The wrong solution to Europe’s economic slump
Lawrence Summers [“Europe’s growth challenge,” op-ed, April 30] argued that European economic growth can be ignited by promoting consumption via deficit spending. He acknowledged that it would be helpful to also “raise retirement ages, reform sclerosis-inducing regulations and restructure benefit programs” — but only when economic growth, fed by consumption, has begun.
The problem with this thinking is that it will not produce the changes many European countries need to make their economies competitive once again. Once deficit-induced growth begins, the pressure will be off, and no politician will be able to muster the votes needed for reform. The gravy train of government benefits, government jobs with great pensions and health-care benefits, and the regulations designed to protect firms and workers from competition will once again be the platforms for politicians.
Fortunately, there are a few European leaders who understand this. Let’s hope they persevere.
Frank A. Nicolai, Fort Washington