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Sunday, March 13, 2005

EU: Dazed & Confused

h/t InstaPundit

Tim Blair links to this interesting article which essentially says that the EU economy is 20 years behind the US economy.

EU economy 'at least 20 years' behind US
11.03.2005 - 17:43 CET | By Richard Carter

EUOBSERVER / BRUSSELS - The US economy is 20 years ahead of that of the EU and it will take decades for Europe to catch up, according to an explosive new study published on Friday (11 March).

The survey, unveiled by pan-EU small business organisation Eurochambres, is intended as a sharp "wake-up call" for EU leaders as they gather on 22 March for a summit on how to boost growth and jobs in the EU economy.

The EU's current performance in terms of employment was achieved in the US in 1978 and it will take until 2023 for Europe to catch up, the report shows.

The situation is scarcely better when it comes to income per person. The US attained the current EU performance in 1985 and Europe is expected to close the gap in 2072.

But the bleakest picture comes when comparing the two economic blocs in terms of research and development. Europe is expected to catch up with the US in 2123 and then only if the EU outstrips America by 0.5 percent per year in terms of R&D investment.

Presenting the survey, Arnaldo Abruzzi, the Secretary-General of Eurochambres, said, "the current EU levels in GDP, R&D investment, productivity and employment were already reached by the US in the late 70s/early 80s".

"Even the most optimistic assumptions show it will take the EU decades to catch up and then only if there is considerable EU improvement", he concluded.

Furthermore, the survey points out that enlargement will make the EU's mountain even harder to climb.

"Data clearly suggest that including the 10 new member countries in the comparison would further deteriorate Europe's position compared to the US for all four major indicators", says the report.

[...]

Eurochambres called for EU leaders to focus on concrete actions to revive the EU's economy and for a communications strategy to lay out the economic challenges facing the EU.

The group represents 18 million enterprises across Europe.
Now, I'd have to say that that this isn't surprising. First, note that this doesn't include some of the newer former eastern bloc countries that are probably stuck in the '50s. However, I remember living on the German/French border in 1996 and being PISSED that I couldn't get groceries in Germany after 6pm on a weekday or after 2pm on Saturday. A 30 minute bus ride to the French border town was helpful, because they had longer hours (not 24-hours a day, but longer hours on each day). All I'm saying is that the marketing strategies and view of customer service as a means to increase revenues/profits isn't as far along as it is in the US - it was definitely in the 70s when I was there and doesn't appear to have moved forward.

This is not surprising when both the workers and the governments distrust private enterprise. They really are a paradox... They have one foot in the 21st century (marveling at high-tech gadgets, telecomm, etc) and one foot in the 19th century (viewing successful entreprenuers as robber barons) and something else stuck in the 22nd century (with their permissive views of social issues (ie sex, drugs)).

It's encouraging to see that the business community is pushing for reform - although I wouldn't expect much improvement. I believe that Europe could make quick gains in this regard, given that the structures and components of a modern economy are known entities - because they're here in the US. However, their kneejerk anti-Americanism will probably inhibit any rapid movement in our direction. It's also important to note that most European entreprenuers end up coming to the US to start a new enterprise, so Europe is losing its best and brightest (and most aggressive) businesspeople to the New World.

Also, I'm interested to know whether Britain was included, as their economy is probably stronger than any of the continental economies. Simce they haven't signed on to the Euro, I wonder if they were included...

Your Co-Conspirator,
ARC: St Wendeler