Bringing Europe back from the abyss
By Victoria Bateman
In the Eurozone, unemployment stands at 11%, with youth unemployment more than double that at over 22%, whilst labour productivity growth is virtually zero and government debt is over 90% of GDP. Victoria Bateman at CapX warns that talk of "structural reform" and "fiscal union" (the twin magic bullets that have been suggested for years) won't cut it. If Europe is to dig itself out of the mess, it is time to think big.
- Bringing Europe back from the abyss
- Europe has spent many years giving lip service to 'structural reform' - it is a fantasy
- If Europe is to dig itself out of the mess, it is time to think big
Never mind renegotiation. If Europe wants Britain to stay on board, it needs to sort out its economy.
The challenges Europe faces are immense. In the Eurozone, unemployment stands at 11%, with youth unemployment more than double that at over 22%, whilst labour productivity growth is virtually zero and government debt is over 90% of GDP. When it comes to economic growth, last year’s Eurozone growth performance (at around 1%) would look limp for a normal year, not to mention one in which the economy still has the opportunity to make up for lost ground following a major recession. At the moment, Europe hardly looks to be in good health, and, quite simply, an unhealthy Europe is not an attractive Europe. Demand-side stimuli, such as the interventions of the ECB, even if helpful in the short term, will not tackle the deep underlying problems, whilst the focus on government debt has for too long diverted attention away from dealing with these bigger issues. Whether we are talking about the European Union or the Eurozone, if the continent is to stay united, it needs to sort out its economy. A poor economy is a divisive economy. It is time for European leaders to move beyond simply dealing with short-term problems. It is time for Europe to do more to encourage long-term growth and prosperity.
- The usual advice: structural reform and fiscal union...
- Structural reform is not enough...
- The elephant in the room for the Eurozone....