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    16 views3 pages

    Legrain European - Spring

    Uploaded by

    Heinz

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    © All Rights Reserved
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    6128/2016 Philippe Legrain: "The eurozone crsis has tipped many into disilusionment, despa and extremism - we need a European Spring’ | Europe Philippe Legrain: 'The eurozone crisis has tipped many into disillusionment, despair and extremism - we need a European Spring' @indopendent.co.ukinewsivordeuropelphiin .orain-the-eurozone-crisis-has-tipped-many-into-dsilusionmer spalr-and-extremism-we Philippe Legrain Like passengers on an up escalator, Britons and other Europeans for decades enjoyed seemingly effortless rises in living standards year after year. Expanding economies and swelling social spending lifted nearly everyone up. Each generation could look forward to much better lives than those of previous ones. Yet in recent years, this growth escalator has broken down, Ithhas been creaky for a while: since the tum of the century, productivity growth has been sluggish across most of Europe — and wage rises even slower. But piling on debt provided an artificial boost, while bubbly house prices and financial trickery blinded people to the risks. ‘Then the financial crisis and the panic in the eurozone threw a spanner in the works and the escalator went into reverse, ‘The long slump and governments’ subsequent budget cuts have exposed the chasm between the fortunate — and sometimes undeserving — few who continue to thrive and the majority who are struggling. Many people have fallen far — not least the 26 million Europeans who are out of work, many of them for a long time. In Britain, real wages have fallen by nearly a tenth. A typical British household is no richer than a decade ago. Even the much-vaunted German escalator has stalled. The average German ears fractionally less than 15 years ago, ‘Some parts of Europe have been in freefall, In Greece, where national income has shrunk by a quarter, children scavenge through rubbish bins for food scraps while hospitals run short of medicine. In Spain, where more than one in four people are unemployed, suicide is now the top cause of death after natural causes, In Ireland, where house prices have halved, nearly one in five homeowners are in arrears on the mortgages on their depreciated homes, while the cost to Irish people of balling out the banks that made all the bad mortgage loans comes to €14,000 (£11,600) each. In Italy, more than two in five young people are out of work; in Greece and Spain, it’s nearly three in five. ‘Across Europe, 15 million people below the age of 30 are neither in employment nor education. A lost generation is in the making. Is it any surprise that young Europeans are having even fewer babies since the crisis and that someone emigrates from Portugal every four minutes? Fortunately, prospects look less bleak than they were in 2012, when panic stalked the markets and the euro seemed on the brink of collapse. Finally, most European economies are growing again, while markets are buoyed by easy money But after the longest and deepest recession since the Great Depression of the 1930s, and even with exceptional monetary support, the recovery is the flimsiest on record. In Britain, the combination of austerity, easy money and a cheap currency without, ‘meaningful reform generated three years of stagnation — and now the authorities are cranking up yet another cycle of debt- fuelled consumption, housing bubble and bust. Far from a "march of the makers’, itis a flight of the speculators. Much of Europe remains lumbered with broken banks and crushing debts. Most of Europe suffers from record-low investment and feeble productivity growth, All of Europe is. ageing fast — and without immigration most countries’ workforces are set to shrink ‘The future seems bleak, too. Prominent economists talk of a “new normal” of permanently low growth, a "great stagnation" of innovation and even of the "end of growth" in the West altogether. (Others, on the contrary, think Innovation is speeding ahead, but fear that humans will lose the "race against the machine” and that robots will steal people's jobs.) There are certainly many worrying signs. Most of Europe has fallen further behind America’s productivity levels. Britain's productivity record aver the past decade is as poor as the eurozone’s. Germany has performed worse than Greece. Italy did worst of all: a big fat zero. Europe's productivity pipeline is blocked. Not enough new businesses are launched. Start-ups have trouble lifting off Growth in promising small companies often stalls. Established businesses don't innovate enough or invest enough in future growth, With a few notable exceptions such as Skype, Spotify and Shazam, the internet revolution has largely happened elsewhere. The new giants of our digital world — Google, Apple, Amazon, Facebook, Twitter, Linkedin, PayPal, eBay — are all American. There is no European equivalent of Silicon Valley. Europe isn't just falling further behind the US; it also faces ever-greater competition from China, India, Brazil, Mexico, hip swwain tremism.. 13 Jendent.co.ukinews/word/europa/ph lippe-lerain-he-eurozone-

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