Status Wars: Understanding the Psychology Behind Global Trade Conflicts

 In this episode, host Filip Brokes sits down with Carsten Giersch, Senior Partner at Berlin Risk Advisors and Managing Partner at ALL AML, for a wide-ranging discussion on how geopolitical events affect global financial markets. Recorded live at the FIBE conference in Berlin, this conversation dives into topics such as current trade tensions, the psychological dimensions of policy decisions, and how both businesses and governments can respond to shifting geopolitical landscapes.

Key Topics & Takeaways

1. Carsten’s Background
   • Academic history in Political Science, with a focus on international relations and conflicts.
   • Move to consultancy 15 years ago, co-founding Berlin Risk Advisors and ALL AML.
   • Specialization in due diligence investigations, integrity checks, and external money-laundering compliance.
2. The Trump Era and Geopolitical Shifts
   • How President Trump’s approach changed the global risk climate.
   • The interplay of “hard” geopolitical risks with “soft” psychological factors in policy-making.
   • The concept of an “imperial presidency” and how it erodes traditional checks and balances.
3. Impact of Tariffs and Trade Policies
   • The legal loophole behind imposing tariffs through a declared “national emergency.”
   • Potential consequences of escalating trade wars on global markets.
   • Why perceptions of fairness and status matter more than purely rational economic logic.
4. European Responses and Strategies
   • The possibility of EU retaliation via tariffs and/or regulatory measures on services.
   • Alternative strategies for Europe: new free trade agreements, investment in AI, green tech, and collaborative defense.
   • The need for regulatory balance: building resilience (e.g., through AML regulations) without stifling innovation.
5. Cultural Factors in Entrepreneurship
   • Comparing U.S. risk culture to Europe’s more conservative regulatory environment.
   • Potential reforms in education and policy to foster entrepreneurial spirit within the EU.
6. Outlook for Globalization
   • Why the rise of nationalist sentiments doesn’t necessarily mean an end to globalization.
   • The importance of free trade partnerships, from Latin America to Asia, for Europe’s future.
   • Opportunities for the EU to play a leading role in an era of uncertainty.

Quotes

• “It’s both about hard facts on one hand and about psychology on the other.”
  Carsten on why Trump’s policies have sparked greater volatility than previous administrations.
• “Loss aversion and status-based motivations can drive political decisions more than raw economic logic.”
  Carsten highlighting the psychological underpinnings of trade wars.
• “This crisis is also an opportunity for the EU to define a more progressive, open-minded agenda.”
  Carsten discussing how Europe can capitalize on U.S. isolationism to strengthen its own competitiveness.

References & Further Reading

• Berlin Risk Advisors – https://berlinrisk.com/ 
• ALL AML – https://allaml.eu/ 
• International Emergency Economic Powers Act (1977) – The U.S. legislation Trump invoked to impose tariffs - https://www.congress.gov/crs-product/R45618 

Connect with Us:

• LinkedIn: https://www.linkedin.com/showcase/integrity-insights/?viewAsMember=true
• Berlin Risk Linkedin: https://www.linkedin.com/company/berlinrisk/?viewAsMember=true
• Website: https://berlinrisk.com/

Transcript

Hello. Hi, Philipp. I would like to actually, before we get into the introduction, I would just like to kind of paint a picture for our listeners who are not here physically. We are the five conference in Berlin. In Berlin. We are sitting in, in a, in some sort of a box that looks like a, you know, like one of these boots where you would take a smoke at the airport.

So it's a very fascinating environment. But over to you. Carsten, can we please, can you please introduce yourself, tell our listeners here who you are, what your background is. Thank you Phillip, for having me here. My name is Carsen Geers. I am a senior partner at Berlin Risk Advisors and managing partner at all a ML.

There are two companies specialized in the area of due diligence investigations. I'll say a couple of words about the difference between the companies in a in a second. My background is academic background in political science, so I've been working for many years at a university. Studying international relations, international conflicts and and risk management, and then moved into consultancies 15 years ago.

And I'm a co-founder of Burden Risk Advisors and, and all MLH burden risk advisors. We focus on integrity due diligence, investigations, so more in depth on future business projects and, and partners. So we do really thorough investigations of the background and of prospective counterparties and try to identify legal interpretational risks attached to them.

And at all a ML we have a different model, so we specialize on, on investment funds, managing companies. So we are external money laundering officers and we try to keep dirty money out of investment funds. Thank you very much, Carsten. And if it's not clear already from Carsten's introduction, Carsten is is the perfect person to talk about the topics of PO politics, geopolitics.

This is why I invited Carsten on this podcast to, to, to talk about the current situation, global situation. Maybe we can start with. A subject which going around this conference, I can see that a lot of people, I've seen a lot of ref, I've heard a lot of references to this people, people have apps, people trade stocks on their, on their, from their phones.

Everyone see this, this market crash, which is something that we have been seeing pretty much since Trump took office at the end of January. But I guess my question is, all these geopolitical crises, be it the war in Ukraine. The Middle East that has been there before. So what, what, what, what changed? Like, why is that only the, why does the financial market react so, so strongly now as opposed to even before Trump took office?

Yeah. I think geopolitics is, is both about hard tracks on, on one hand and about psychology, and I think this is really what constitutes the change. President Trump has created multiple new geopolitical heart risks. Simultaneously eroded the trust and confidence of partners and markets and the reliability and credibility of US politics.

I think this is the key, key difference here. There are essentially four elements which have a longer tradition in US history, but came to a joint culmination, culmination under under Trump, and it is important to take into consideration that geopolitical risk emanate emanating from Trump's making America great again.

Those risks have both a domestic and an international component. I think these components really work together and mutually reinforcing each and each other. So let me start with the domestic components, if I may. So there is the concept of imperial presidency, of what we are seeing here. So this reflects the view of a strong man or strong man actually being the defining actors in, in global politics.

So he's has a tendency to expand the executive powers. To limit all restrictions foreseen by the American constitution in terms of checks and balances. So the concept that we are, have been gotten used to as restraining the powers of American president. So he kind of tries to get rid of that. And this is causing a lot of insecurity.

Yeah. And he's also threatening people, removing people who could attempt to re resist him. And he's even trying to gain control over the judicial system. Something we can read almost every, every day. Even ignoring their verdicts. Then this concept of imperial presidency is combined with anti-liberal politics.

So this's also something that we are seeing every day, either by Trump statements or by statements given by his closer onto harsh. So he seems to feel close to authoritarian leaders, including Russia's president Putin, and to right-wing populist parties in in Europe. This is the expression of a cultural revolution.

Really, this is my reading of a nationalist conservative movement. They're trying to disrupt state institutions, and this also creates a greater uncertainty about the future of American democracy. And then in addition to those more like, let's say, domestic developments, what we see is the revival of partial isolationism.

Yeah, so that is something that we've seen the past of American history before, but this is coming, coming back at least vis-a-vis Europe and the eu putting in question the US commitment to, to NATO and to defending Europe against the Russian aggression, which might go beyond Ukraine. So there are real scenarios at the moment and thinking that this might might happen.

Trump is not really, you know, giving any assurances to the eu, but instead offering Putin a deal with concessions, which are unwanted by, by Ukraine really, and leaving everybody guessing if there are still credible security guarantees. And a function system functioning system of the tets by by nature. So this is essentially the, the concept of great power politics as politics of influence spheres.

So he's kind of. Telling Russia, well, you can have parts of Ukraine. That's a legitimate claim. Yeah. While at the same time he's claiming control over other territories, he himself is claiming control over Greenland, Canada and, and, and, and Panama Canal, for instance. Yeah. So all this has eroded a lot, the Western institutions joint values.

Adding now to the insecurity and lack of trust towards the Trump administration. And then finally the fourth component. Well, he is pursued extreme protectionism, so that is quite clear. Now I we're speaking about the tariffs by the, particularly the tariffs, of course. Yeah. And so he has enacted unprecedented, unprecedented tariffs package.

We all witnessed that last week. And so this has actually the potential of trigger triggering a global trade war. And that led to a large extent, destroyed the trust in trade that included arbitrary tariffs and targeted not only opponents, but also partner countries. Yeah. So he not just targeted China, let's say, as a major arrival Yeah.

Country, but also targeted partner countries like in the EU or Canada or Australia. So this was the combination point of an American first policy and the send the markets tumbling. There's a serious risk of escalation now. So it's both. He created hard geopolitical risk factors. Yeah. And at the same time undermine the, you know, any credibility or any security guarantees or any trust in the reasonableness of both American foreign policy.

Mm-hmm. Let me maybe dig a little deeper into the tariff issue, which you lost, which you mentioned at the. Just now, is it something, because that's what I, I hear this all the time. You know, when you listen to interviews, podcasts, on the subject, I think there are basically two camps, two groups of people, one experts would, their position is that there's actually an, a co coherent economic policy behind this, and other people are saying that this is, this is all like completely random, but almost like policies created on a, on a whim.

You know, where do you, you know, where do you, where do you fall on those, on this question? Like coherent economic policy or? Randomness. Well, that's, that's a very good question, and I would actually like to, to offer a third perspective on this if perfect. If, if I, me. So I, I think this is what, what happened is, I think something that, that underlines that since Trump has been taking office, everything should be rather being viewed as a.

As being driven by status and power politics rather than racial interest driven politics. Yeah. So it's neither just a TV show. Yeah. Or completely rational economic, alternative economic program. But there's a lot of psychology behind that. And you can see again, I mean, I, I tried to look at these developments from a different.

So most observers are puzzled by the extent to which Trump destroys all the, what we assumed would be common sense in American politics. And many thought Trump is just, you know, a deal maker and deal making guy, and in the end he will negotiate and everything. What he announced will not be so and so extreme.

But if we, well, there might be a, to a certain extent. This might might still be true, but if you look at the underlying narrative of all of this Yeah. And it really is important to, to consider this, I think he has been talking about all of this for years, even for decades. So some observers went back in time and you know, he has been ranting against the EU or other, you know, countries 40 years ago.

So that is, that is not completely new. So there's a certain continuity. So that includes. His, his hostility towards the EU has just, you know, being founded in order to explore the US for instance. Yeah. To screw the us. Screw the us Yeah. Also mind the wording. Yeah. He's been raging against other countries in terms of unfavorable relations before particular China, of course.

Yeah. And he has been a, a critic of a strong dollar before. Yeah. So, which according to his assessment, puts a US manufacturing economy at a disadvantage. And domestically, he is also been ranting against immigrants and liberal politics for some, some time. So there's a certain element of coherence. And what I read from from all this is that this is a narrative of suffered losses in the past, victimization by other countries, and at the same time claiming a better future by making America great again.

So that is the term. So this is the narrative and he's com campaigned quite successfully on, on this narrative. Particularly appealing to the American worker who, you know, he convinced to to vote for him. Yeah. And he promised to rebuild and he is promising to rebuild a manufacturing business in the us.

Well, you can think, this is kind of weird. This is just a populist agenda and I don't think so as this is quite a strong commitment and includes a narrative of both cultural change and overall improving the American status. The differentiation between what I would call interest based politics vis-a-vis status based politics is important here because it drives a different approach to the politics of negotiations versus conflict escalation.

So I think he's Israeli status driven and, and, and why there might be a mixed motivation. It is important to understand that status plays a great role in driving the risk taking behavior. So, and this is where we are coming to the, to the key point. So it's well known inside from psychological studies that in conflict and other decision making situations, loss aversion frames, status conflicts and aversion against perceived losses weighs higher than the outlook of securing equal gains.

What that means is that this psychological distortion drives extreme risk taking. Yeah. And this is responsible for escalating status conflicts to war where nobody's willing to back down, even if escalation is economically harmful to the country. And, and, and people, and well, uh, you think this is, kind of, sounds a little bit, uh, weird or absurd, but just remember what happened with, uh, UK's decision to Brexit.

Yeah, so this was a decision made to motivated also by perceived loss of sovereignty and independence from from the eu. So they also used a similarly hostile rhetoric of exploitation and so on. We all remember that, and there was a claim to regain a former greater status and to reestablish a glorious through bilateral trade agreements.

Yeah, in fact, it was an extremely risky decision. Where many warned against likely negative consequences, uh, economic consequences. And we know that there are certain regrets now. Yeah. In the uk. So this, so we can see it's not just the decision in decisions about war and peace, but also in decisions about economic policy where this psychologically element might be valid.

Yeah. So Carson, if I understand you correctly, because this is a lot, this is quite complex a topic. If I, just to make sure I understand. So you're basically saying, or the, the way this theory applies. In this particular case is that there might be with some coherent economic policy behind it, but it's not even as important in this particular case because the status driven agenda kind of primes the economic planning.

If the status is like more important in this case than, than having like a bulletproof Yeah. Economic strategy. Yeah, exactly. Exactly. He is. This is a huge gamble. Yeah. And, and, and if we look at the rhetoric, it's a rhetoric of resentment against opponents taking a revenge. Mm-hmm. Yeah. And, but also revisionism.

Yeah. So basically reestablishing the glory's path of over time when allegedly United States was better off with, with terrorists, which is something that obviously economists and historians dispute. Yeah. And I think, so basically he's ready to accept by this concept of making America great. Great. Again, through terraces accepting high risks.

Yeah. Regarding possible negative consequences for economic interest in the short term, just in order to reestablish the status. Yeah. Mm-hmm. Thinking this will benefit in the long, in the long term, which is questionable. Of course. Yeah. And so if we look at the, the, the actual foundation. Yeah, that was, that was my, that was my next question, basically.

Like, because I'm, I'm sure like most people actually are not familiar with the, with the, as you say, with the foundation or like on on what basis, where actually those tariffs imposed. Like if you are, if you ask me several weeks ago if the president of the United States has this kind of power, I would probably think not, but apparently Well, what he, what he did, he pulled a clever trick.

Yeah. Something that he did not do in this first term. So, so basically he, he is, his legal basis for, for the tariff package is a national emergency declaring a national emergency, and he pos the tariffs under the International Emergency Economic Powers Act from 1977, which was initially meant to apply to war situations only.

Yeah. But, but if you look at his, the, the introduction when you introduced the, the terrorists you refer to. Similar, using a similar rhetoric that he used against immigrants who, who he, you know, alleged of being out to rape, pillage, thief, and plunder. He now said, said he, uh, he used to complain about unfair trade deficits, saying the US has been looted, pillage, raped, and plundered by other countries for decades.

And so this is how he, how he justified a Nash declaring a national emergency. Yeah. And based on that, he, he invoked the International Emergency Economic Policy Act. Yeah. And, and, and the rational is to strengthen the international economic position of the United States. And now this is important to protect the American workers.

This is like explicitly stated in the doctrine. It is explicitly stated, and, and this is something that is a little bit disregarded in the, in, in, in, in most of the media, he's appealing to the American worker. Which is strange given his background and also his, the, the entourage that the billionaire people that he is circumvented by.

Yeah. And who probably also now is a bit, a little bit surprised about this, about this approach. But if you listen to JD Vance and others Yeah. And to the people who, who he listens to and we implement his approach. So this is actually the reference, the American worker. So rebuilding man factories, manufacturing business for the American.

Worker and by that getting self sustainable and, and, and all of that. Yeah. And so, well, this is the, the background to establishing those 10%, you know, basic tariffs. Yeah. Plus the so-called reciprocal higher turfs on the countries with which the US has the largest trade deficits. Mm-hmm. If you listen to econom economies, that economists, they all say, well, this is rubbish.

Yeah. But, but nevermind. He doesn't, he doesn't, not clearly not the economist that he listens to. No. But, but all the international experts, they say that the whole rational behind this is, is rubbish, but it's not about rational arguments. Right. That's what the state is. Yeah. Yeah. Okay. Understood.

Interesting. And we, I mean, we started this conversation by talking about the, uh, the stock market, obviously. This was following the, the imposition of the tariffs. This was the first kind of the, the signal that most people, or like anyone who is kind of trying to make some money with their savings, so everyone noticed the impact of the tariffs in the, in the short term.

But what can we expect? Which, what would you say is like, what can one expect in, in terms of like, let's say midterm, you know, expectations as a, as a result of the, of this, of this move. Well, I mean, look, if if, if we look at the, at the impact now, the, the downfall of the global stock markets after the announcement mark, the, the shock obviously, and, and then there is this, you know, the, the, the question will China retaliate?

Yeah. With, with their own terrorism. There's, as far as I can, I can, you know, I would expect there is little other choice for them. Because they would also lose their face though. So this also now develops into a mutual status conflict. Yeah. So unless there is a breakthrough and somehow they kind of agree to avoid a full out trade war between China and, and the us this will prob, might, might actually escalate.

Yeah. And if it escalates, then this will have a, a much stronger effect on the world's economy. Obviously already the dollar has weakened by the lack of trust into the reserve currency. So that is actually, might even be in effect welcomed by the Trump administration. And we look at previous statements and also other plans.

The Maa Largo accords, the communists, so to speak, uh, where this is a scheme, alleged scheme to kind of weaken target, weakening of the, of the dollar in order to improve exporting business in the us. But, but actually what I already indicate, most e economies expect a double self-harming effect on the US economy by high prices on the imported goods, driven by both the tariffs and the weakened dollar.

And as a consequence, this will drive inflation in the US the interest rates would go up. Yeah. This is why Trump is trying to pressure the Fed to lower the interest rates. But o obviously if you have increased inflation, that is difficult to, to do. If the interest rates go up, then this will in turn have an effect on corporate lending and reduce investments.

By that the economy, economic growth in the US will go down quite likely. Yeah. So that is actually what the, what the experts, the economists foresee and, well, there is a rationale behind this, you know, traditional modeling that will, that predicts us recession and, and also maybe expanding to a global recession.

And this would be quite the con contrary outcome of, you know, the envisioned increased economic growth and, and, and growth in manufacturing and, and drop drops growth. Yeah. I mean, I guess my, my, my main question listening to kind of like, you know, following the, the, the news cycle and, and not just in the recent weeks or, or months, but pretty much since the, since the reelection and already since the first Trump's term, is, is basically, is this the end of globalization?

You know, this is, I'm, I'm not gonna disclose my age here, but like, I I, I grew up in a world where this was the, this was like this, the, you know, the, the, the, the, the basic modus operandi. And now I'm kind of fearing that this might no longer. Yeah, no longer be the case. So I dunno what your take on that is.

And, and since we are in Europe, I mean we have more mainly talk about the US but that we are in, in Europe. So what would, what do you think the Europe can do to, you know, mitigate the, the, the fallout? Well, I mean the European Union has, is, uh, various options. Yeah. And, and one option would be retaliating by raising their own tariffs.

And they might partly do that on the one hand. Also like covering American company companies dominating the media service actor like Google, Amazon Meta and so forth. 'cause the tariffs are only on goods. Yeah. So that is, that is the irony of it. The United States as a surplus in in, in services. Yeah. You know, there might be a, a retaliation by the you on, on the service sector instead.

But while this, as I mentioned before, this is there's a serious risk of escalation then. Yeah. And maybe that is not suitable to, to solve the matter and to avoid, uh, recession really. Second option is to build more plans in the us So this is what Trump would really like to see. Yeah. So the more. Companies, international companies come and build factories in the us Yeah.

So like Volkswagen, moving to Volkswagen, some, some of them doing that already. Mm-hmm. Uh, to quite extent in, in particular, the German car manufacturers are, have their, you know, manufacturing plans in the, in the us uh, and other companies. The problem here is that again, there was this, that we are back to psychology.

Yeah. Trump is not really giving any assurances or predictability on the matter into the future, which would then, you know, hardly be greater and attractive, you know, condition for, you know, invest for foreign investments in, in manufacturing plants. And the third option. For the EU is obvious. And this is the question to your, to your answer, is that the end of globalization?

I don't think so. I think the, the EU is, is a, is a huge market. Yeah. 470 million inhabitants. Yeah. And they have the power to extend free trade instead of the United States. I think this is a huge opportunity. They should extend trade with other global regions in Africa and Latin America and Asia. Be more attractive for investments and to, to improve its, uh, competitiveness.

So there is a crisis, but there's also opportunity as they say. And, and in fact, if we look at what, what happened since December already, so the US adopted the free trade agreement with me. So this might, after years of negotiation might actually become reality. Sorry, you said the US or the European Union?

The European Union. The European Union. Did I say us? No, sorry. I think so. No, I'm sorry. The UU has adopted mm-hmm. A free trade agreement with us. No, that, that's interesting because I remember that solar, when I was doing my bachelor many years ago, this, this was, I was looking into this at the European Union trying to establish Yeah.

Like working relationship with mer. So it's good that it, it finally happened after 15 years. Yeah. Yeah. So this, this group created a free trade era with, uh, 7,000 and 15 million in ants. So it's quite. Quite impressive us also adopted a free trade agreement. Mexico, yeah. Still needs to be ratified, but, but there is a huge opportunity.

Now you might also join the comprehensive and progressive agreements for transpacific partnership. So which is, which comprise of 12 countries, including Australia and New Zealand, Canada, Japan, Malaysia, Vietnam and Singapore. So a lot of larger countries. And, and the u is now aiming to conclude the free trade agreement with, with India.

Yeah, so there's a lot going on in terms of free, expanding, free trade. China is a little bit of a tricky issue as we know, because this is ambiguous undertaking. We are also concerned in the, in the, that China should abandon its anti-competitive practices, practices of using state subsidized or state owned companies.

To produce over capacities, which will then are then exported to, to the eu. So this must end in order to really expand the trade with, with China, but obviously this should not be excluded as well. Yeah. And you mentioned also the, I mean, so is the 1, 1, 1 way is to reroute these, these trading channels to become less dependent on the US and work with, as you said, MER or these other regional groupings or.

Or countries like India, but he also mentioned the word competitiveness. Obviously this is also, I mean, m we are at five, but this, at this conference, this is the, this is the buzzword here. What, what do you think the Euro, the European Union can do to improve its competitive edge? Well, I think the, the, you should, should is RA doing a lot now and must, must continue on this, on this path.

So it's, I think, a mixture of good regulatory measures on the one, one hand in order to be resilient Yeah. Vis-a-vis specific geopolitical risks. And at the same time to create attractive conditions for, for investors in times of uncertainty. I mean, this is what we, what we are really looking at at the moment.

So there is, for instance, the new capital requirements regulation with three standards, which enhances resilience and capacity of the banking sector, which is really important. View of sustainable finance. Then there is, there are major threats posed by cyber attacks, which is addressed by the Digital Operational Resilience Act, Dora the DO Rise in Force in since January, 2025.

So these are important regulatory measures, but more important use should is has also put in place investment and growth initiatives already, like the Invest eu, which is a longer tradition. Just meant to help mobilizing private investments for the eus top policy priorities such as green and digital trans.

The transition and innovation, and was recently increased in February this year to improve eus competitiveness. So this has become a larger pot, so to speak, which can be used in order to promote innovation. And also in February, you launched the Invest AI Initiative to support investments in the development of artificial intelligence.

And I think this is understood now in the eu, you know, for for many months this, the perception was a little bit that, you know, uh, everything's happening in China, in the, in the, in the US in terms of development. But no, I think there is a clear, uh, momentum now to also develop this AI business in, in Europe.

Then we have a new focus area, which is also important in the context of geopolitical risk, and the new focus is defense investments. I think this is really important. There's a initiative called Readiness 2030 now, which boosts defense spending by the EU members, including Germany, but also to promote collaborative defense procurement projects.

There has always been a problem in the past that you know, every country has its own procurement programs. This should also happen as a stronger EU initiative. And the European Investment Bank and the EIB previously focused on green transition now has doubled its defense related investments to a 2 billion euros.

So that is, that is happening. The, this is is an important, I think, element to being resilient on the one hand, promoting innovation on the other hand. I think this is the essence that least we can do in order to improve deterrence also against potential future aggression from Russia signaling that we are actually willing to take security in our own hands and not to completely rely on security guarantees by by nato.

And then there is finally one important element, and this has been, you know, a topic also for many years. And hopefully we'll get some, see something happening there as well. The EU initiatives meant to mobilize private capital should be complimented by finally realizing the capital market union, the creation of a single capital market for the eu, which would really benefit investors, companies, and consumers, and hopefully this crisis will.

Help to create the momentum to, to realize that capital market. So it can be used as an really impetus to, to kind of bring about these changes that have been in the pipeline for a long time. But now it's kind of, people are realizing that it's, it's, it's really now or never e Exactly. I think this is the, uh, the good, a good moment instead of just staring at, at, at the developments in the US and, and this, let's say, unpredictable.

President Trump with his own agenda. I think this is now the, the time to define your interests in a more progressive manner. Mm. Let me ask you, maybe just one last question. We don't wanna exceed too much our format, which is usually around 30 minutes, but I, I, I, I really wonder one thing about these, basically it's related to this last question.

What can the European Union, what can Europeans. Due to increase their competitive edge. And from my personal experience, I just notice like I spend some time in the us I have a lot of American friends and I, and I feel like there's also a cultural difference that the US are just like young people in the us they're, they seem to be much more likely to, you know, start a business to take risks to, you know, when they're 18, spend some time in their parents' garage and do some all, all sorts of things.

And I feel like it is just not the culture in Europe. And the initiatives that you talked about, this is obviously all like kind of bottom down, but this cultural shift, this is more like bottom up. So I was wondering what, if you have some thoughts on this, how can, how can also, I don't know if the European Union or the National States can kind of like help to kind of shift, uh, this culture, change the culture.

Well, that's, that's a very good, good point because I just mentioned that, you know, the, the national is conservative. Movement in the us, which is like a cultural change, and now we have the opportunity to also implement a cultural change, but be more progressive, being more liberal, being open-minded. And this is, I think this is, there are two elements to this.

Yeah. We have this tendency in the, within the European Union to over-regulate things. Yeah. So that is, that is important to, to understand. So there are some, some areas, uh, areas where, where you need regulation in order to be resilient. Yeah. Let's say for instance, you have this EU anti-money laundering regulation out from 2024.

This will enter into force in 27. And currently we're looking at, you know, the, the details, the standards that are being developed. And this can go two ways. So either it's kind of very formal, very, very, uh, extensive or rules-based, or this will go risk-based. So basically focusing on the real risk and, and being, they're being balanced in order to be compliant on the one hand.

Not to put too up, too up, too many barriers. For instance, for to ing, let's say innovation. And this is, I think, a part of that mindset that needs to, needs to change. Because I do believe that there is now the time to leverage entrepreneurial spirit, and this should not be, there should not be too much inhibition by, by, you know, regulatory barriers.

So that is, that is one, one important point here. On a more basic, if you look at a more basic way, I think the entrepreneurs really started school. Yeah. So that, that needs to change though. Education is a lot, there's a lot of opportunity there when you look at how, how topics are taught at school, that that needs to change.

Definitely. This should continue throughout the university and it should encourage risk taking. Yeah. So that is, there's no innovation without taking, taking risks. And, and this is why I think there is now, is that is encouraged and also leveraged by, you know. Funding in particular. Yeah. There's a good chance that the Europe might establish itself as an alternative to now the backward looking us and being the open-minded liberal progressive continent in the world that is attractive for free traders and, and, and global innovators.

I like that very much. I think it's always good to Anton and positive note on then like setting an agenda, what you can do as opposed to just kind of complaining about what is happening elsewhere. So. Thank you very much for that Carsten, and also thank you very much for your time. Really appreciate it. I know that you're very busy, so I'm really glad that you, you could come on the podcast and yeah, thank you.

Thank you for Philip. It was a great pleasure.