these results, approximately 10% of votes that had been bought also influenced the final result, which became less persuasive when all the opinion polls came in. I, myself, was involved in running the civil society effort to inform about the European Union and to push back against the lies and the propagistic lies spread about the EU.

Let us consider another parallel. Everyone considers Donald Trump as the newly elected president. If you follow the media and the Democratic Party, people talk about Donald Trump’s crushing victory, a swiping mandate for implementing his policy priorities. Yet, if you look at the exact numbers, Donald Trump has been voted by the same number of people as in 2020 (74 million people, 49.9%. of all votes). Therefore, it is somewhat less when the EU referendum result in Moldova was. Still, there was a massive discussion surrounding the results of the referendum.

However, the conversation about the referendum is done by now. The Constitution is now being amended. And now, the current and future governments will need to make sure that they implement the necessary reforms as fast as possible to bring Moldova into the European Union.

We have discovered what we already knew from the case of Brexit and the French referendum on the European Constitution back in 2005, which did not get a positive response. Clearly, referendums are a double-edged sword. You sometimes ask the question and very often voters give you an answer that is not the answer to this question, but rather a reflection of what they think about the government or the economy.

LJ: How will the position of Moldova transform vis-a-vis EU integration? How will the government approach the parliamentary elections, which perhaps might be even more crucial regarding the future of Moldova? And what do you expect will happen in the area of EU integration and on the domestic front regarding those issues?

NP: Next year will be very difficult for Moldova. We are going to have the parliamentary elections, and the developments in Ukraine remain unclear. We do not know how the front line will evolve, whether there will be a peace deal, and how sustainable it would be. Therefore, all of these conversations that we hear between the new American administration about the future of Ukraine are all casting a dark shadow on the Moldovan politics and regarding public attitudes toward domestic political players, Europe, the United States, and Ukraine. All of this makes for a very difficult context for Moldova.

Additionally, the Russian pressure continues. Russia is most likely continuing to invest money in its election-related scheme, fine-tuning it, trying to find better ways to sway the vote also next time. Meanwhile, the Moldovan economy continues to suffer from the impact of the war. There is also massive disinformation.

Moldova has managed to weather a lot of crises in the last 30+ years. Regardless of that fact, even last month, Moldova once again recommitted to a pro-European track. Nonetheless, the context is very complicated, and it is likely to be so in the future as well.

This is why it will be extremely important for Moldova to continue to get the support of its partners and for it to happen very fast. Because when we talk about infrastructure development in Moldova, in a crisis situation, it is really not very wise to offer grants and then spend five years on paperwork before these grants turn into actual bridges and roads. Three or five years is too long.

Therefore, there is a need for a greater speed and assistance, which is crucially important for Moldova’s political and economic realities. And this is going to have a significant geopolitical impact on Moldova’s positioning in the world in a region that remains dangerous.

Check out the ECFR report: https://ecfr.eu/publication/better-firefighting-readying-europe-for-an-age-between-war-and-peace/

This podcast is produced by the European Liberal Forum in collaboration with Movimento Liberal Social and Fundacja Liberté!, with the financial support of the European Parliament. Neither the European Parliament nor the European Liberal Forum are responsible for the content or for any use that be made of.

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I wrote about this controversial politician in January, when he began his term. He was an eccentric. During the election campaign, he promised the abolition of the central bank, the unilateral adoption in Argentina of the U.S. dollar as a circulating currency, and drastic cuts in spending and bureaucracy. To illustrate these promises he performed with a chainsaw, which was constantly mocked by his opponents. Many commentators regarded him as a frivolous person who, quite by accident, found himself in Casa Rosada, the seat of Argentina’s presidents, simply because citizens were fed up with galloping inflation, an unstable currency, and the country’s bankruptcies that occurred every few years.

On the other hand, even those who saw Milei as little more than a demagogue with a chainsaw expressed concern that the announced reforms could be torpedoed by popular opposition, especially from the Peronist-controlled labor unions. His La Libertad Avanza (Freedom Advances) party has only a handful of representatives in the Senate and the Chamber of Deputies.

Immediately after taking office, Milei presented an ambitious economic program with a comprehensive “Omnibus Law” containing more than 600 specific proposals and an Emergency Decree. Key points in the law include:

• Privatization of several large state-owned enterprises,
• Tax reforms, including income tax cuts,
• Emergency law granting the president special powers to govern certain areas for up to two years,
• Deregulation of the economy to reduce state intervention in the economy, as well as cuts in subsidies,
• Electoral reforms, including radical changes to the electoral system.

To pass the bills, Milei must seek support from the middle class and moderate Peronist parliamentarians. The president managed to push through the “Omnibus Law” in Congress in July, albeit in a much truncated form. The Emergency Decree, an instrument used by previous Argentine presidents to govern, is still in effect. It was rejected by the Senate, but not yet by the Chamber of Deputies. The success in parliament, though not complete, has shown that Milei is not a dreamer, but an effective politician.

The tax amnesty program, which encouraged Argentine residents to deposit foreign currency, previously tucked away under mattresses or in bank accounts abroad, was also a success. This practice had been going on for years. Argentines avoided domestic banks, fearing insolvency, low interest rates, and the falling value of the peso. It is estimated that Argentines hold about $277 billion outside the official banking system. Part of this sum comes from illegal or untaxed income.  The amnesty allowed up to $100,000 to be disclosed without consequence or taxation and deposited into the country’s banks. Sums over this amount were taxed at a rate of 5%.

Thanks to the amnesty, Argentines deposited about $18 billion in the country’s banks, and deposits in dollar-denominated private bank accounts rose to $32.5 billion. The lack of adequate foreign exchange reserves was the cause of Argentina’s insolvency in 1982, as well as in 2001, 2014, and 2020.

During the election campaign, Milei promised that fighting inflation, which was 211 percent in 2023, would be his top priority. Milei succeeded in significantly lowering the inflation rate thanks to strict austerity measures. In October 2024, monthly inflation was 2.7 percent, and annual inflation is still high, but falling. The government forecasts inflation at 104 percent this year and 18.3 percent next year, while the IMF forecasts are more pessimistic at 140 percent and 45 percent, respectively.

In addition to fighting inflation, Milei’s priority is to repair the budget. The president, who declares himself a libertarian, regards the state as a fundamental evil and considers only the protection of public order and the legal system as legitimate state tasks. Immediately after taking office, Milei began cutting public spending by abolishing or merging ministries and subordinate bodies. In addition, public sector wages, salaries, and pensions grew slower than inflation, resulting in real budget savings. Infrastructure projects were also put on hold, to be privately financed in the future. Milei achieved further reductions in state budget spending by – constitutionally controversial – deferring central government payments to the provinces.

Since the beginning of 2024, the Argentine budget has closed with a surplus for the first time since 2008. The fiscal discipline put in place is also an important precondition for further negotiations on debt restructuring with the IMF, of which Argentina is the largest debtor. The US$44 billion loan was negotiated in 2018 under then-President Mauricio Macri.

Under the Emergency Decree, which came into effect at the end of 2023, Milei introduced a radical liberalization of rental law. Under the Peronist government, rental contracts were subject to several restrictions: the term of the contract had to be at least three years, hyperinflation adjustments were allowed only once a year, and contracts had to be in the local currency, the peso, which was suffering from a chronic decline in value. As a result of these restrictions, many owners refrained from renting or listing their apartments for sale, preferring to leave them vacant as investment and speculative properties.

Consequently, demand for apartments far exceeded the available supply. The liberalization introduced by Milei has meant that when renting apartments, terms and currency can be freely negotiated and changed quarterly. Real estate portals immediately recorded a more than doubling of the number of apartments on offer.

Part of the “Omnibus Law” is the RIGI investment promotion package (Régimen de Incentivos para Grandes Inversiones) which includes 30-year tax breaks and foreign trade facilitation for companies making large investments (over $200 million) in selected sectors, including energy, resource extraction, infrastructure, technology. The law went into effect in July, and the first foreign companies have already announced their intention to invest in Argentina. They are encouraged not only by the tax breaks but also by the fact that Argentina is much better rated on international markets.

Argentina is not only rich in agricultural products but also has attractive conditions for investment in the energy and raw materials sector. The country has significant gas reserves and excellent conditions for green energy expansion.  According to government estimates, Argentina will be able to produce more than 1 million tons of green hydrogen annually by 2030. It also has deposits of copper and lithium, which is important for battery production. China has invested in Argentine raw materials. The Milei government would prefer investment to come from democratic and predictable countries.

It is no surprise that the libertarian government’s successes in reducing inflation and the budget deficit have not yet translated into an improvement in the country’s real economic situation. On the contrary, Argentina is in a severe recession, with both Argentine and international economists expecting a decline of nearly 4% in GDP this year. Fiscal austerity and benefit cuts have caused consumer demand to fall by more than a dozen percent over the year, and a near-total halt in public investment has further hampered economic growth. Milei appeals to the population for patience and promises to restore strong GDP growth, and consequently, an unemployment orchard and real income growth, as soon as the dominant problem, inflation, is permanently resolved.

According to analysts at Spanish bank BBVA, which has extensive operations in South America, Argentina’s GDP will fall by 4 percent this year, grow by 6 percent in 2025 and 4.6 percent in 2026. Investment will fall by 25 percent this year, grow by 15 percent in 2025, and 21 percent in 2026. Inflation will fall to 40 percent next year and 25 percent in 2026. Public debt will fall from 100 percent of GDP this year to 78 percent in 2026.

Argentina’s October 2025 by-elections, which will decide half of the seats in the lower Chamber of Deputies and a third of the Senate, will be a key barometer of the president’s chances not only of implementing his economic plan, but also of becoming a major political force.

The situation in Argentina is worth following, as it could be an example for countries where handout policies have been pursued for years, leading to uncontrolled growth in public debt, inflation, and stunted growth. Argentina shows that only a hopeless economic situation resulting in worsening poverty can get voters to accept a tough market reform program.

Written by Witold Gadomski (Gazeta Wyborcza) for Economic Freedom Foundation

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On November 8, 2024, the Friedrich Naumann Foundation for Freedom participated in an expert hearing in the state parliament of Mecklenburg-Western Pomerania, invited by the liberal FDP parliamentary group. Mecklenburg-Western Pomerania, the northeasternmost state in Germany, has approximately 1.6 million inhabitants.

Under the theme “Growing Up in Times of the Climate Crisis”, the commission of inquiry “Being Young in Mecklenburg-Western Pomerania” addressed the impact of climate change on young people.

Benno Schulz, the Foundation’s Education and Science Advisor, delivered a speech advocating a positive outlook on human creativity, growth, and, above all, education as the most important lever for innovation, long-term economic growth, and research success.

It was emphasized that multiple crises are significantly impacting the mental well-being of young people across Germany. Studies show that concern about climate change has now been surpassed in urgency by worries about the economy, housing, and social cohesion.

Apocalyptic scenarios and calls for panic are clearly the wrong tools to address climate change. Instead, clear facts, precise analysis, and the best possible education are needed to tackle the challenges of the 21st century.

Full Transcript of His Speech:

“Dear Chairman Winter,

Esteemed members of the commission,

Ladies and gentlemen,

First, I would like to thank you, and especially the FDP parliamentary group, for the opportunity to address some of the questions sent to us in advance.

I will begin with a psychosocial aspect from the two-page questionnaire:

Question 15 reads:

‘Do young people fear the future regarding climate change, and do children, adolescents, and young adults feel guilty and responsible for the climate crisis?’

My answer:

We do young people no favors by generalizing. Of course, there are young people who are fearful about the future in relation to the climate—even feeling guilty. However, a significant proportion—1 in 5 young people in Germany—have never heard about climate change, according to a representative survey conducted by the International Central Institute for Youth and Educational Television in the first half of 2024. These represent the two extremes.

As the Friedrich Naumann Foundation’s Education and Science Advisor, I believe that school education plays a crucial role here. It is my conviction that we need the best possible education to help contextualize these surrounding issues. This education must be grounded in scientific knowledge, a positive fundamental view of human existence, and the individual needs of students. Above all, the goal of education must be to empower young people to form their own well-founded opinions.

It is important to emphasize that humans are capable of action. Through research and science, innovation, and growth, we can avert crises and create opportunities. The significance of each individual, coupled with the emphasis on human creativity, should encourage and empower, giving space for action rather than amplifying potential feelings of guilt.

Building on this, I would like to address Question 16:

‘What long-term consequences could constant negative reporting have on young people in the country, and would children, adolescents, and young adults feel better without such negative reporting?’

My response:

Here, too, I advocate for an enlightened approach. Children and young people have a right to the facts. Any form of censorship or sugar-coating of events in reporting is unhelpful. This does not change the sometimes devastating consequences of extreme weather events or climate change. These realities must not be minimized, and any attempt to do so would rightly provoke public outrage.

However, panic-mongering must also be avoided. Facts should be presented clearly, along with examples of how society can become more resilient.

Media coverage should also address the underlying problems. For example, in the Ahr Valley flood of 2021, many lives could have been saved if warning systems had worked effectively and those responsible had fulfilled their obligations. Similarly, the reporting on the Valencia region in Spain often fails to address shortcomings in building the necessary wastewater infrastructure.

It is often the combination of natural disasters and human failings that cost lives. At least the latter can be minimized as much as possible in the short term. Highlighting how progress and research have helped to solve problems—compensating for crop failures, preventing floods with levee construction, predicting earthquakes, or mitigating soil erosion—should give young people hope for the future. The focus should be on finding intelligent solutions, fostering research, and sparking interest, rather than resorting to panic, which is, as prominently suggested, the worst adviser.

Finally, I will address Question 21:

‘What are the biggest problems facing children and young people, and are there specific issues for Mecklenburg-Western Pomerania?’

Currently, we observe that social and, above all, economic problems and concerns have overtaken climate change in public discourse. Recent election results (local, state, and European) indicate that so-called ‘green’ issues no longer hold the same high priority for the majority of young people.

This is also supported by the comprehensive, representative study ‘Youth in Germany’, which surveyed 2,000 young people nationwide in early 2024.

Fears of social decline, driven by the economic crisis and inflation, are now prominently on young people’s minds. Concerns about expensive or extremely scarce housing, as well as wars and conflicts in Europe and the Middle East, weigh heavily. The fear of growing social tensions in society even surpasses concerns about climate change.

While the challenges related to the climate undoubtedly remain, the immediacy of these other issues is currently more pressing. Inflation and the resulting barriers to societal participation are more immediate to young people’s lives than the relatively abstract issue of climate change.

Added to this is a sense of thematic fatigue and near resignation. Participation numbers in climate-related demonstrations, for instance, suggest this. The repeated emphasis on climate topics during extreme weather events, coupled with the slow pace of fossil fuel phase-outs by many industrialized nations, likely leads to resignation and eventual disinterest in the topic.

The multiple crisis situation is certainly having a strong impact on young people’s mental well-being.

Policy must increasingly focus on the mental health of children and adolescents. The need for greater mental health support in schools has been apparent since the disruptions caused by the COVID-19 pandemic. The recent opening of the University Clinic in Greifswald earlier this year is a positive step.

However, low-threshold psychological counseling services in schools need significant expansion. Given the rise in perceived stress, closer and more professional support for young people is urgently needed.

This would help individuals and society view crises as challenges to be overcome, rather than insurmountable obstacles.

Thank you.”

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In this challenging environment, calls for stricter rent controls are tempting. Rent regulations can be implemented quickly, do not entail direct costs for public budgets, and are often popular. After all, what could combat rising rents more effectively than banning further rent increases? Why not adopt the Berlin rent cap (which was declared unconstitutional) as a model and introduce a similar system at the national level?

The catastrophic consequences of such an idea are highlighted in a new study by the IW Cologne commissioned by the Friedrich Naumann Foundation for Freedom. The report dispels the remaining myths about the supposed positive effects of rent controls.

Key Findings

• If Germany’s existing rent control regulations were tightened following the Berlin rent cap model, the number of rental apartments listed each quarter would temporarily drop from 70,000 to 27,000—a decline of over 60%.
• Higher-income tenants would benefit the most from stricter rent controls, while families and low-income households would face even greater difficulties finding housing.
• Tightening rent control regulations would also reduce incentives to invest in housing. Considering the necessary investments for achieving a climate-neutral building stock, rent controls would directly contradict climate protection goals.

The researchers at IW Cologne conclude that “rent controls ultimately cannot resolve the housing market’s tensions. Further tightening of rent controls would instead lead to an even greater shortage of supply.”

Real Solutions for Housing Market

Instead of stricter rent controls, genuine solutions are needed to balance supply and demand. According to the researchers, significant untapped potential for creating housing remains in urban areas through densification, adding floors to existing buildings, and converting attics. Additionally, greater attention should be paid to the interaction between urban and rural areas.

For many households, moving to suburban or rural communities offers opportunities for more affordable housing and homeownership. However, this requires robust infrastructure, including high-speed internet, healthcare facilities, and access to all types of schools.

For the Friedrich Naumann Foundation for Freedom, the report demonstrates that further tightening of rent controls would have devastating consequences—not only in Germany but across Europe. Such measures would harm precisely those they claim to help. Rent controls promise simple solutions, but there are simply no easy fixes for the housing market. Instead, what is needed are reduced bureaucracy, more building land, and faster approval processes.

A new report by the Friedrich Naumann Foundation for Freedom (in German) reveals the devastating effects that further tightening of rent control regulations in Germany would have. If rent control were intensified following the model of the Berlin rent cap, the housing supply could temporarily plummet by over 60%.

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