July 13, 2005

DEPENDS:

Chorus grows to get Europe competitive (James Kanter, JULY 13, 2005, International Herald Tribune)

Calls for an overhaul of the European social welfare model gathered force Tuesday as Chancellor of the Exchequer Gordon Brown of Britain put a push for freer markets at the center of his economic agenda for the European Union, and the Organization for Economic Cooperation and Development warned of waning growth if countries shied away from enhancing competition.

Europe risks decades of anemic growth unless governments in countries like France and Italy open their economies to greater competition and shake up their labor markets, the OECD said Tuesday.

Failure by European governments to take tougher measures, the agency said, like making it easier for businesses to hire and fire employees, could mean annual growth of 1.3 percent between 2010 and 2020 and 0.9 percent between 2020 and 2030, compared with average rates of about 2 percent during the late 1990s.

They're dreaming. There is zero likelihood that Europe's economy will be growing by the 2020's as demographic realities take hold. Consider only this: by 2050, if you project forward, there will be just 3/4 of a worker for each person dependent on government for their livelihood in Europe. The most obvious problem with such a projection is, what kind of idiot would be one of those workers?

Posted by Orrin Judd at July 13, 2005 9:19 AM
Comments

Bob Dole joke reference, OJ?

In 1996 I spoke with the man who led one of the five largest privately held businesses in Italy. He told me he would never make another hire in Italy, because, as he put it, "I'm already married."

Posted by: Brian (MN) at July 13, 2005 9:30 AM

In addition to the smart Euro abandoning the sinking ship, there is another wild card. US firms now have, and will face even greater difficulty in the years ahead, a problem finding highly capable workers. It is possible that one solution will be to actively recruit such people in Europe. If this path is taken, the timetable for European implosion gets moved up.

Posted by: Luciferous at July 13, 2005 2:23 PM

"... could mean annual growth of 1.3 percent between 2010 and 2020 and 0.9 percent between 2020 and 2030."
What makes these people think they can make economic projections 25 years into the future?

Posted by: jd watson at July 13, 2005 2:51 PM

Like anything in unstable equilibrium, all it will take is one nudge past the tipping point. And the whole thing will come crashing down real fast.

Posted by: ray at July 13, 2005 9:47 PM

Like anything in unstable equilibrium, all it will take is one nudge past the tipping point. And the whole thing will come crashing down real fast.

Sounds like the real estate markets in San Diego, LA, Vegas, and Hanover, NH.

Posted by: Michael Herdegen at July 14, 2005 2:32 AM

Europe isn't at equilibrium and those cities aren't unstable.

Posted by: oj at July 14, 2005 7:12 AM

Luciferous,

You are of course correct.

But try convincing the INS about that. If you are a Muslim, they will let you in on a red carpet and if you don't have an explosive device, they will happily provide you one at taxpayers' expense. If you are a nice Jewish electrical engineer from Slovakia who falls in love with a nice math professor from Iowa, as happened to a friend of mine, the same INS treats you like you are a baby-eating cannibal.

Posted by: bart at July 14, 2005 8:28 AM
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