Why has European growth been so weak for so long?
Excessive government spending is the main culprit, but there are other factors at play in the region's economic stagnation
In this file photo, flames from a fire set alight in a container by activists of the Frankfurt Occupy movement are seen in front of the European Central Bank and a sculpture of the euro symbol in Frankfurt, Germany. Demographics and excessive government spending are to blame for the economic stagnation of some European nations, Karlsson argues.
Michael Probst/AP/File
Interesting Wall Street Journal editorial which discusses why European growth has been weak for so long-namely demographics and excessive government spending. The article mentions Germany and Sweden as two countries that are "better run", which is basically true, but the point that could have been added was that their better relative performance is mostly because they have implemented tax- and social benefits cuts.
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Germany by the way is an example of how countries in the short run can compensate for the effects of a shrinking working age population by employing a higher percentage of the people in that age group. They still have room to increase the employment rate for a few more years but with a 5.5% unemployment rate there is a limit to that. Perhaps Germany should encourage some of those newly unemployed Southern Europeans to learn German and move to Germany?
The Christian Science Monitor has assembled a diverse group of the best economy-related bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers' own, as is responsibility for the content of their blogs. To contact us about a blogger, click here. This post originally ran on stefanmikarlsson.blogspot.com.
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