The AEC at FreedomFest

By Federico Fernández.

Barbara Kolm, Director of the Austrian Economics Center, spoke at the FreedomFest (Las Vegas, USA) in July. She took part in the Global Economic Outlook panel, together with the Free Market Road Show veteran Richard Rahn, and Richard Crepeau.

The panel was very interesting and dynamic. Roberto Salinas did a terrific job as moderator keeping interventions short, and asking relevant questions.

Dr. Kolm was the European voice and, of course, the first question she received was about the Greek crisis. She said that Greece is playing games with the European Union and that some sort of agreement would be reached. However, she also claimed that in the long run Greece should leave the euro and return to the drachma. The Austrian economist believes that an example must be made out of Greece’s irresponsibility. The sort of Greek bad behavior shouldn’t be tolerated by the EU authorities.

What’s more, Kolm thinks that a return to a national currency could give Greece a competitive edge which is impossible under the euro. This, by the way, is a position that many economists hold.

In any case, Dr. Kolm maintained that leaving the common currency would not cause the “end of the world” for Greece.

She also criticized Chancellor Merkel for linking Europe’s future with the future of the common currency. “The European Union nor the euro are synonyms of Europe. Europe is much more than those and will go on even if they fail or disappear,” said Kolm.

Finally, asked about positive European examples, she mentioned Liechtenstein, Switzerland, the Baltic countries, and Ireland. She explained that one of the main features of all of these countries is a competitive, simple, and low tax system. In this respect, “tax harmonization” would be a disaster for competition and businesses in Europe.