After the conclusion to what some pundits called a ‘tumultuous week’ for Europe (week ending 11 May 2012), we still find ourselves asking some important questions.
We all know that the question is not around what growth, where growth or why growth. The fundamental question in Europe now is:
For way too long Europe and its leadership had taken its eye off the growth ball. They had taken their eye off that ball focussing instead on creating the conditions for a ‘stable’ internal market, forgetting that it was all actually centred on competitiveness and growth creation!
Too much needless bureaucratically driven regulation, not creating the sustainable conditions for growth, but rather the spiral into debt driven oblivion…and therefore leading to the volatility and the instability we currently experience!
So the choice now comes down to how do we drive growth, in the face of an electorate that favours public sector driven growth, rather than private sector led growth.
It must make common (or at the very least common enough) sense for private sector growth incentives being created, rather than debt fuelled public sector or even Keynesian focused supply side stimulus. But no, the discourse in Europe has not been around stimulating demand by creating the conditions for competitive led export fuelled growth! Instead, the in-fighting and constant politicking around balanced budgets and debt to GDP ratio targets and endless pacts to patch the patient with half-baked policy sticky plasters has contributed to exactly the opposite outcome the leadership tried to create in Europe, namely a stable platform for internal market competitiveness. They forgot about the world changing outside the ‘Chinese wall’ of an expanded 27 member union.
And now the electorate has firmly rejected the austerity programmes, in both Greece and France, because they have not been educated in the dangers of public sector excesses. Nobody in Europe (except for maybe Sweden) realised that giving the “Engine of Growth”, namely enterprise and entrepreneurs an incentive to create businesses and employment opportunities, is actually tax reductions and not increases, combined with tempering public sector growth and reducing labour market inflexibility. Most European countries have youth unemployment; the hungry, tech-savvy and street smart under 25’s, running in double digits, of anywhere between 15 – 50%, depending on which country or statistics you want to believe…
We beg you Europe
For the sake of yourselves and the rest of the world, we beg you Europe (and off course we mean the leaders of Europe) to think about the following key growth criteria, as part of any ‘Growth Pact’ you might negotiate in the coming months:
- Reduce the size of your bloated public sectors
- Introduce private property ownership incentives and pension reforms
- Lower your punitive tax rates
- Reform your burdensome and needless regulation, opting for streamlined market driven regulatory stabilisers
- Introduce labour market reforms and encourage flexibility and mobility
- Encourage and actually treat your citizens like the responsible ‘conduits of growth’ and employment creators they are and can be
- Encourage personal and community based accountability
- Be tough on crime, but fair on punishment and reform
And above all believe, think, do, act and (if you must) enact economic GROWTH!
- Public sector protests – in pictures (icrindia.wordpress.com)
- Q&A: End of austerity? (bbc.co.uk)
- Given the unrelenting stream of negative domestic economic news and the crisis of confidence in Europe, it is reasonable to ask where UK growth is going to come from in the coming years. (lloydsbankwholesale.com)
- The Left’s anti-austerity message is delusional (telegraph.co.uk)
- Europe’s delusional search for growth (telegraph.co.uk)
- Is this the end of ‘1 Europe’? (wnd.com)
- Is This the End of ‘One Europe’? (lewrockwell.com)
- Europe’s Voters Say “No” to Economic Reality (whiskeyandgunpowder.com)
- Draghi’s “growth pact” = Internal devaluation (superbullinvestor.com)
- Is This the End of “One Europe”? (theamericanconservative.com)
- The Insanity of Austerity (counterpunch.org)