 We'll have a panel debate in a short moment. My name is Bjarke Moller. I'm a director of a think tank called Europa in Copenhagen, independent think tank. And I'm very pleased to be here for this debate about Europe's growth challenge. It's indeed a huge question. Sometimes you think about growth. You think about we actually are living in a time of very prosperous times. And we actually are very comfortable with our lives. But growth is really, indeed, a huge challenge for Europe. And there is a big price coming up from McKinsey. How to solve that? You can participate in that. We just announced formally. But maybe we'll have some economists helping us out. And I think that I would like to present the panel now. Simeon, will you please be here once more? And then I'll have Philip Schroeder, professor of the business school just up here. And we'll have Bo Saniman Rasmussen, professor as well at the business school. And we'll have Clemens Jartar, and the director at McKinsey and partner at McKinsey and Company. While we're having the debate, we'll have some prizes there. And you can engage. You'll have the possibility on Slido to forward your questions. And there are two books online. Two books by Simeon Jankov. I think they are very interesting, at least the great rebirth. It could be very interesting for you now. And inside the Euro crisis. I think it's a good opportunity to have this conversation. And I'll start out with the first one, is that according to all the indicators, Denmark is really performing very well. Why do we have a growth crisis in Denmark? Bo Saniman, you are a former member of the tax commission. You've been very engaged in the macroeconomic debates in Denmark. Could you please help us out here? I guess there's a short-term growth problem and a longer-term growth problem. And the short-term growth problem, I think it's coming out of the financial crisis, hit very hard on Denmark. And it really has led both to consumers and firms being very reluctant to spend any money. If you compare the resources they have, they could increase private consumption and investment easily. But for some reason, they don't want to. And that certainly has been leading to low growth for the past six, seven years now. And then there's the longer-term issue, which I guess is even more important. How will growth in the next 10, 20, 30 years evolve in Denmark? And there, of course, we can start looking at the numbers. What are the growth potential in Denmark? And certainly, we have already made some reforms. But if we want to have growth at least, let's say, 2% a year, we probably need to have more reforms that can either increase the labor force or can make people more productive so that the capacity for growth will increase. And going into the productivity is really one of the core questions for Europe as well, because we have a stagnation of productivity in Europe and it's quite deeply interlinked with the economic growth crisis. You were on the Productivity Commission, Philipps Reuter, looking outside of the borders of Denmark. What is really the core of the productivity problem for Europe? I think what is at the core, and it's very much echoed in the debate we actually had today and yesterday in Denmark since we have the government top meeting in Marienborg where we discussed this, and actually tackling the growth issues that Bo just explained, is that productivity is at the core. And if you think about what is going wrong, and I think you've sensed that already in the talk you just said, is that we haven't harvested all the potential for full competition within Europe. Not all our markets are as liberalized as we tend to believe. And so competition, increased liberalization, increased internationalization turn out to be key in triggering future productivity. And only by opening up, and by allowing that productivity boost to ignite industry dynamics in Europe, will you actually see Xan future growth in Europe? We have actually an interesting question coming up here. How will Europe try to improve the technological innovation? And I can't see it here now on my screen. But anyway, Clemens, you're also into digital technologies. And I think really that is one of the issues also raised in the presentation by Simeon. And there's a very big disparity in performance inside the European Union. But compared to the United States, we're really laggards, aren't we? Well, we are laggards in building technology companies, that for sure. In many sectors, you're actually at par, or even better at using technology in making business. And I think kind of that is one of the key opportunities also that we have going forward. We have already, we can't see it because we're in the middle of it, but we've actually already been through a significant transformation, right? I mean, we have a telco in Denmark that used to have 25,000 employees. They now have 7,000 or 8,000. We have banks that had thousands of branches. They have now hundreds or even less. So we are using technology in some sectors very effectively. And when I saw the charts on online banking, and I saw some of our Scandinavian peers in the very top, it is not just around using online banking. It is also then transforming the sector that's behind. And then you get the productivity benefit that we are looking for. And it's actually going across all kind of sectors, and also the public sector is also becoming digitalized. So, Simeon, have you been studying the issue of the need for Europe to get a digital single market and how that could improve performance? Yes, I've studied the issue, first the overall issue of where Europe can get productivity. And as was already mentioned, single digital market is one relatively obvious way of how you can get there rather than having this very segmented, both regulatory system, but also pricing system, in general segmentation of this market. How can it go forward? Well, you know, it's a relatively new market, so regulations fortunately are not decades or centuries old, so you should be able to change them relatively quickly. And this is within the purview much of this regulation of the European Commission. You would think that we'll be extremely excited to do this, and it has not happened. There is a lot of talk, even yesterday, there was a big press release that now we are finally serious, we'll do it, and you read the press, you're actually not suggesting anything. They're just excited. So there's a lack of leadership as well? Yeah, so in that market, it is, to me, surprising, I know from my policy experience in Europe when this issue was raised, immediately you get a couple of countries that we can all guess. France is always the leader of that, that says, no, we don't want to be all together, we don't want to be a homogeneous market because we lose our identity, which is a strange kind of comment to make, but somehow it has surprisingly, to me, carried the day in such obvious market integration topics like digital market, and without that, we have actually, it was mentioned that in some sectors, Europe is quite good in adopting new technologies, that's true, we also have some sectors where we are very good in generating new technologies, like biomedicine, for example, we are head of the US in many things, but even where we do generate technologies and we have good companies and businesses, I'll finish with that, basically, they cannot develop quickly, and they get sold out to Americans or Chinese and so on, and you look five years after they established, it's actually an American company, so having 28 different national legislations are really an obstacle, yeah. Just out of curiosity, I have the benefit of being an e-research economist, so I can ask this question, because it strikes me that as a way you view it, and you explain to us that there are lemurs that we realize digital technologies come our way, and then a political system can ignore that, I mean, it's not gonna go away, right? Optimization, digitization is gonna happen anyway, with or without Europe, so what is the mechanism in your view that allows politicians to look the other way and hope it stops? Basically, because a lot of the regulation first needs to be agreed on at the national level, and if you have two or three of the large players like France, like Italy in this particular case, so no, no, this is not a topic now, let's wait, you're blocked, so the commission itself cannot go far enough to unblock at least some of it, until a crisis comes, and a crisis is going to come, because we are lagging every year behind. Bo, sentiment, the question on welfare, the level of the welfare state is one of the questions actually here, also raised in several questions. Is the level of the welfare state an obstacle towards growth? Well, my opinion largely is that the size of the welfare state is basically a kind of political question, and if you wanna have a large welfare state, that may mean you end up having, of course, a smaller private sector, and that may be more productive in the public sector, so overall growth may be below on that, so that's kind of a trade-off, and of course, it's the politicians who will then decide if their trade-off seems reasonable, and of course, market forces affect that trade-off, so the trade-off today is much different from what it was many years ago, because of the globalization, technology, change, and so on, and of course, then politicians should adapt to the reality of the markets, and for example, in terms of taxation, of course, there are lots of issues today, we know that it's easier to hide the money where taxes are not being that high, and of course, that will limit also the size of the public sector, and of course, that just increases the cost of having a big public sector, and of course, then you would like the politicians to react to that. But can you find the right size? There's a question here, what should be the right level of government spending in order to have growth? Could you say anything of that? So there are a number of academic studies that look at the interaction between public expenditure, public financing, and various measures, mostly economic measures like economic growth, productivity, and the magic number among middle-income and rich countries, which is where Europe is, is basically between 40, 42, 43%, so a lot less than Denmark, somewhat more than Bulgaria, but basically your government should be reducing expenditures. Central European, East European government should be increasing them somewhat. Of course, one can say, well, it's not all about productivity and growth. We want to live in a society that where we think the government is better at providing services. I don't think so, but many people seem to think so. But isn't it all about the quality of the spending, the efficient use of resources? Welfare spending doesn't say anything, would say Romania was very low on the schedule, the ranking you had. If you lower the average rate in Europe, it would 10% will be on the Romanian level. And that is not, you will not make certain that you will actually have efficient use of the productive use of resources. Clemens, do you think there is some kind of suggestions to politicians how they could change and transform the spending, the public spending to help enhance productivity in the economy, in Karimi? We have debated this a lot, and we have done a lot of research on productivity in various sectors, so very much like a input kind of driven solution. And when you look at these numbers and you study the societies of like North and Europe, obviously there is a component that is on kind of the productivity of input. But to me, there is also a larger and larger share that should come from ambitious target setting and say, why don't we say that we are going to make it a goal for us here in Denmark to have a average length of life of 85 years, kind of five years plus. We will be able to achieve that in the next 15, 20 years. That would give a hell of a lot of meaningful goals. It would give goals on education, it would give goals on technology, it would give goals on kind of some part of equality. So instead of just saying, I'm gonna make school teachers 10% more productive or I'm gonna adjust kind of things in the system, then say, we will actually put out some ambitious goals for us and drive very specific kind of reforms from that. That is the kind of methodology that I'm getting more and more appealed by. You have a short comment? I wonder if it's important maybe to distinguish between public expenditure and public provided services. So you can probably have quite a sizable state, but the state buying that service on the marketplace. And that is a very different economy, very different dynamic to productivity than the state trying to do everything itself. So like the state doesn't create their own computers because they need computers in their work, they buy those. Hopefully not. So the state can of course interact more with the marketplace in most European countries. And I think Sweden is a wonderful example of experimenting in a Scandinavian type model, experimenting with buying services on a marketplace. And that has impact on the efficiencies you get. Absolutely. And also it's about the productive investments. If the public sector is actually doing or state doing investments, it should be productive investments. So what, how can the state know about productive investments, you know? Well, it's obvious you have to invest in universities. Oh, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, service providers. This one. This one. The top question up here. I must present you for the top question here. What is your opinion on secular stagnation? Is it something that can be fixed by structural reform and fiscal expansion or are we doomed to lower growth? Bo, that must be a question for you. Okay. And it's by Christian up here, yeah. Well, basically, if you look at the determinants of long-term growth, that would be really productivity. And productivity is generally created by people getting good ideas that can be implemented to make production more efficient. So ideas are basically what generates long-term growth. And of course, if the population in the industrial countries are getting smaller and smaller, and of course, there's a risk that we don't get more and more of these ideas that will lead to higher productivity. Look at the post World War II period. Of course, we had huge expansion of populations in Europe and in the U.S. That created growth as well. Yeah, yeah. So there is a problem with stagnating populations because that could be what was generating the growth for the long haul. So there is certainly an issue there. Of course, you could argue that you could have a large share of the population going into research and development. And then in the very long run, of course, there is an upper limit, but still for a very long time, we could probably still do that. But what are the most effective structure reforms that actually should be done right now in Europe? Just give me some examples, Simeon. I was actually going to say that the idea of a country, a small market, or even a large market in Europe, having its own idea of how to run the state and having a welfare state more than other countries actually cannot exist within a truly open market. Because what happens then? Well, then people from Romania and Bulgaria say, well, other than the weather, I really like Denmark, so I'm going there because they're going to provide me with more opportunities. And then people who come from outside of Europe, as we have, I saw one of the questions here on migration and refugees, also come to Europe and then say, well, where should I go? Should I go to Bulgaria? Not very well paid, but nice weather. Should I go to Denmark? Yeah, the question is, Tora Sardovskas has actually questioned, is refugee crisis a solution to low population economical growth in Europe? That's the question. Is it? In my view, it is. Although this is a very hotly disputed view, so if I was a politician at the moment, I would probably not say it. But I'm listening to a politician and saying it's trouble, it's trouble coming and it's a high cost for the state, you know, welfare benefits, et cetera, et cetera. Look, we just, the previous discussion made this point that if you look at long-term productivity growth, it's basically more and newer people coming into high productive industries. Well, we don't have many people in Europe now. You can have some movement from Eastern Europe to Western and Northern Europe, and that's happening. But if you suddenly have an infusion of a couple of million people a year from outside of the Union to Europe, suddenly that can create the type of labor mobility that Europe lacks. It's not going to be immediate, however, because just the number of people is not enough. They have to be trained. They need to know the languages. They need to operate within an environment that is productive, and that takes some years. Boom. Yeah, of course. Sorry. As an economist, I would agree on that. But of course, we also have to consider the political issues here. And just taking Denmark here will be easy to find a majority against further immigration in Denmark for other reasons, because probably you think they are too difficult to integrate in the Danish labor market and Danish economy. So there is a potential, of course, but it's not easy to actually to reap that potential. And I'm quite sure in many European countries today and then mostly against the immigration flows that we're seeing at the moment. So it is a tricky question. There is a potential, but I'm not that optimistic. With all the labor market reforms, you can't really, it's difficult to integrate. We have a close society in some way in cultural terms as well. Recognizing Danish debate, if you talk about labor market reforms, you would even see some politicians backing off, well, now we're hurting our domestic, our ethnic Danes to integrate these refugees. And well, certainly someone would be against it. So that political issues there, they are important. Philip. I think to add to that, basically to full circle to your question, sort of what are the most effective structural reforms? I think what economists often ignores the timing of when these reforms actually work or when their impact comes. So if you take, for example, Simeon's proposal about the digital market integration, that impact will be extremely swift. US-European-Freeter agreement that has an extremely quick impact on creating productivity and growth. Now, investing in human capital, that's gonna take 25 years before you see the impact. So, and that's in a textbookish world, you don't worry that much about it, but I think in a political world that matters. And here migrants in some sense can be a quick fix, given that it is a right to human capital composition. And that I think is an open question. I have no idea if the migrant flows we can attract in Europe have the right human capital characteristics or not. They also studies economic studies done on this and actually the phenomenase when they're coming in the bottom of the market, actually the local salaries also are rising for domestic, okay? So I think what we need to think about is that our world is going to change quite significantly the next 15 years. So from a technological point of view, it's going to change much more the next 15 years than it did the last 15 years. And in the last 15 years, we had the internet, we had mobile phones, we found the Genome or kind of coded it, decoded it. So the change we will see is gonna be quite- Robotics, automation, sensors. It's gonna be quite staggering across all sectors, which means that we'll have relatively fast impact on the labor composition that we need. So if you look at the sectors that we have in, if you just take it at Danish perspective, right? And we have like the least productive sectors. We prefer European perspective here. Yeah, but you can also take the European perspective and say kind of take agriculture, right? Kind of low productivity, massive kind of reduced labor force. We have kind of the big middle service sectors. And then we have the high value ads, kind of pharma, machining, kind of things like that. And that composition, we know that we will have an enormous labor escape from transportation in 15 years time. I mean, it's not really a question. We know that's gonna happen. And we also know that the retail landscape is going to change quite significantly. So if we can kind of think those pictures out a little bit and then benchmark our productivity against that picture, I think it's gonna give us a lot of the answer. I think McKinsey have done many interesting studies on the resource revolution, the resource economy, whatever. And actually, we've talked a lot about labor productivity but also resource efficiencies coming in. And also as part of the question of a digital single market could also be effective in that sense in able to enhance an energy union being effective that people have knowledge about the consumption that actually at the home or at the labor place or it could be the transportation, whatever. So information and digitalization and resource efficiency is coming together in some way. But how can Europe do something that really matters in that field? Well, I think that comes back to what we said before, target setting. So I think actually energy and the renewable energy revolution is actually a good example of something that could become quite successful. So we completely changed the energy composition of Europe before all the markets and we are thus changing the energy markets and resource efficiency of the world. So setting targets for the energy sector, setting targets for digital trade in Europe and setting targets for health, if we're able to do that and agree on that kind of target and also have targets that the voters actually would like to have, right? Let's not kid ourselves and kind of put austerity targets that the voters don't want to have. Let's put out some attractive targets for everybody and derive things from there. So we don't take painful targets in Europe? No, but you need to have meaningful targets. That's an interesting point. I like targets, the idea they have to be, I think they narrow, for example, the 85 years life expectancy and then you work around it because otherwise if we just say we want to be, remember we had the Lisbon Agenda 2000 by 2010, Europe will be more competitive than the US, exactly the opposite happened. So we went down, the US went up, and then European politicians said, sorry, we missed it. So we need to have a narrow targets and then I agree with you, then we actually have a chance. I think what we haven't, and perhaps this is outside of our realm but I should just mention it, is that when we discuss Europe, you get to the point of who is Europe, so who are the decision makers in Europe? And you get to the point that actually, while at the national level we have governments and ultimately the prime minister or the head of state decides on things, in Europe it's not even clear who decides. The European institutions are still, let's put it politely, so still developing and evolving, that if you ask the question who decides, let's say on single capital markets, on single energy policy, it's not obvious. That's why we have the five presidents report, you know, there was this recent report, European report on the future of the Union, five presidents, European institutions, presidents wrote it. So that gives you an idea, nobody's deciding. No, they did not make a difference really. No, five people sort of met, signed something, I'm sure somebody else wrote it and then there is no decision maker. During the Eurozone crisis, you remember this famous phrase by Tim Geithner, the finance minister of the US, who asked, you know, when I had to ask a question or decide something on Greece, I don't know who to call. You have a quote in your new book coming out, you know, Europe is afraid of strategic thinking, too many tactical and incremental proposals are coming out, also from think tanks as well. So we have to think big, like you also proposed Clemens. What can we actually do in order to, to get out of this leadership crisis? Wonderful example of recent years is how Germany changed its entire energy policy and what it took was not meetings, it was not a discursive one, so the think tank, it was an earthquake in Japan. And suddenly that entire nation could do 140 degrees turn around. So wonderful crisis then, okay. And I think in a sense, you said in your talk, sort of you basically, is a bad decision maker that might be going on, but it needs, it needs a deeper crisis. And it's a shame that one sort of open wide-eyed is heading into a worse spot before it becomes better. But it appears to me that we have crisis all the time. So why don't we react, we react very slowly towards finding a new solution. Well, you saw it in the shots, we have so much litter, we have a good time in Europe anyway, and we don't work, so why worry? So often Europe probably needs a women crisis. Oh, yeah. If you look at the labor participation, I mean, you start late, and you go kind of early on pension, and half of the labor force has a much, much lower participation. So if you get a fantastic women crisis in south of Europe, we could maybe get the participation up. One of the key ingredients is going to be participation of women in that. It would not be migration of women from southern Europe. I'm open to all kinds of solutions. All kinds of solutions. I'm married to a Spaniard, so in fact, important university. Bo, there is a question up here. More growth might come with a cost. Is more inequality the price we have to pay? What do you think about that question? Well, there is no simple reason between growth and inequality. It can actually go both ways, I would say. So of course you can make reforms that will lead to more growth, and at the same time, it will hurt equality, but you can also do the opposite. So it really depends on the type of reforms you're making. So before we know specifically which type of reforms are, actually going to be pursued, we don't know if we'll get more inequality. But of course, as the markets are, I think there is a kind of a secular movement towards more inequality, driven by globalization. Does that need to be a problem with higher growth that everybody could benefit? Yeah, sure, sure. So it's more that if you, some of you that there is a problem of inequality and that sometimes it can lead to kind of social unrest and so on, but I guess there's not really strong evidence of that. But to some extent, you can see as long as you get everyone kind of benefit from it, there's probably no problem. But we also see that in the US, where the bottom of the income distribution has more or less had no increase in their real wages since the early 90s or so, but of course the top incomes have been running away. So it depends on how much this kind of trickle down will actually occur. And of course, if there is some trickle down, I think there's probably no problem in that. But looking at the historical perspective, we've seen central European and Eastern European countries coming into the single market, being part of this, having a high, we saw a high growth scenario in those countries being included in the market. So actually, looking at the historical perspective, we've seen less inequality in Europe, but maybe there are more inequality inside nation states. With the different perspectives, I think it's important. Since I spent about half of my time in the US and follow this inequality debate, not only as an economist, but also as a participant in the public debate there, it's interesting and also how it's very different from Europe. So inequality in the United States, just statistically, in the United States and the United Kingdom, is in fact increasing over the last 15 years. That's not the case in continental Europe, so just statistically. There is an increase in inequality, but it's very focused on the US, on the UK, Australia, actually, Anglo-Saxon countries, interestingly have this trend. In the US lately, this has become the main topic, both presidentially and otherwise. And what one finds, which has relevance for Europe as well, is that it used to be that if you get better education, you essentially are not in danger falling into sort of an inequality trap. You're going up no longer. In the last 10 years, even well-educated people in the US with university education tend to actually, in particular regions of the country, tend to become relatively poor. And this is a question, why don't they move? Because the US is one market, they should just move to better areas, they do not. Going to Europe, this is why I don't like at all this idea of let's now segment again Europe either because of refugees or because of others. This was going to happen in Europe. The little mobility that we have now, if we segment again in some ways, we're going to have pockets of poverty even in countries like Denmark, even in countries like Germany. We see this happening in the US. There's an interesting question here, it's also a connection to this conversation here about inequality and also about how to benchmark one-seven and what kind of perspective do we need to have? And it's yet questioning why benchmark us with US, the middle class in US has not experienced a better purchasing power the last decades. Do we want the Trump effect, blah, blah, blah? But what do we measure? And I think it's a crucial thing, what about the middle classes? This enchanted middle classes in Europe are frustrated and we also see some amount of frustration in the United States. What can we do about that challenge? Clemens. That's a big question. I was looking at this TV program earlier this week, showing two neighborhoods in Olbo with the difference of life expectancy of 16 years kind of within the same city. So there's this pocket of inequality and poverty in our societies that is quite staggering. And I think we will have to agree as a society where we want to go. Is that the road that we want to go down and kind of in 10 years that difference is going to be 25 years? Because that will have other consequences for society. So I actually don't have any kind of really good solutions for that. The big question is actually we had this idea of progress that actually our kids would come out better than ourselves, you know, and this is, there is some certain amount of crisis here because of many people feel that the kids are not coming out better than they and the lives, you know, getting more complicated, et cetera, et cetera. But they probably feel that way because it might be that way. And I think it is, absolutely. I think kind of this is a matter of transparency, education and granular measures to try to stem against this. But they just went to that. It's not that they thought that their kids, it's not only that they thought their kids would be better off in there. They also knew the way that their kids would be better off in there, which was through education. And now what's happening is, not to alarm the students among you, that even with better education, you actually not guaranteed to be better than your parents. And that's very, very by now prevalent in the US. And it seems in statistics to be actually starting to seep in Europe as well. So education doesn't buy you anymore the ticket to prosperous life. I wouldn't believe I would say this, but there are serious economies that start to wonder if you are measuring progress correctly, right? You know, all of you know this debate about... Also measuring growth correctly is one of the questions up here. In quality, how should we adjust for quality? The sort of health service I can get today is much better than 10, 20 years ago. Even so, income wise, I might still be stuck in the lowest end. I think the big issue between 10 years ago what we have argued in the US, what is the difference in the US is that those that are high productive individuals can afford to buy the services from the low productive individuals. Well, in Europe, we have installed our society so that we cannot afford to buy the services of the lower productivity individuals and force them to be out of employment or whatever it is. I think that's where the structural difference that could be tackled in Europe eventually. Bo, do you want to have a comment on this? No. No. I think I'll open up for some questions from the floor, actually, because there's one conversation going on here and someone is calling the phone. So, please raise your hands. We have some mics going around here, I think, yeah? Please. Somebody wants to raise a question or just continue. Oh, there's a question down there. Okay, good. Down there, run. Raise your hands. Good, and please tell us what's your name. You have yet to discuss climate policy within the European Union, which is a topic which most of the European countries agree upon. Is this a potential area where, when we all agree, we can all work towards a larger goal as the guy, sorry, the man from McKinsey argued? I forgot your name, sorry. Clements. Clements. Oh, Clements, yes. But should we discuss climate policy as the target sort of this bottom line? I mean, suddenly the Danish government is cutting subsidies towards, what's it called, energy policy and the, how we in Malpaga, sorry. Yeah, is this something where we should say climate policy, we all agree, let's work towards this goal and then we say mold the economy to fit this goal that we need to reach certain target or threshold? Okay, please. I think that's, I mean, that is my opinion. I think that's a great idea. I think that is a goal that where we have a majority of society that actually is worried about. We have scientists and a large majority of scientists that actually support the theory of human cost, kind of global warming. We have technology that can help us get these goals. We have a geography that means that we are a little bit low on oil. So there are many, many aspects here that says this would be a really good, meaningful goal for Europe that would help us to actually create economic and kind of labor transformation. So I kind of completely agree with that. Yeah, please. If I may add, it gets again to the point of how decision making is made at the European Union level. So we gave the example of nuclear power in Germany, great example, but one government, so Angela Merkel basically decides does it, it seems to now gain more popularity among Germans. In Europe we work on nearly every issue by consensus. So it's enough for one country to say we're against it and there are at least two countries that I know that are against it. Poland because of coal and the Czech Republic because they generally like to be against whatever the rest suggests. Okay, good. So we need a different decision-making process as well. Other questions out there? Oh, you're not timid here. Okay, good. Please make it short. As I heard it, increased economic integration within the Europe could be a solution to some of these challenges we face. But at the same time we see Austria depend in France, Kober in the UK and generally in all European countries we have the far right or the far left who are against globalization. How should we challenge these perspectives? Okay, someone might add something to that? I share that frustration. I think that has never been as easy to create an anti-EU argument and it's surprising and in particular countries have been the big winners of European integration. A country like Denmark, I think it's the 22nd richest country in the world to this day to day. Without any significant natural resources, no huge industrial bases, there's nothing special about the country, number 22 in the world ranking. Oh, is the German speaking? Yeah. Yeah. It's a great university, exactly so. And so obviously what is driving that is the ability to integrate this economy with the global marketplace and that is predominantly the European marketplace. And then it's surprising me. I think it's a, maybe it's our fault as economists that we are not good enough at explaining why integration is useful for the economy. So more research then. Okay. Well, yeah. Bo, could you explain? It might be right, it could be. Well, I guess you could also argue that the way the EU handles its policy administration could be sharp and somewhat. And I guess if we could cut somewhat down on the red tape in the EU, that could perhaps create a better environment for making you also a more active player in this. If I may on this one. Yeah, yeah, yeah. It's a red tape story. So you make it sound as if in Denmark there's no rules whatsoever. I mean, in Denmark, I mean, in Denmark, the state saves my money, so I have money to go on a holiday. I mean, how much rule is that? Do you like that? No, I say, so it's, we have this, these... And the red tape stories also is something about the single market. You know, they actually cut a lot of red tape around Europe. Yeah, but so the story goes, all the European countries would be total anarchistic market, free market economies, and it's only because of Brussels' regulation. I think the contrary is true. Every single European country has a bad track record of doing silly regulations, and at Brussels at least tries to harmonize it somehow. What do you think, Bo? Yeah, well, there's still a lot of animosity in the various countries that they think there is a lot of waste going on. And so if we're going to have a more greater desire for Europe to, Europe in commission to play a role there, I think each individual country, that the citizens there, should be able to see that what is done there is actually meaningful, and not just seen as a waste of resources. Okay, what's more, Evan? I think it is worrying that you mentioned some countries. For me, it's worrying that even some of the biggest beneficiaries of EU money, like Poland, like Hungary, like Slovakia, have turned smaller countries, perhaps in the bigger picture, but they have turned very nationalistic. Austria as well, actually in studies across the EU, who has gained so far the most from integration, it's actually Austria, because all of Central and Eastern Europe opened at some point, looked where to invest, and how to do it, and Austria was right there sitting pretty, so it benefited a lot. And to see Austria now turning against the European Union is quite striking, but not that populism, because it's populism, it's not just nationalism, it's pure populism comes because of two reasons, this rise of inequality, or in general, feeling that something is not quite working in Europe, together with a fairly stale political system in a number of our countries. So Austria has been around. But finally they got a green, unknown president. No, that's what I'm saying. So, but there were two parties there, highly corrupt by world standards, not just by Austrian standards, and somebody actually managed to win over them. We should be happy about that, because corruption in politics in Europe is, maybe not in Denmark, in the rest of Europe is actually quite high, and some change is useful. Have a last question here from the floor, okay? Somebody? Yeah, please. Just speak up. You have to shout loud, or repeat it. No, so I was wondering about this. I think we'll just wait for the microphone. Nobody can hear you back. Yeah. Please. No, I just wondered how I could get a job at one of these top universities. So, I know it's going to be difficult, but so you have this statistics with the US being predominantly in the picture, and that the question is, what can Europe do? Do you have a suggestion for what Europe could do? To make its own ranking, I suppose. Yeah, no, perhaps an even more productive solution. So, I've worked in, as I've said, I've worked for a bit at Harvard, I now work at LSE, so I've seen some of these universities. What is the difference between them and most of continental Europe, I would say? There is a huge, relative to most continental European universities, there is a huge focus on research, very well paid, so it's not, universities are thought mostly to be research places, and then you teach, and then the students learn not just in class, but they learn basically by being part of this research environment. Most of continental Europe is you teach, and then if you on the side do some research, that's great, but it's not really the main thing. So, focus a lot on research and internationalization. This is always a big part of just bringing new ideas, and Europe generally is lagging very significantly behind that. It's also competition, you know. Well, that's right, new ideas, competition, you're right. One question here, last one. I noticed that not one single member of the panel has mentioned monetary policy or European central bank. Then we'll have the question. Does that mean that you consider monetary policy or the Syrian interest rate policy or quantitative easing for absolutely useless in the context of economic growth? Okay, Simeon, you'll have the first one here. I have a contrarian view. Yes, I think it's absolutely useless, and in Europe it was done late, and it was done badly, and now that it's done badly and late as most European policies, we're doing it a lot more than we should before we turn the corner. So generally it's not the right answer to Europe's problems. And what about the Americans? They did it fast? I think they did it fast. It was the same wrong policy, but they did it much faster, and they finished quickly and declared victory, and then market somehow convinced, you know, these guys may know something that we don't know, so it must be right. Well, we waited and waited, and it was obviously wrong. Philippe. Well, maybe a bit egotistic because I don't want to change my entire reading list for the auto macro class. So there's still a room for traditional macro-economic policies, like monetary policy or fiscal policy, but we have to understand what Simeon's pinpoints is the trend growth, and that's very different from trying to navigate the economy through the business cycle. And I think the traditional macro-policy tools have said justification also in 2016 in navigating the economy through the business cycle to some extent. They might not be as effective as they used to be, but they still have some effect, but they don't solve long-term growth problems. Bo, do you want to come in? The ECB was kind of preoccupied with saving Greece and so on, so they probably had their minds elsewhere and also I agree, certainly, that regarding the kind of the more macro-policy in the EU, they were a bit late, for sure. We have one top question here. I must ask this question because it's really the one most voted, 42 actually voted this one. Henrik had asked, there have been 200 civilizations through history, all collapsed, is the European growth challenge a sign of history naturally repeating itself? Clemens. Oh, big question. It's a big one, but McKinsey's for big questions, aren't they? But kind of, the answer is obviously yes. It's just a question of time. Okay, in the end we'll all die. What do you think, Simeon? I'm actually more optimistic for a change on this. I think, fortunately, Europe is multicultural. You can enter Europe through many ways no matter how many walls we try to build various countries and it's still very attractive for basically the rest of the world. So we will be renewing ourselves, so to speak, simply because there are many other people in the world who still want to come to us. And as long as we have more people and we provide some reasonable policies to let them in and integrate them, I think that we will not only grow but basically experience good lives. Philip, you formally worked with McKinsey, I'm really sorry, but now you're independent researcher. Do you subscribe to the doom and gloom argument of Clemens? Well, yes, I actually agree with both because I note that out of these 200 something civilizations, a lot of them were European. So this we might be facing a collapse, but I'm sure that if you just wait long enough, Europe will be on top again. Bo? I'm pretty sure it won't happen when any of us here will be alive, but for those who have always a risk for that. And if you look at the way the world had developed, it's only like past 200 years we have any growth in the world. And well, it may not last forever. But what about the Brexit? That's also a question and as Hathorah said once more, Eastern European name is wonderful. Will Brexit start a contagion in Europe? That could be detonating this trend towards the final end Clemens. First of all, I think Brexit, hopefully it's not going to happen. I actually think so. And some of the brokers agree with me. No, but there is something around, if you think about the big dynasties of the world that have lasted centuries, the current European construction of governance, leadership and so on, is not a construction that's going to carry many, many centuries. That does not mean that we won't be able to improve it and change it and so on. That's obviously going to take time. But obviously if Brexit is going to happen, I think kind of what we can hope for is that that would be the crisis that we need to do some reform. So we get enlightenment after that. I'm hopeful that if that would happen, we could actually use it for something good. Some kind of new European renaissance after the sale of middle-aged... Renaissance, but at least kind of that is a proper cause for self-reflection. Philip. I think Brexit, if it happens or not, or the debate might have the one advantage that it helps Europe to focus on areas where it very quickly and visibly can show that it matters and that it actually benefits Europeans. And I think a lot of that are in economic areas, sort of the economic integration, digital integration. And so in a sense, the idea of disintegrating Europe and the might help it focus, because the history of Europe is it started, I think, with the coal and steel community, right? So it started with very simple economic idea. Now it must be the digital union. Yeah, so basically simple idea is that everyone, in a sense, this is good for us. Let's do it. And that might be a benefit of having the Brexit debate. Well, basically I think that the UK never been kind of wholeheartedly a member of the EU. So I'm not seeing that risk. You'd rather kick them out then. Yeah. I think they have been really trying to, well, get a good deal as possible for a very long time. And well, maybe it's not that difficult to get on without them. What would be the suggestions if you should really have three answers to the European growth challenge? What would be the priorities? What would be the main priorities for you in order to solve the crisis of growth and the trend towards stagnation and older ageing Europe, you know, even becoming Japanized? Simeon. I would say single digital market first. It's easy. You can do it literally in a couple of years. Single capital markets, we haven't discussed much, but a lot can be done to just finance new companies, new innovation. And number three, I would say it takes long time, but changing our educational system, particularly university educational system, to be more flexible. So less lecturing, more integrated process of, let's figure out how things are. Clemens. I think technology is going to be a key. I think that is going to be such a large change factor in the next years. So it's not only about digitalization? It is digitalization, it is genetics, it is kind of biomedicine, it is kind of automation and production, it is a technological broad revolution. So I think if we can embrace that, then that is going to be something that is going to shape most of the sectors that we actually need to kind of reform. So I think that's going to be a very, very large enabler. And then secondly, I think we should remember kind of why Europe is actually such a great place to live in and cherish those values, which is kind of unbelievably strong. I think we should be really lucky that we're living in this part of the world and have a positive outlook on growing old in this part of the world. So good, positive minds. Bo, I'll just jump. Well, I guess reforms will be important. What kind of reforms? Yeah, well, just as Simon's presentation showed, there's a great variety of problems within Europe and therefore suddenly one size fits all, I hope won't do, but each country will have to consider reforms of course, the countries where they have a very large number of people in the labor force, they should consider, well, what's the problem here? How can we address that? That may be cutting taxes in other places may be different differently. But certainly reforms that are kind of tailored to the specific problems that are most pressing in the different countries. And that was kind of the most important thing. There are some obstacles to growth in Europe and lots of rigidities that could be removed. So I'll certainly pinpoint that as... What is the biggest rigidity? But what is the biggest rigidity? Well, it's in anything from like pension ages to labor market regulations that can be liberalized and make it really truly also the European labor market. You'll have the last shot. Well, I would think of the most complicated is probably the human capital investment that Simi also mentioned. And I think that's where the most to harvest. But more shorter term goals I think would be... I would take the point we had in our panel right now is sort of the public sector developments. Getting the public sector more efficient, that frees resources in the economy. And I'm thinking health care, so there are actually a lot of efficiency to get there and that will be very important for creating growth in Europe. And the last thing, the simplest thing of all worlds is TTIP. It basically comes for free. You have to struggle down some special interests, but it will boost our innovation ability, our productivity ability, and it will probably also trigger automatically the digital development in Europe. Okay, thank you very much to both Sena and I. Thank you very much to both Sanderman Rasmussen, Philius Röder, Clemens Jartar and Simeon Jankoff for this wonderful conversation. And thanks to all of you for listening here. And I don't know, I want to give the word once more to Pierre. Please come up here. So I just want to repeat the thanks on behalf of the University to both Philip Clemens, sorry, Simeon, for thought-provoking, well, I have to say you didn't quite get to answering all the questions that I sort of thought I cleverly put. I thought the one on, I think Philip actually got off the hook a little bit too easy on the, where you sort of say, well, yes, Europe is down the drain. Well, they're probably down the drain, but eventually. So, you know, remember I had this question about the Roman Empire collapsing. Yes, we came back, but it took an awful long time. So, but anyway, so we'll have to go away and think a little bit more about this along with you guys. And I hope that all of you younger guys got a lot of inspiration to work on. So now you can start pestering econ professors and other on ideas for MSC dissertations, et cetera, PhD projects sort of falling from this. So I urge you to do that. And remember that I am the head of the Graduate School, so I get to get a look at this and prioritize things. So I would like to see much more on that. Because one of the things I see, and that's sort of a personal side remark. Of course, econ as a science seen from the head of Graduate School is becoming very, very fragmented. I realize, and I know the books involved and Philip and others that, of course, you have to learn the tools of the trade before you can master and address the bigger questions. However, of course, there is also the risk of spending 10 years getting into the nitty gritty of too much detailed methodologies. So sometimes I get the idea that there may be too few sort of projects opened up to sort of address bigger questions. So that's just a thought. Anyway, that's not your fault. So thank you again. I think we should give these guys a warm round of applause. Yet again, and then I'll give the word to FACHA for some final remarks. Boris. So big round of applause for these guys. Can I have the mic? Thank you. So first of all, thank you, everyone for joining us. It has been a really, really interesting experience. And we have already counted who have been the two most voted questions. Now we have two winners. The first winner is Henrik, who asked the question about the doomed civilization and if Europe is going to follow. Would you please mind joining us here on stage? And the second winner, and the second winner is Marcel for asking the question whether growth may actually come at a cost. So this is the second most voted question. Round of applause for Marcel and to Henrik, congratulations. So we have these two books, so The Great Rebirth, Lessons from the Victory of Capitalism over Communism. Congratulations, Henrik. That's for you on behalf of Professor Simon Djankov and as well, FACHA. So you also have the opportunity to have it personally signed by him. Marcel, you have the honor to get one of the latest books of Mr. Simon Djankov, which is Inside the Euro Crisis Eyewitness Account. Congratulations. Let's give them one round of applause for asking the provocative questions. Finally, this concluded our last part of the event, which was the public debate. However, we also need to mention a few very, very important organizations without which this event would have never been what it was. First of all, I would like to thank our sponsors. This has been Aarhus BSS, the Department of Economics and Business Economics for the generous financial support, as well as Aarhus BSS for the organizational support. Aina Hessell and Mercedes Benz, who have been the official transportation partner of this event, ensuring that our panelists travel in the utmost comfort, as well as the Tuberk Foundation, who has been so generous as well to sponsor a big part of the financial burden of this event. Once again, I would like to thank you for your active participation, for asking not only the obvious questions, but also the hard questions, as we saw. With these words, I'll wrap it off, and I would invite you, please, to join us for a mingling session, and as well, a little bit of food. Thank you very much for being an active part of Aarhus.