Rule of Law Framed as Foundation for Economic Stability
This January, the Council of Europe’s Secretary General will attend the World Economic Forum in Davos, emphasizing that strong legal systems are essential for sustainable growth. Markets thrive on innovation, but they also depend on trust, predictability, and institutional integrity.
Alain Berset plans to address the economic risks that arise from weakening democratic standards. He argues that diminishing judicial independence directly undermines investor confidence. Legal certainty, he says, remains a cornerstone of long-term economic planning and stability.
Source: The Council of Europe
Erosion of Democracy Seen as a Risk to Global Investment
Berset will warn that disregard for democratic institutions damages more than political legitimacy—it destabilizes economies. When laws are inconsistently applied or selectively enforced, businesses face uncertainty and retreat from investment. Governance perceived as arbitrary or unstable weakens confidence across borders.
He stresses that unpredictable legal systems increase market risk internationally. Without credible mechanisms for contract enforcement, businesses hesitate to commit capital. Strong democratic norms, therefore, underpin healthier global investment climates.
Corruption and Weak Institutions Distort Fair Competition
According to Berset, corruption undermines both democracy and economic performance. When wrongdoing goes unpunished, public faith in institutions deteriorates. Markets lose stability when accountability and transparency are absent.
He notes that attacks on judicial independence distort competition by favoring entrenched interests over innovation. Unequal enforcement of the law discourages entrepreneurship and hinders sustainable growth. Fair competition, he argues, depends on robust and impartial institutions.
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Trust Recognized as a Vital Economic Resource
Berset draws a direct link between economic performance and trust in democratic systems. When institutions fail to uphold integrity, confidence in both government and markets declines. That erosion ultimately affects consumption, investment, and social cohesion.
He emphasizes that trust cannot exist without accountability. Fairness sustains the legitimacy of democratic systems, while reliable institutions ensure that markets function efficiently and equitably.
Council of Europe Promotes Democratic Safeguards
Through its New Democratic Pact for Europe, the Council of Europe works with governments to reinforce rule-based governance. The initiative supports judicial independence and institutional integrity, creating more competitive and predictable investment environments.
Berset will call on economic leaders to uphold these values. Businesses perform best when the law is clear and stable. Cooperation between public and private institutions, he argues, strengthens democracy and fosters prosperity.
Artificial Intelligence Governance Addressed at Davos
Berset will also discuss the challenges posed by artificial intelligence at the Davos forum. The Council of Europe recently adopted a Framework Convention on AI, which sets enforceable standards for transparency, accountability, and human oversight.
The convention aims to safeguard fundamental rights while promoting innovation. Legal clarity, Berset says, enables innovators to operate confidently across borders. When AI systems follow consistent rules, investors and societies benefit from greater trust and stability.
Davos Meetings Highlight Multilateral Engagement
During the forum, the Secretary General will participate in high-level panels and bilateral meetings with global leaders. These engagements reinforce the Council of Europe’s mission to advance democracy, human rights, and economic resilience.
The World Economic Forum in Davos remains a key venue for multilateral dialogue. Berset’s participation signals Europe’s commitment to prosperity rooted in the rule of law. Legal integrity, he concludes, is indispensable to navigating global uncertainty.
