EU: When MEPs can’t create, they legislate

Some MEPs seem to be disconnected from real-world economic principles. Insulated perhaps by the Brussels bubble. They seem to think that legislative actions can magically alter economic fundamentals without practical considerations.

Why it matters: Laws crafted within this bubble can lead to unintended economic consequences, threatening business viability if they fail to align with market realities.

Driving the news: Social Democratic Belgian MEP Estelle Ceulemans proposed a draft motion advocating for a moratorium on business closures and forced redundancies unless an industrial plan is agreed with social partners. This aims to protect jobs but risks overlooking economic fundamentals. Meanwhile a German EPP MEP is co-hosting a breakfast with the ETUC to push for support for his anti-management draft of a revised EWC Directive. EPP portrays itself as both centre-right and business friendly…

The big picture: Centralized economic plans struggle to accommodate the diverse needs of businesses across Europe. While well-intentioned, such plans often lack the flexibility required for businesses to adapt independently in a dynamic market environment.

Yes, but: A moratorium on closures could result in businesses facing bankruptcy, as they may not be able to sustain operations without the ability to restructure or reduce workforce. This reflects a broader tension in European political thought: whether businesses exist primarily to create jobs or to generate profit.

What’s next: As the recent Draghi report well documented, Europe has a competitiveness problem. Europe is good at making laws, not so good at making things. Passing laws which demand that jobs be saved, no matter what, are not going to help.