Diego Sánchez de la Cruz // 19 March 2025

Economic inequality is often used to justify state intervention in Europe, but historical data suggests economic freedom is more effective in reducing poverty and improving prosperity. Countries with greater economic freedom tend to have higher income mobility and well-being.

The report challenges the narrative of rising inequality, showing that wealth has expanded across all classes. It critiques excessive taxation and advocates for pro-business policies, labour market flexibility, and financial inclusion. The conclusion stresses that economic liberalisation, rather than redistribution, leads to higher living standards and sustainable economic growth in Europe.

The main conclusions of the report are:

• Economic inequality has become a central issue in European policymaking, often used to justify increased state intervention.
• However, a careful analysis of historical trends and empirical data suggests that economic freedom, rather than redistribution, plays a more significant role in reducing poverty and improving prosperity.
• This briefing examines inequality trends across the European Union, evaluates common misconceptions about wealth concentration, and demonstrates that countries with greater economic freedom experience higher income mobility and overall well-being.
• While many policymakers advocate for higher taxation and extensive redistribution, evidence suggests that fostering market-friendly policies leads to a more prosperous and equitable society.