With very high energy prices, a lack of innovation, an ever-growing bureaucracy with associated regulations and more ambitious climate targets than those we are competing against, there is little indication that the situation will change anytime soon. Unless both we and Europe take the spoon in another hand – fast. Most people with some knowledge of politics and economics know that there is still a strong connection between access and price of energy and economic activity, productivity and value creation. Broadly speaking, this is our entire history through and after the industrial revolution in the last 200 years. It has turned both Norway and Europe into industrial superpowers, welfare societies and well-developed democracies. In short – give us every opportunity for a safe and good life. For many reasons, this reality stands to fall, the consequences are potentially enormous for those of us who live here. We will briefly comment on some of the most important reasons. Fall in productivity development: The fact that development makes us a little more efficient every year, that we can produce a little more with less effort, is the most important reason for growth and prosperity development. Productivity trends have been falling in the West since the turn of the millennium, but particularly negative in Norway and the EU. Here at home, several of our most important industries have at times experienced negative productivity growth for long periods, for example the construction industry. In other words, things become more expensive and less efficient over time. This makes us all poorer. In the last 5–6 years, Norway/EU has barely had a positive productivity development, while over time the USA has clocked in significantly better than us, in fact twice as high in the last 25 years. If we look at GDP figures and real wage growth, the practical consequences become visible. In 2011, European GDP was 92 per cent of the American – in 2023 the corresponding figure is 66 per cent. Per capita, Europeans now produce just over 50 percent of the values each American manages. High energy prices: The European Central Bank’s former ECB President Mario Draghi just released a report documenting huge differences in energy prices between Europe and the US. The electricity price in Europe is 158 per cent of what the US gets, gas prices 345 per cent. In plain language, this means an increased de-industrialisation of Europe. Few boards of industrial companies will choose to spend their money here. Unlike the US, Europe lacks abundant natural resources. Of the democratic and friendly countries, only Norway produces oil and gas on a scale suitable for Europe and the European market. Nevertheless, European energy and resource policy has largely been about limiting the management of what little we have. The result has been higher prices and more imports, often from militant dictatorships. Much of this is driven by the fact that Europe, and Norway, have far more ambitious climate targets than our main competitors; USA and China. As is well known, we must cut our emissions by 55 percent in 2030, based on what they were in 1990. The USA, under Biden, will cut by 50–52 percent, but then based on 2005. This gives the USA an emissions base that is 20 percent higher than it was in 1990, in other words a huge difference. China, for its part, aims to increase its emissions significantly until 2030. There is a clever saying with a lot of truth in it: “America innovates, China replicates, Europe regulates”. It is per date few, if any, European companies we can think of that dominate the old and new world economy in their fields. It’s mostly about defending yourself and what you still have. Nicolai Tangen put it nicely when he said that Europe has the world’s best regulations on artificial intelligence (AI) but no AI, the USA does not have so many regulations, but a lot of AI. Nvidia alone, for example, is worth 8 times the entire Oslo Børs. Both Norway and Brussels suffer from a delusion that one can regulate oneself to Paradise. The number of regulations, bureaucrats and costs to follow up thus rise dramatically. There is even a separate “diagnosis” for this: Eurosclerosis, meant to describe how bad things can go if you overregulate. Draghi writes that since 2019 alone, Brussels has introduced 13,000 (!) laws and regulations, the USA just over 5,000. A tsunami of laws and regulations that hinders growth and brings enormous costs with it. We still believe there is a lot of hope for both Norway and Europe, but it requires new policies. We must stop spending money on climate measures that don’t work and are just a drag on our own businesses. The energy must not only be greener, it must also be affordable and stable. There must be acceptance that the natural resources on our continent should also be actively exploited, both because it creates economic activity and because it makes us less dependent on imports from countries that pose a security risk. Innovation, growth and talent must be unleashed, not locked in by regulations and excessive taxes. There is a lot to deal with, and it is urgent. Send us your opinion Want to write? Feel free to contact us at news Ytring with your post. The guidelines can be found here. Published 30.10.2024, at 05.58
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Norway and Europe are losing the global competition – Statement
