A look at the Western debate about West’s problems reveals what the present writer regards in a large measure as an irritating superficiality. Nowhere is it better visible than in the mainstream discussions about the euro zone and its problems, where most debaters glide over the fundamentals of Europe’s long-term problems and concentrate on the superficial and short-term issues. The discussions on how to “save” the euro zone strangely forget the defects in its creation, glide over the lessons to be drawn from policies pursued during the past decade, and defend the virtue of maintaining its present membership. But the problems of Europe run much deeper than the survival or collapse of the monetary union. Even if we assume that the problems of confidence the member states have in each other’s behaviour are restored and the rest of the world regains confidence in the institutions of the monetary union, the fundamental problems will remain unsolved. A clue to the real long-term problems may be found in the answer to a rather simple question. It runs as follows: “Why is the large majority of European countries indebted to such an extent that any further increase in debt to GDP ratio generates panic reactions among potential lenders?”
Afonso, A. — Furceri, D. (2008): Government Size, Composition, Volatility and Economic Growth. European Central Bank, Working Paper, No. 849, January.
Alesina, A. — Ardagna, S. (2009): Large Changes in Fiscal Policy. NBER Working Paper, No. 15438 and In: Brown, J. R. (ed.) (2010): Tax Policy and the Economy. Vol. 24, pp. 35–68. The University of Chicago Press.
Bergh, A. — Henrekson, M. (2010): Government Size and Implications for Economic Growth. Washington, D.C.: The American Enterprise Institute (AEI) Press.
Henrekson M., '', in Government Size and Implications for Economic Growth, (2010) -.
Henrekson M.Government Size and Implications for Economic Growth2010)| false
Bergh, A. — Karlsson, M. (2010): Government Size and Growth: Accounting for Economic Freedom and Globalization. Public Choice, 142(1–2): 195–213.
Karlsson M., 'Government Size and Growth: Accounting for Economic Freedom and Globalization' (2010) 142Public Choice: 195-213.
Karlsson M.Government Size and Growth: Accounting for Economic Freedom and GlobalizationPublic Choice2010142195213)| false