Can Europe Grow?

PARIS: The 1990s have been Europe’s Janus decade. Having dispatched communism, much of the Europe that rests east of the Elbe faces strong growth and a brighter future. Europe’s western half, however, is facing darkness. Economic growth is at its lowest since World War II, averaging a scant 1.3% since the decade began. Prolonged slump imposes not only mass unemployment, but stagnant wages, increased poverty, and rising inequality. Europe’s bright hopes for the future have dimmed.

Aggravating the Continent’s defeatist outlook is a realization that the proposed cures seem as bad as the disease. All imply that Europe can no longer build on the legacy of its glorious postwar decades, that time when its peoples secured both economic growth and high social equality. Today, Europe is told it must choose between one or the other. The path to the future, it is said, starts by marching backwards.

Europe’s future, however, may not be as dark as is feared. Achieving growth rates equal to those of the postwar decades may be unrealistic, but resigning oneself to a sterile status quo is an unnecessary surrender. It is also dangerous to social cohesion and democracy. To really cure Europe’s ills, policies must attack the source of infection: the dominance that lenders now hold over borrowers in financial markets.

To continue reading, please log in or enter your email address.

To access our archive, please log in or register now and read two articles from our archive every month for free. For unlimited access to our archive, as well as to the unrivaled analysis of PS On Point, subscribe now.


By proceeding, you agree to our Terms of Service and Privacy Policy, which describes the personal data we collect and how we use it.

Log in;

Cookies and Privacy

We use cookies to improve your experience on our website. To find out more, read our updated cookie policy and privacy policy.