Europe’s economy is so enfeebled by high taxes and restrictive regulations that it can’t pay for all the benefits promised by the social welfare state. The gap between promise and performance must widen and, in the process, spawn disillusion and discord, says Robert J. Samuelson.
What’s needed is faster growth in Europe, which would reduce joblessness and bolster global trade. One obvious step is to cut interest rates:
Thoughtful Europeans now recognise this:
Although these were remarkable political steps, they won’t single-handedly reinvigorate Europe’s largest economies or avert the long-term budget problem.
The predicament faced by Europeans one shared to some degree by all advanced nations, including the United States is this: Unless they take modestly unpopular steps today, they will be faced with hugely unpopular consequences tomorrow. But no one knows when tomorrow arrives and what those consequences will be. The temptation is to do nothing in the hope that nothing bad ever happens. The lesson of Europe’s wobbly economy suggests that bad things have already happened, says Samuelson.
Source: Robert J. Samuelson, The European Predicament, Washington Times, February 4, 2004.
For text http://www.washingtonpost.com/wp-dyn/articles/A10796-2004Feb3.html
For more on International (Taxes and Growth) http://www.ncpa.org/iss/int/
FMF Policy Bulletin/ 10 February 2004
