In this article, the current situation in Europe is further examined and what is to come of their next summit on January 30th. The article discusses whether or not countries will be able to come to some sort of common ground over what should be done. While all the countries believe that growth is the answer, they all have different opinions over what is the best way to increase growth.
At the summit, the will be attempting to pass “fiscal compact” which would require all signatories to have a balanced budget. There is opposition to this, such as Mrs. Lagarde, and the opposition believes this “makes Keynesianism illegal” and what they need to do is ease monetary policy and countries that have surpluses should spend more.
Three more problems in Europe are the fact that they have so much public spending, their production is falling further behind the United States after almost catching up in the 1990’s, and it is hard to obtain patents. Since there is no patent that exists that covers you in multiple European countries, it is very difficult to get a patent. They are trying to fix this and make one that gives you protection in many countries now.
1 comment:
I do think that the issue with some European countries is their perspective with entitlements. In 4th quarter of 2010, France tried to increase the retirement age from 60 to 62. The French government understood that they were broke and during a depression austerity measures would need to be taken. Saving a little bit of money here and there. So what do the French do? They riot for weeks. I like how this article places a comparison on America's love of military spending, which is absurd, and Europe's love of social spending. I do not think that this is the only way to solve the debt problem. But there is no one place to solve the problem, so everyone should face cuts.
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