PANEL DISCUSSION 2025

Karel HAVLÍČEK:
THE EUROPEAN UNION HAS FAILED, WITHOUT DECISIVE MEASURES WE HAVE NO CHANCE OF SUCCEEDING IN THE GLOBAL ECONOMY

Ladies and gentlemen,

I have to say, I'm not a typical politician. I come from the business world, where I spent 20 years as the CEO of an industrial holding. I mention this because business operates by different rules than the public sector. The first of two rules is that what matters is the result. It's not about how you say things, but how you achieve your goals, plans, or strategies. The second is that, in business, when something goes wrong, you can't bury your head in the sand. Losses and failures happen, but you must acknowledge them, evaluate the situation realistically, get rid of weaknesses, and show how to fix them. Making a mistake isn't the problem. Refusing to admit it and learn from it is. Unfortunately, this doesn't apply in politics. Instead of self-reflection, we see excuses and empty words rather than solutions.

A typical example today is the European Union. To use business language, the European Union is not in good financial shape. We are losing ground to the United States and China. China is overtaking us. 25 years ago, the European Union accounted for 26% of global GDP, the United States 27%, and China only 3%. Today, the United States is still at a level of 26%, the same. The European Union has dropped to 16%, the same as China. So we are losing performance.

We are losing profitability. We are falling behind in innovation and productivity. That's reality. Companies are leaving for America or Asia because they can no longer stay competitive in Europe, while American and Chinese firms are conquering our markets. The worst part is that we refuse to admit it. Instead of critically describing the current state, removing those responsible, and showing a way out, we downplay the situation and pretend it's a short-term issue, but it is not so. This is a very serious problem. The European Union has failed, and unless we take decisive action, we have no chance of succeeding in the global economy.

Solving the problem means understanding its causes. Europe is losing because of flawed climate, energy, and migration policies; unrealistic climate change targets; lobbying by companies profiting from the green transition; and a catastrophic failure in energy policy leading to the loss of energy self-sufficiency and dependence on imports of energy sources. All of these are undermining business productivity. Another major problem is the overwhelming level of regulation. Finally, the third issue is the absurd system of subsidies. Instead of business stories driven by courage, innovation, and risk-taking, we see a parade of over-subsidized companies that would not survive otherwise. It's crazy. Economic growth is not driven by entrepreneurs, but by governments and the European Commission. Instead of market principles, we have redistribution, subsidies, and ever more regulation – a misguided attempt to fix weak business performance rather than to create predictable conditions for energy prices and cut bureaucracy. We have tried to "help" companies compete with American and Asian rivals through more subsidies and interventions, making things worse by accelerating this cycle instead of admitting failure and recognizing that this strategy was wrong.

European politicians, led by the European Commission, have buried their heads in the sand and have proposed only cosmetic changes. Sometimes I get the feeling that they have begun to believe that the European Union is a perpetual motion machine. With declining business performance, they want to invest even more in defence and in decarbonisation. In other words, the less we earn, the more we spend. At the same time, we underestimate our global competitors from Asia, Latin America, and the United States. It's called pride before a fall. We refuse to admit that the Global South is becoming more productive, more innovative, and that we are falling behind. We also ignore that the bold measures taken by Donald Trump in the United States, for instance in the area of the Green Deal, will further weaken European companies. The result will be lower tax revenues, higher unemployment, loss of self-sufficiency, and ultimately a major defeat.

So how do we get out of this? First, admit that the situation is critical, that the European Union is not the centre of the world, and that we are becoming an uncompetitive region from which companies are leaving instead of arriving. Secondly, stop relying on the state as the main driver of economic growth. It is not so. Humbly recognize that only the private sector can restart the economy and that the government must provide it with predictable energy, investment, labour, and tax conditions, and a functioning capital market.

Thirdly, drastically reduce the level of regulation and the frenzy of subsidies. Fourthly, understand that without a healthy business sector, nothing will work. Fifth, recognize that while Europe tries to save the world from climate dangers, China and the United States act largely out of self-interest. That's reality. Sixth, admit that we are no longer the best and that returning to the Champions League will be difficult. In many sectors, we have already missed the train. Seventh, realize that while we compensate for poor results with social benefits, those outperforming us are working harder. Eighth, respect European Union rules, but stop relying on central solutions from Brussels. Ninth, understand that first we must invest wisely to earn money, and only then can we spend it. And, tenth, finally, we need allies, and we can start with the Visegrad Four, an extremely important formation.

The Czech Republic can play a key role in the European Union's transformation. We can start by categorically rejecting some of the absurdities, such as emission allowance system ETS2, the ban on combustion-engine cars, or the migration pact. The future of Europe will not be built by regulations, but by people who create, innovate, and take risks. Let's give them the freedom to do so, and the courage to admit that we've gone the wrong way.

Thank you.

Thank you for your attention.