Paul Bekaert | Why Europe Is Falling Behind America: Capital, Innovation and the Cost of Fragmentation

In the 21st episode of The European Republic, our host Nikodem Skrobisz speaks with Paul Bekaert, co-host of EU Made Simple and a former Goldmann Sachs analyst who now writes about European economics and finance on his Substack.The conversation focus on a the topic, that today is under-discussed in the pro-European space: money. Paul explains how Europe and the United States shared a similar financial trajectory until 2008, and how the divergent regulatory responses to the great financial crsis crash left European banks constrained, European capital fragmented and European companies subsidised rather than restructured. The discussion focuses especially on liquidity — why European exchanges, clearing houses and derivatives markets remain split across national lines, why so few companies choose to IPO in Europe, and why the money that could fund European growth ends up on the Nasdaq in the United States instead.Paul makes the case for Eurobonds, drawing on a proposal by Olivier Blanchard (PIIE) and Ángel Ubide (Citadel) on issuing joint European debt to buy back national debt, with each member state liable for its own share. The result would be lower interest rates across high-debt and low-debt countries alike, and — more importantly — a genuine European bond market that creates the fiscal space to invest in the sectors where Europe has fallen behind.The two also discuss the German industrial crisis and the failure to embrace creative destruction, the French deficit and the limits of a growth model that ended in the 1990s, the brain drain of Europe’s most ambitious graduates to London and New York, and the cultural difference between a continent that prizes humility about work and one that rewards visible ambition.Check out Paul’s Substack: If you are interested in this episodes topics, you can learn more especially in this articles:* https://bekaert.substack.com/p/the-cost-of-non-europe* ⁠https://bekaert.substack.com/p/the-solution-to-all-of-europes-economic* ⁠https://bekaert.substack.com/p/what-are-blue-bondsAbout The European RepublicHow do we build a united Europe that can defend itself, govern itself and shape the world? The European Republic Podcast aims to bring Europeans together and to explore how Europe can become a sovereign democratic power; economically, militarily, technologically and culturally.Our host is the philosopher Nikodem Skrobisz. He discusses with guests from across the continent Paneuropeanism / European Federalism, the European Union, the challenges European Democracy and Institutions face and how we can make Europe more united, prosperous and free.Substack: https://nikodemskrobisz.substack.com Get full access to Nikodem at nikodemskrobisz.substack.com/subscribe