Jamie Dimon's 'middle powers', 'fantasy' remark on Europe goes viral

Dimon rejected the idea that middle powers could unite effectively to counter larger economies, pointing to Europe as an example

JPMorganChase Chairman and Chief Executive Officer Jamie Dimon has criticised Europe’s economic model, arguing that high taxes, weak investment incentives and sluggish growth have eroded the region’s economic standing relative to the United States.

 

Speaking at an event hosted by the Council on Foreign Relations, Dimon rejected the idea that “middle powers” could join forces to counter larger economies, citing Europe as an example. A video of his remarks has gone viral on social media.

 

“When Mark Carney said, ‘The middle powers should get together’... it’s a fantasy... They did that, it’s called Europe,” Dimon said. “The GDP of Europe has gone from 90 per cent of America to 70 per cent. And in our view, it will probably continue to erode over time because of high taxes.”

 

 

Dimon said Europe’s economic challenges go beyond taxation. While clarifying that he supports welfare programmes, he argued that social safety systems in several countries are costly and do not deliver sufficient economic benefits.

 

“I am not against social safety nets, but they are too high and ineffective in a lot of countries. They have 100 per cent debt to GDP also, but, you know, growing slow is much worse with 100 per cent debt to GDP than growing fast,” he said.

 

He also criticised what he described as policies that discourage investment, saying capital tends to flow to economies with stronger growth prospects.

 

“They’re, you know, kind of anti-business, you know poor tax structures that stop investment. Capital formation generally drives growth. A lot of that capital is moving here,” Dimon said, referring to the US.

 

Highlighting the gap between American and European financial markets, Dimon said US stock exchanges had grown far larger than their European counterparts.

 

“Here’s some big numbers for you — our stock exchange, it is worth $60 trillion, maybe $70 trillion today. You know Deutsche Börse? Three. You know, the FTSE at UK? Four. The French one? Three. And that is serious stuff,” he said.

 

Dimon also referred to a report prepared by former European Central Bank President Mario Draghi, saying it offered a roadmap for improving Europe’s competitiveness.

 

“So Mario Draghi wrote this great report. That is what they need to do: have a real European Union open, you know, trade services to everyone in there, have a big common market, have a growth strategy and policies that can drive growth. And we should help them,” he said.

 

Last year, Draghi called for Europe to adopt a new industrial strategy backed by annual investment of about €800 billion to help the region remain competitive with the United States and China.

 

The European Union has a population of around 450 million, compared with roughly 342 million in the US. Its economy is valued at about $20 trillion, while the US economy is estimated at nearly $29 trillion to $30 trillion. Despite the gap, Europe remains one of the world’s largest consumer markets.

 

Dimon has repeatedly argued that a stronger European economy would benefit both sides of the Atlantic.

 

In an interview with Bloomberg Television during JPMorgan’s Global Markets Conference in Paris last month, he said resolving trade disputes between the US and Europe would support stronger economic growth.

 

“If you asked me what the goal should be for our economic relationship with Europe, it should be having a stronger Europe,” Dimon said. “Both the economies would grow better.”

 

He made a similar case last year, saying closer transatlantic cooperation remained important. Speaking to Fortune, Dimon said, “America First is fine as long as it isn’t America alone.”