Declining Economic Dynamism in the Euro Zone…. A warning for the U.S.
Anthony B. Kim /
The eleven year old euro zone, the world’s second largest economy after the U.S., confronts a cold reality: its members lost economic vitality over the euro’s first decade, as shown in this WSJ chart. The WSJ reports:
[The] appetite for structural overhaul is low among Europeans, who have long believed that capitalism should be tempered by generous state benefits and strong labor protections. Even in the best of times, Europeans are loath to move toward a U.S.-style economic model, which they criticize for leaving citizens to sink or swim. In bad times, voters tend to demand economic security over change. French conservatives’ stinging defeat in regional elections over the weekend was a warning that many people voters have soured on President Nicolas Sarkozy’s bid to make France more business friendly and reduce some welfare benefits.
Whether in the euro zone or in the U.S., policy choices made now will shape the growth trajectory for years to come. Policy makers need to remind their publics of the key role economic freedom plays in enhancing competitiveness and prosperity. (more…)