Saturday, May 9, 2015

Economy: UK Election - A Message For Europe

(Drivebycuriosity) - Last week´s election in UK delivered a clear victory for David Cameron. It seems the British rewarded the fact that the Conservative Prime Minister did a good job. Since Cameron´s inauguration in 2010 UK`s economy has been recovering, in 2014 Britain grew faster than any other major economy last year and recently the British unemployment rate has been shrinking rapidly (driveby).

It also seems that the voters endorse and understand the austerity policy of the British government, contrary to many liberal economists. Public spending cuts lead to less government influence and less bureaucracy. Public organizations are less efficient than private companies and tend to waste money, hampering private initiative and economic growth. Thanks to less taxes and curbed government spending the British economy is now leaner and more efficient than before. Private enterprise gained more scope which animates more private investments. Money is used more efficiently leading to higher returns which is mirrored in the rekindled economic growth.

Cameron`s victory is a message for Europe. The British voted for less government & relatively low taxes. This is quite contrary to the trend in the European community. There is a tendency for more regulation (by the European Council) and members like France, Greece and others push for more public spending & bureaucracy.

If the European community wants to keep UK as a member the club has to stop this trend and curb government, taxes and bureaucracy. If Europe would learn from UK and change her policy the community could rekindle her lackluster  economic growth. Maybe in the long run Cameron´s victory is also a victory for Europe.

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