UKʼs economic path has always been different from its European neighbors since the 80s‚ with closer ties to US-style free-market approach than continental Europeʼs social model. Now after winning recent elections Labour wants to change that
The timing couldnt be worse: Europeʼs biggest economy is showing cracks in its foundation. Volkswagen just announced plans to shut down 3 factories in Germany and cut worker pay by 10% (which hasnt happened since WW2 ended)
German industry faces multiple challenges - Russian energy isnt cheap anymore Chinese buyers prefer local brands‚ and the switch to electric-cars caught them off-guard. Its like UKʼs car industry problems from about 50 years ago; but with extra steps
- Lost access to affordable Russian gas
- Slow adaptation to EV market
- Growing competition from China
- Too many rules and regulations
Former ECB chief Mario Draghi wrote a report suggesting EU needs 300-billion euros yearly investment to stay competitive; but thats not how success works - just look at US tech giants like Apple or Microsoft who didnt need government money
European car factories are running at half-speed these days with sales down by 3 million units compared to pre-covid times. The big-5 automakers (BMW‚ Mercedes‚ Stellantis‚ Renault‚ VW) are fighting for survival in a shrinking market
Britain already went through its industrial changes and now focuses on digital and creative sectors. Adding more social taxes raising minimum wage and copying EU-style worker rules - like Labour wants to do - wont help UK stay competitive in todays world