Jungen: "Growth doesn"t come from social expenditure by the Government, but from productivity increases"

03/07/2010

http://assets.fundacionfaes.org/prensa/CAMPUS2010/JUNGEN_W1.jpg! "Public expenditure is a problem: it increases debt and doesn"t drive innovation, and keeps old production structures instead" "The outlook for Europe is not too good unless we understand that the businessman is the hero of our society" "The only way of getting out of the crisis is with more capitalism and more innovation, and emerging markets have understood this better" He warns that "if Europe isn"t careful, we could get to see in the future a G-2 or G-3 without Europe among them" Navacerrada (Madrid), 03.07.10.- Peter Jungen, founder president of the European Enterprise Institute and of the European network Business Angels, has taken part this morning in the second day of the Economics course of the 2010 FAES Campus with a conference titled "Getting Out of the Crisis: More Entrepreneurship and Innovation". During his address, Jungen has reminded everyone of the mistaken policies of Government spending asserting that "growth doesn"t come from social expenditure by the Government, but from productivity increases". "Public expenditure is a problem: it increases debt and doesn"t drive innovation, and keeps old production structures instead", he diagnosed. The economist made these assertions to exemplify the reasons why, according to him, "the outlook for Europe in five years time is not too good, unless we understand that the businessman is the hero of our society". In this sense he declared that "the crisis is simply highlighting problems that were already there a long time ago" as the problem is not the loss of employment, but the need to reform the labour market and creating employment as a result from innovation". GREATER BUSINESS FREEDOM To revert this situation, Jungen insisted on the necessity of boosting "a new atmosphere more favourable to businessmen and entrepreneur culture, as we have the lowest level of new business creation since the "20s". Against those that predict the end of capitalism, he defended that "the only way of getting out of the crisis is with more capitalism and more innovation. There"s no alternative, and emerging markets have understood this better that Europe and are profiting from it". For Jungen, the relationship between "global growth and innovation" with greater business freedom and lower poverty rates is not a coincidence. "For the first time in the history of the World, Europe is not a part of its growth" the president of the European Enterprise Institute stated, and warned that "if Europe isn"t careful, we could get to see in the future a G-2 or G-3 without Europe among them". In his claim for a greater bid for innovation, Jungen was ironic with the attitude of European politicians who "from Monday to Friday attack businessmen, and on Sunday encourage young people to create new companies. Then they complain about there not being enough entrepreneur spirit. I think that where that spirit is lacking is in the European Union", he declared. In his opinion, "it"s clear that in Europe, to get public funds you need two requirements: being big and unsuccessful". Jungen was not too optimistic either with the end of the crisis in the long run. "If anyone believes that we have overcome what each of them think is "his particular crisis" let me tell you that we haven"t. Wait till you see the real crisis, the one of the sovereign debt" he answered before mentioning some data, "the hole of toxic assets that generated the 2007 crisis was of 2.5 trillion dollars. Well, the total sovereign debt of the world is, in 2010, of of 36 trillions.