Opinion

There have been many criticisms of capitalism in recent years. These were mainly attempts to get rid of neoliberalism that relied on the solving power of the free market.

In practice, many neoliberals have distanced themselves from the idea of a “natural” free market. For these neoliberals, the market exists thanks to a government that regulates property rights, makes provisions for international trade and also fuels the competitive spirit. Everything and everyone has to compete with each other, even in terms of utilities and the welfare state.

US house prices have climbed over 6% in the past year, pushing the value of homes nearly 3% above their peak from June 2022. This increase came despite the Federal Reserve’s aggressive interest rate hikes aimed at curbing rampant inflation. Clearly, the traditional models for predicting house prices are no longer reliable.

Artificial intelligence (AI) is reshaping the financial landscape with promises of efficiency, innovation, and superior decision-making capabilities. However, as the European Securities and Markets Authority (Esma) warned this week, the integration of AI in investment services comes with significant risks. Like a double-edged sword, AI’s greatest strengths can become its most dangerous liabilities if not handled with care.

Imagine standing in the Dutch polder, gazing at a sky illuminated by the ethereal northern lights. It’s a rare event, almost as rare as the European Central Bank (ECB) adjusting interest rates before the U.S. Federal Reserve (Fed). Yet, this unusual monetary phenomenon is set to occur when the ECB convenes in June to discuss interest rates.

China’s recent massive sell-off of U.S. government bonds has financial headlines buzzing. This unprecedented move comes on the heels of President Biden’s decision to hike import tariffs on various “strategic” goods, including electric cars, by a staggering 200 to 400 percent.

Ever since the European Securities and Markets Authority, Esma, published its final report on the draft regulatory technical standards, known as the RTS, on 19 December 2023, in particular the redemption policy, minimum holding period and mandatory liquidity management tools, or LMTs, of European Long-Term Investment Funds, or Eltifs, have been points of intense discussion.

In recent months, there has been a notable absence of discourse surrounding the prospect of a recession. The prevailing discussions among economists and financial analysts now revolve around whether we will experience a soft landing or no landing at all. The notion of a hard landing seems to have fallen out of favour. However, it is premature to entirely dismiss the possibility of a recession.

According to Nicolai Tangen, head of Norway’s sovereign wealth fund, Europe is less hard-working, less ambitious, more regulated, and more risk-averse than the US. Yet, the average European is also likely to live a healthier, happier, and longer life than the average American.

So why should Europe become more like the US?

Inflation is rearing its head again, and many fear a rerun of the 1970s scenario. But here’s the catch: the world today is vastly different from back then, mainly because of our access to information. It’s a game-changer. Think about it: a smartphone user today holds more data in the palm of their hand than the US President had in the early 1980s. Knowledge about inflation isn’t just abundant—it’s at our fingertips, dramatically altering how we deal with economic crises.

Strengthening the capital market union is a priority in Brussels. Recently, former Italian Prime Minister Enrico Letta published a report titled “Much More Than a Market.” Letta offered his insights to the European Council on how to proceed with the European capital market union.

In his report, Letta indicated that the mobilisation of private capital should be a priority for the capital market union. To this end, he calls for the creation of a Savings and Investments Union. Is this merely old wine in new bottles?