The EU
Europe’s socialist economies continue to underperform, as they have done for decades:
Updated GDP figures for the euro zone came out last week, and growth in the first quarter was a disappointing 0.5%. Last month both the European Commission and the European Central Bank cut their annual growth forecasts for the euro zone to 1.6% from 2%, and that ugly word recession is in the air.The European Union’s much-ballyhooed “Lisbon Agenda”–which was supposed to revive growth in Europe–was really not an agenda for reform at all. It was, instead, simply a statement of nice things the EU would like to see happen to the European economy to help it compete with the U.S.–such as raising employment levels, increasing R&D spending, and so on.
Unfortunately, but not surprisingly, almost none of those things have happened, and halfway through the 10-year timetable of “Lisbon,” the European economy is in at least as bad a shape as it was when Lisbon was announced in 2000.
Given that Europe’s streak of economic underperformance can now be measured in decades, perhaps a better question to ask is: Why does anyone think that a system of generous welfare benefits, high taxes and harsh restrictions on hiring and firing would ever produce anything like a dynamic, growing economy? Why does anyone assume that there is such a thing as a “European model,” rather than just a collection of ill-conceived policies having a predictably depressing effect on the economy and job creation?
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