Europe's real problem: Lack of growth
By Fareed Zakaria, CNN
October 16th, 2011
02:50 PM ET
If the Greek crisis morphs into an Italian crisis - Italy being too large to bail out - the entire structure of post-World War II Europe could unravel.
Finally, European leaders seem to recognize that their strategy of kicking the can down the road has not worked.
The result will not be a dramatic solution - that is not how Europe works - but, more likely, a series of steps that together will be more comprehensive than anything done before.
But they will not address Europe's core problem: a lack of growth.
Italy's economy has not grown for an entire decade. No debt restructuring will work if it stays stagnant for another decade.
Even Germany is not immune, with an average growth rate of only 1.5%. That's not much of an engine for Europe.
The fact is that Western economies - with high wages, generous middle-class subsidies and complex regulations and taxes - have become sclerotic.
Now they face pressures from three fronts: demography (an aging population), technology (which has allowed companies to do much more with fewer people) and globalization (which has allowed manufacturing and services to locate across the world).
If Europe - and, for that matter, the United States - cannot adjust to this new landscape, it might escape this storm only to enter another.
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This is the result of 60 years of socialism.
Look, Europeans suffered a lot with the two world wars and embarked upon this programme of socialism to "relax" and "take it easy". Unfortunately it has spawned an entire generation where hard work and productivity is all but a foreign concept. Now they have to suffer the consequences. You cannot eat without WORK.
from UK to Greece, that entire continent is in the gutter.
still want to follow in Europe's socialist footsteps, USA?
By Fareed Zakaria, CNN
October 16th, 2011
02:50 PM ET
If the Greek crisis morphs into an Italian crisis - Italy being too large to bail out - the entire structure of post-World War II Europe could unravel.
Finally, European leaders seem to recognize that their strategy of kicking the can down the road has not worked.
The result will not be a dramatic solution - that is not how Europe works - but, more likely, a series of steps that together will be more comprehensive than anything done before.
But they will not address Europe's core problem: a lack of growth.
Italy's economy has not grown for an entire decade. No debt restructuring will work if it stays stagnant for another decade.
Even Germany is not immune, with an average growth rate of only 1.5%. That's not much of an engine for Europe.
The fact is that Western economies - with high wages, generous middle-class subsidies and complex regulations and taxes - have become sclerotic.
Now they face pressures from three fronts: demography (an aging population), technology (which has allowed companies to do much more with fewer people) and globalization (which has allowed manufacturing and services to locate across the world).
If Europe - and, for that matter, the United States - cannot adjust to this new landscape, it might escape this storm only to enter another.
------------------------------------------------------------------------------
This is the result of 60 years of socialism.
Look, Europeans suffered a lot with the two world wars and embarked upon this programme of socialism to "relax" and "take it easy". Unfortunately it has spawned an entire generation where hard work and productivity is all but a foreign concept. Now they have to suffer the consequences. You cannot eat without WORK.
from UK to Greece, that entire continent is in the gutter.
still want to follow in Europe's socialist footsteps, USA?
