Europe’s lapse of rea­son

Financial Mirror (Cyprus) - - FRONT PAGE -

At long last, the United States is show­ing signs of re­cov­ery from the cri­sis that erupted at the end of Pres­i­dent George W. Bush’s ad­min­is­tra­tion, when the near-im­plo­sion of its fi­nan­cial sys­tem sent shock waves around the world. But it is not a strong re­cov­ery; at best, the gap be­tween where the econ­omy would have been and where it is to­day is not widen­ing. If it is clos­ing, it is do­ing so very slowly; the dam­age wrought by the cri­sis ap­pears to be long term.

Then again, it could be worse. Across the At­lantic, there are few signs of even a mod­est US-style re­cov­ery: The gap be­tween where Europe is and where it would have been in the ab­sence of the cri­sis con­tin­ues to grow. In most Euro­pean Union coun­tries, per capita GDP is less than it was be­fore the cri­sis. A lost half-decade is quickly turn­ing into a whole one. Be­hind the cold statis­tics, lives are be­ing ru­ined, dreams are be­ing dashed, and fam­i­lies are fall­ing apart (or not be­ing formed) as stag­na­tion – de­pres­sion in some places – runs on year after year.

The EU has highly tal­ented, highly ed­u­cated peo­ple. Its mem­ber coun­tries have strong le­gal frame­works and well-func­tion­ing so­ci­eties. Be­fore the cri­sis, most even had well­func­tion­ing economies. In some places, pro­duc­tiv­ity per hour – or the rate of its growth – was among the high­est in the world.But Europe is not a vic­tim. Yes, Amer­ica mis­man­aged its econ­omy; but, no, the US did not some­how man­age to im­pose the brunt of the global fall­out on Europe. The EU’s malaise is self-in­flicted, owing to an un­prece­dented suc­ces­sion of bad eco­nomic de­ci­sions, be­gin­ning with the cre­ation of the euro. Though in­tended to unite Europe, in the end the euro has di­vided it; and, in the ab­sence of

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