Growth trends in Europe’s three largest economies should put all doubt to rest that eurosclerosis is back, says the Wall Street Journal. Gross domestic product (GDP) per capita in Germany, France and Italy is falling, relative to the United States, to levels below those recorded in the 1970s. And according to a study released yesterday by the Paris-based Organisation for Economic Co-operation and Development (OECD), European Union (EU) countries have made scant progress in adopting the policies necessary to boost growth.
Labour markets are an obvious culprit, says the Journal:
Moreover, the policy reforms under discussion in France and Germany are politically brave but economically insufficient, says the Journal:
Europeans don’t lack for good advice, as the OECD’s exposure of policy shortcomings shows. The problem is finding the political will to change. For Europe to keep its current living standards, much less improve them, this “’70s show” needs to be cancelled, says the Journal.
Source: Editorial, The European Disease, Wall Street Journal, February 8, 2006; and Going for Growth 2006: Economic Policy Reforms, Organization for Economic Cooperation and Development, February 7, 2006.
For text (subscription required): http://online.wsj.com/article/SB113936869263768032.html
For OECD report: http://www.oecd.org/document/21/0,2340,en_2649_201185_36060373_1_1_1_1,00.html
For more on International: http://www.ncpa.org/pi/internat/intdex1.html
FMF Policy Bulletin/ 14 February 2006
