Saturday, April 15, 2006

Europe Stalls on Road to Economic Change

That's the NYT headline. These quotes show that they understand the problem.

"Everybody in Europe agrees that things can't go on the way they are going," said Wolfgang Nowak, a German economist who is in charge of the Deutsche Bank's International Forum. He was speaking about the near-zero-growth economies with high deficits, rigid labor markets and intractable levels of unemployment and social welfare budgets that are increasingly difficult to afford.

"Everybody wants change," Mr. Nowak continued. "At the same time, everybody does everything so that things don't change."

"The political leaders of all these countries know what needs to be done, and it's not rocket science," Charles Grant, director of the Center for European Reform, in London, said in a telephone interview. "The Lisbon Agenda lays out objectives. But as Jean-Claude Juncker, prime minister of Luxembourg has said, everybody knows what reforms we need to implement but nobody knows how to implement them and win an election afterwards."

"The anti-liberal clerisy has basically won the intellectual argument in much of Europe," Mr. Grant said. "They've fostered the view that liberal economics leads to a kind of Dickensian vision of child labor and old women crying in the streets."

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