EU and the US Model

PUNDITS in the United States have been scurrying for weeks trying to put their fingers on just why the American public is in such a sour mood as the country approaches midterm elections Nov. 8.

Unemployment is down, nearing what economists consider to be full employment, and new jobs are being created by the millions. Getting government out of people's - and businesses way is the order of the day.

One theory, a partial answer, is that Americans fear not for the present, but for the future. They're working now, but at any time their employer could be sold, go bankrupt, or ``downsize.'' They could be suddenly without health-care benefits, perhaps untrained for another good job.

The abrasive nature of rough-and-tumble American capitalism may be why many Europeans, too, seem more frightened than impressed by the vigorous US economy. Though the average European is considerably less wealthy than his American counterpart, he sees this more than made up for in much lower rates of violent crime and strong government-paid unemployment and welfare benefits, including health care.

The trouble is, the bill is coming due on this European model, with its heavy social spending. European nations are graying at a rate faster than in the US. Who will be the workers of the future who will pay the taxes to fund these generous social benefits?

This is just one of the issues facing European nations of as they marked one year into the Treaty on European Union, popularly known as the Maastricht treaty, Nov. 1. The EU has an immense economic agenda, all of which it is trying to accomplish while adding members. Six Eastern European countries - Poland, Hungary, Romania, Bulgaria, the Czech Republic, and Slovakia - eagerly want in, and made progress toward their goal at an EU meeting Oct. 31. But they are far from economically healthy; they will not be easily absorbed.

The EU is lampooned in some quarters for its Byzantine regulations and for its bevy of Brussels bureaucrats. Ironically, it all is meant to facilitate the smooth flow of people, goods, services, and information among member countries.

With communism discredited, will the new choice of economic models be between Europe's ``kinder, gentler,'' government-directed capitalism and the uncertain, but vital, capitalism of 1990s America? Each way offers promise - and pitfalls.