EES General Meeting and EES Economic Talks in Weissach (GER), October 20, 2022
EES General Meeting 2022 EES Economic Talks on the topic: "Inflation and War - Is the Social Market Economy Still Up-to-Date?"
Hotel Bachmair Weissach (*****), Wiesseer Strasse 1., D-83700 Weissach
Dr. Wolfram WEIMER
Weimer Media Group; Publisher and Publicist,
Founder and Publisher of the magazine "Cicero",
Organizer of the Ludwig-Erhard-Gipfel, on the topic:
"The World is Changing - What Ludwig Erhard Would Advise Us Today"
Guest of Honor
Dr. Horst KÖHLER
Federal President ret.
"Inflation and War - Is the Social Market Economy Still Up-to-Date?"
Introductory Speech by Dr. Ingo Friedrich
Europe is facing enormous challenges that we have not experienced in this concentrated form since the end of the Second World War. This includes a corona pandemic, which has been going on for more than two years now and the end of which is not in sight, massive supply chain problems and the associated bottlenecks in goods, the ongoing war in Ukraine accompanied by a new security architecture in Europe, a new and rapidly growing wave of refugees to Europe, rising interest rates and a rapidly rising inflation, accompanied by skyrocketing energy prices, which are pushing even healthy companies and high-performing households to their limits. Then there is the topic of combating climate change. All in all, we are currently threatened with a high loss of prosperity and a slump in economic growth, all the way to a global recession.
What gives hope: So far, the EU and the EU member states have emerged from every crisis stronger than they were before. Europe has proven itself in solving problems for decades. Putin certainly did not expect such a united Europe. It is only thanks to this circumstance and the support of the United States and Great Britain that Ukraine has so far been able to successfully defend itself against this war of aggression.
However, the current crisis shows one thing just as clearly: No country will be able to keep global problems at bay or deal with them alone in the long term. In the short term and to bridge the gap, a state can mitigate slumps and cost explosions by intervening in the market, including direct payments and support services. However, this will not work in the long term, since the state usually finances these market interventions through debt. Because financing through tax increases would be counterproductive, especially in times of crisis. The aim must therefore always be to create a return to normality, to ensure functioning markets and sustainable competition.
If you break down the social market economy into its two core elements of subsidiarity, i.e. individual responsibility, and solidarity, I am convinced that the social market economy is far from obsolete. To put it simply, there is no alternative. Social market economy means social security and political stability. It demonstrably leads to high purchasing power and an increase in living standards, to more productivity and more innovation, and creates the conditions for growth and prosperity for all as well as individual freedom.