In Europe’s Choice: Growth or Safety Net Rupert Murdoch’s Wall Street Journal writes:
Its 16 member nations now face a stark choice. They can spur economic growth across the region by following through on long-overdue pledges to trim benefits and free up labor markets. Or, many economists say, they can face a decade of economic stagnation.
Countries across the zone lost dynamism during the common currency’s first decade, with annualized growth of 1.7% from 2000 to 2008, down from 2% growth in the 1990s. The next decade could be worse: Higher public debts and a surge of retirees will push up taxes and weigh on companies and consumers.
“The real question this crisis poses to all of us is: What will be the capacity of countries to accept true reform?” says former French finance minister Thierry Breton, who is now chairman and chief executive of information-technology services company Atos Origin SA.
Not surprising, but here you have it black on white. The goal is not the euro, or Greece. The goal is to do away with the social safety net. Especially pension obligation are seen as a drain on future ‘economic growth’:
Politicians across Europe say the cause of reform isn’t lost. Xavier Musca, deputy secretary general to Mr. Sarkozy, says that while France started late on the reform path, momentum has picked up again since 2007. “This administration [is] encouraging employees to work more and pushing for competition in the retail sector…We’re also going to speed up the pension reform.”
Ultimately, some governments will have no alternative. Germany recently passed a law guaranteeing the elderly that their pensions would never sink, a costly promise that economists say will haunt future workers and companies unless the pension system is fundamentally revised.
“We will have no choice but to undertake reforms,” says Michael Fuchs, a leading lawmaker in Ms. Merkel’s Christian Democratic Union.
They always say, ‘economic growth’ but what they really mean is ‘profits and bonuses’ for them.