Europe’s Real Crisis
The Troika has “saved” Greece, but there is more to be done. People have shifted focus to Italy and Spain now. Yes, these economies are big, and the debt ratios (irrespective of what Spain tells us) out of control. What is there to be done, is it even possible getting that growth we need in order to achieve the growth rates necessary for the economy to prosper? Europe’s biggest problem going forward is the ever falling fertility rates, especially in the Med countries. Europe needs workers and higher worker productivity in order to fix this mess. From the Atlantic.
ALL OF US can breathe easy now: policy makers and analysts finally agree on how to fix Europe’s problems.
“Europe Debt Crisis Plan Hinges on Economic Growth,” declared the Los Angeles Times in October, after finance ministers announced what felt like the hundredth plan to seriously, no-foolin’-this-time, really rescue the European Union’s illiquid and insolvent states.
“Countries have to undergo significant structural reforms that would revamp growth,” said Mario Draghi, the head of the European Central Bank, in a December interview with the Financial Times.
“Austerity is not enough, even for budgetary discipline, if economic activity does not pick up a decent rate of growth,” Italian Prime Minister Mario Monti told The Economist in January.
Their words have been echoed in a thousand or more op-eds, policy briefs, and TV spots, for good reason. Growth could fix so many dire fiscal and political problems—not just in Europe, but all over the developed world.
If only economic growth could be delivered on demand, like a pizza, just minutes after we realize we want it. Unfortunately, growth (or at least the sustainable variety) is typically a long time in the baking, and dependent on two main ingredients: more workers and higher worker productivity. And much of Europe is short on the former. That has big implications for Europe’s future.
Full article on Europe’s biggest problem click here.