Skip to comments.EU trails US in growth
Posted on 01/15/2003 6:35:26 AM PST by Jimmyclyde
Red tape and low funding 'has Europe trailing US' By Ambrose Evans-Pritchard in Brussels (Filed: 15/01/2003)
The European Union economy is slipping further behind the US each year because of red tape, low levels of investment and the failure to deliver on the free-market reforms agreed in Lisbon three years ago.
In its annual Spring Report, Brussels said productivity had declined from 86pc to 83pc of the US level since 1999, and warned that stubborn inflation of 2.5pc was a sign that the EU's growth speed limit is still low.
Accusing the EU member states of "policy inertia and backtracking", it said Europe would remain "an area of unfulfilled promise" until governments encouraged research, investment and business creation.
"There is a lack of progress and urgency at a national level in many of the most important areas."
There are huge differences in performance. The northern ring of Finland, Sweden, Denmark and Holland are pulling ahead on almost every score after taking tough decisions on reform. But Italy, France, Germany seem incapable of overcoming political paralysis.
In its 180-page report, the EC said Europe had not begun to close the gap in "frontier technologies" such as biotech and computer software.
It said the EU had just five researchers per 1,000 workers, against eight in the US and nine in Japan. Spending on R&D had been stuck at 1.9pc of GDP for the past decade, barely more than half US levels.
The Commission said the EU would miss its target for 67pc of the working age population to have jobs by 2005, or for half of older workers to be employed by the end of the decade.
The failure leaves the EU dangerously exposed to its demographic time-bomb. The report said that state pension costs would rise by 3pc-5pc of GDP for most states within a generation, reaching 7.9pc in Spain and 12.2pc in Greece. Britain is the only major state where pension costs may fall.
Philip Bushill-Matthews, MEP, the Tory employment spokesman, said it took some cheek for the Commission to blame the member states when its own bureaucracy was the origin of many of the new laws that are strangling businesses in Britain.
"This is the pot calling the kettle black. Until Brussels itself stops producing such detailed, intrusive, one-size-fits-all legislation, Europe is doomed to fall ever further behind," he said.
Wow, now there's a shocker!
They have over 33% unemployment??!! They might as well give up now.
Wednesday, January 15, 2003
1 US Dollar = 0.94787 Euro
1 Euro (EUR) = 1.05500 US Dollar (USD)
Ie: the Euro is trading higher than the US dollar is at the moment.
Granted, a currency's exchange isn't that telling an economic indicator, but I do seem to remember predictions from about two years back about how the euro was doomed to failure.
This little Freudian slip shows just how deep the socialist conditioning really is. These people are writing a report criticizing bureaucracy and STILL think that governments are capable of creating prosperity. It's government heal thyself.
It won't happen. If they want the cure for state bureaucracy, it's for sale, cheap.
I just finished a trip to Austria (an EU member) and a side trip to Prague ( a soon to be member, not yet on the Euro). In talking with the locals in both countries, I was more than a little interested in the EUs effects on the people of both countries. Here are some of my observations and conclusions:
The Euro is facillitating travel within the member countries in ways that were probably foreseen, and this is no small thing. Italians were EVERYWHERE.
The street value of the dollar was at least ten percent more than its value in the licensed venues. This I had never encountered in my previous trips to Vienna. EU monkey business? I think so. Most of my Austrian friends had gotten over the initial run up of prices, which have now settled down somewhat.
Prague of course, is fairly new to capitalism, and there are upsides and downsides to this. The cabbie at the train station charged us three times the going rate to take us to the hotel. We didn't know until we took a cab back to the same train station. The Euro seemed to me to be more welcome than the dollar. Unprecedented.
In Germany and Austria we encountered a lot of anti-American graffitti on the walls, in the bathrooms (Bush is Hitler) but absolutely no animosity from the people. Very nice to us, and it didn't change once we were identified as American. In Prague, however, I felt an even greater comfort level. They actually LIKE us, I only got to talk to a few waiters in restaurants, one of whom told me he hoped we would kick Saddams ass!
Anyway, hope these observations are interesting to freepers.
It's a little difficult not to do so when what you're trying to do is to conflate 15 economies of differing performance into one. Germany found this out when it absorbed its Eastern half into a common economy with a common currency. Citizens used to a certain level of surplus utilization on their behalf - social programs - must "sacrifice" these in favor of capital investment in the areas of lower productivity, and hope that the return in time will result in a recovery of the social spending to which they've become accustomed. This was not an entirely happy process, nor is it complete.
Multiply that by 15 and you have a big project. The U.S. has, in fact, 50 separate state economies coexisting with an overall national one, within which differences between the state economies are subject to adjustment by federal subsidy (which is what Brussels is trying) but also by movement of both population and business from one location to another. There are also differing levels of social spending from one state to another. If this is the model the EU will follow then Brussels is going to have to allow for some local autonomy; if not, then the EU is likely to experience either the disadvantages of a command economy or dislocations of both industry and population. But there is, I think, more resistance to Spanish workers taking jobs in Copenhagen than there is to Oklahomans migrating to Silicon Valley. And there is also a larger disparity in both productivity and social services between Southern and Northern Europe than there is, say, between South and North U.S.
It's the old choice in economics - try to force it or just let things shake out on their own. My sense is that Brussels will be compelled to try and force it, both through personal inclinations of professional bureaucrats and through overly high expectations of the advantages of a common economy. I wish them luck.
Short people got
No reason to live...
My sentiments exactly. The euro is headed for a big fall and they KNOW it! Maybe some of their opposition to the elimination of soddom is based on that as well.
...and water is wet.
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