Lessons From Europe’s Long Recession

Five years after the onset of its worst recession, the European Union’s economic recovery remains painfully slow. Has anything been learned from this dismal performance about how governments can combat severe recessions? The answer is yes -- but sadly, the clearest lessons are the ones governments seem least likely to apply.

It would be hard to deny that Europe’s record has been awful. Over the past four years, gross domestic product in the euro area has grown by less than 3 percent; output fell slightly in 2012 and again this year. European unemployment still stands at more than 12 percent. The latest forecasts from the Organization for Economic Cooperation and Development predict growth of just 1 percent next year and 1.6 percent in 2015. It’s an outlook that makes the sluggish U.S. recovery look brisk.