Failure to recognize Europe's problem

If the first stage of crisis resolution is recognition of the problem, one has to be disappointed by Olli Rehn's assessment of the European sovereign debt crisis (Comment, December 11). For, despite the European Central Bank's recent substantial downgrade of its European economic growth forecast, Mr. Rehn fails to recognise that at the core of the European debt crisis is a deepening in its periphery's economic recession. That deepening is substantially undermining efforts by the countries in the periphery to stabilise their public finances as is reflected in the persistence of stubbornly high budget deficits and in rising public debt to gross domestic product ratios.

Failing to recognise Europe's economic growth problem, Mr. Rehn exhorts countries in the European periphery to persist with very much the same recipe of fiscal austerity and structural reform that they have applied to date. At the very least, Mr. Rehn would seem to owe us an explanation as to why this time around that policy mix will produce economic growth when it has so singularly failed to produce economic growth so far.


 

Also Visit
AEIdeas Blog The American Magazine
About the Author

 

Desmond
Lachman

What's new on AEI

Making Ryan's tax plan smarter
image The teacher evaluation confronts the future
image How to reform the US immigration system
image Inversion hysteria
AEI on Facebook
Events Calendar
  • 01
    MON
  • 02
    TUE
  • 03
    WED
  • 04
    THU
  • 05
    FRI
Wednesday, September 03, 2014 | 9:00 a.m. – 10:30 a.m.
From anarchy to Augustus: Lessons on dealing with disorder, from Rome’s first emperor

We invite you to join us for two panel discussions on how Augustus created order from chaos 2,000 years ago, and what makes for durable domestic and international political systems in the 21st century.

Wednesday, September 03, 2014 | 12:00 p.m. – 1:30 p.m.
Multiple choice: Expanding opportunity through innovation in K–12 education

Please join us for a book launch event and panel discussion about how a marketplace of education options can help today's students succeed in tomorrow's economy. Attendees will receive a complimentary copy of the featured book.

Thursday, September 04, 2014 | 12:00 p.m. – 1:30 p.m.
How conservatives can save the safety net

Please join us for a luncheon event in which our panel will discuss what conservatives can learn from how liberals talk and think about the safety net and where free-market economics, federalism, and social responsibility intersect to lift people out of poverty.

No events scheduled this day.
No events scheduled this day.
No events scheduled today.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.