Give Europe Credit For Being Anchored
A lot of articles are published these days on the failure of the European model of development ("Does Europe still have what it takes?" Books, Oct. 6). They remind me of Stalin's comments on the 1929 crisis--that it was the end of capitalism. Don't forget that the U.S. gross national product per head in 1960 was double Europe's, but the two figures are almost the same now. The present situation, which has existed since 1990, must not be allowed to wipe out the progress Europe made during the previous 30 years.
As the governor of the Banque de France stated recently, Europe was two years late on the economic cycle due to the cost of absorbing East Germany, which appears much greater than had been foreseen. In fact, much of what the anticommunist West's propaganda said about communism was true: Almost all the roads must be mended, houses painted, roofs repaired, and electricity upgraded. The same is true in industry.
The present high level of economic development in the U.S., compared with the high unemployment and troubled economy of Europe, is not proof that the American model is better. The gap is mostly the result of the huge costs associated with absorbing East Germany, which is foreign to the European model. What I fear now is that the main cost has not been totally absorbed and that we will remain in this stagnant situation for a long time. Let us hope that the recent economic improvement will continue and finally create the necessary employment.
Jean-Francois de Lauzun
I read with interest your review of Europe Adrift. Unfortunately, it seems to me that most of the American political columnists and some otherwise talented economics commentators have no great patience or sympathy for European affairs.
Europe Adrift seems to typify this rather new attitude toward Europe. Europe needs a common currency as the logical corollary for a single market. The reasons behind the European Monetary Union are historical rather than economic in nature: They go back, if you like, to Woodrow Wilson's recommendations after World War I. Following its two devastating wars, Europe has emerged as the continent of cooperation. It has less interest in global competition than most Americans assume. Most Europeans do care, however, about sound noninflationary growth and about unemployment.
Contrary to what some American observers think or wish, Europe is not about to become a federal state with its capital in Brussels. If anything, the region is about to forge a union that will have important implications for monetary policy, banking, and military and foreign affairs, but will otherwise leave untouched local customs and laws unrelated to trade. In short, if the French influence over European affairs diminishes somewhat, the future European Union will most likely be a confederation, rather that a federation, of independent states. With this arrangement, nationalistic and political tensions will in time lose their current intensity.
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.
- YouTube Bans Firearms Demo Videos, Entering the Gun Control Debate
- Stocks Drop Most in Six Weeks on Trade War Tension: Markets Wrap
- Under Fire and Losing Trust, Facebook Plays the Victim
- Fed Lifts Rates, Steepens Path Through 2020 for More Hikes
- Uber Autonomous Accident Video Shows Car Just Before Collision