Europe needs energy, indeed, but more than electricity human energy, that which is propelled by risk taking.

Sir, Leif Johansson, the chairman of Ericsson and Astra Seneca, when urged by the FT to pick out one issue that needs to be addressed to make Europe more competitive, suggests: “energy; both security of supply but also energy competitiveness especially versus the US”, March 31.

I would agree but, instead of energy represented by electricity, which is what Johansson refers to, I would argue for the need of more human energy… that which is driven by the willingness to take risks.

That human energy is currently being killed by regulations which allow, in Europe more than anywhere else, banks to earn higher risk adjusted returns when lending to the “infallible sovereigns” and the AAAristocracy, than when lending to the “risky” medium and small businesses entrepreneurs and start ups.

Leif Johansson should remember that in the churches of Sweden psalms were often sung imploring “Gud gör oss djärva”, “God make us daring”.

Right now banks in Europe are not financing the risky future, they are just refinancing the safer past… and that Europe, is no way to go.

Europe (and America), allow your small businesses and entrepreneurs to compete with "The Infallible" for bank credit on equal terms

Sir, Wolfgang Münchau in “Competitiveness is good but it will not save the euro” July 12, basically begs Europe to set aside all mumbo jumbo on “institutional reforms and structural reforms” and first solve what is “ultimately a balance-of-payments crisis”. 

Mentioning “intellectual muddle”, and the “distraction of the nebulous concept of competitiveness”, Münchau suggests “reforms that serve a specific and well defined purpose”, and to “separate these from reforms with unproven effects” and even “from those that stem from pure rightwing ideology”. And, “With youth unemployment at 52 per cent in Spain”, and “a fragmented labour market which protects workers with a permanent labour contract but discriminates against outsiders and the young… this should be the priority for economic reform”. 

Of course, sounds reasonable, but, what has “the balance of payment crisis” to do with youth unemployment? I did not really get that. 

For me, again, the primary cause of a balance of payment crisis in Europe is bank regulations that kept banks from allocating economic resources efficiently within Europe, and instead made them allocated these mostly to “The Infallible”, based on something as nebulous as what was officially perceived as absolutely not risky. 

Before the odious discriminatory regulation of capital requirements for banks, based on ex ante perceived risk is completely eliminated, neither Europe’s balance of payment problems, nor its high youth-unemployment problem, stand a chance of being solved in any sustainable way. 

Mr. Münchau some type of competitiveness matters a lot! For instance Europe (and America) should allow their small businesses and entrepreneurs “The Risky” to be able to compete with "The Infallible" for bank credit on equal terms.

But, if you absolutely can’t stop your regulators from distorting, a genetic condition, beg them at least to set the capital requirements for the banks based of potential-for-job-creation-for-youth ratings?

PS. Bank regulators committed an act of high treason. They did not do it on purpose. Otherwise they should be shot!