A Five-Step Plan for European Prosperity

The challenges Europe is facing go well beyond the risk of a Greek exit from the euro. Overcoming the continent's economic stagnation and the fiscal pressures of bloated welfare states will require bold measures to restore growth, opportunity, prosperity, and financial stability.

WASHINGTON, DC – Though the Greek crisis has been placed on pause, the economic situation in Europe remains bleak. Eurozone growth is up slightly from its near-recession levels of a few months ago, but projections by the International Monetary Fund for 2015 and 2016 barely exceed 1%. Unemployment remains above 11% – and twice that among the young (and doubled again in countries like Greece and Spain).

Greece's exit from the eurozone would likely be less disruptive now than it would have been a few years ago. The countries most at risk of contagion – Portugal, Spain, and Italy – are less vulnerable now in the eyes of the markets; the European Union has established a bailout fund; and the European Central Bank has launched a large bond-buying program.

The real challenge in Europe is continued stagnation and rising public-sector fiscal pressures in bloated welfare states with rapidly aging populations. Restoring growth, opportunity, prosperity, and financial stability will require bold solutions to five inter-related problems.

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