A service of the

Special Issue

New Growth for Europe

Growth can be achieved in many different ways, and the diversity in content and approaches within the articles in this Special Issue are testament to that. What they emphasise above all else, however, is that while growth is necessary, the traditional definitions of economic growth are not suitable for the EU in its current state and going forward. What are needed are sustainable, social and inclusive paths toward new forms of growth in Europe.

Figure of the Month

Growth rate in cumulative output per person employed

Growth rate in cumulative output per person employed

In constant prices, relative to base year (1990)

This figure from “Structural Reforms as a Panacea? The European Productivity and Growth Puzzle” by Daniel Gros shows the effect of various structural reform regimes on growth in the Eurozone over the past 25 years.

New Growth for Europe

After the Brits Have Gone and the Trumpets Have Sounded

Brexit presents new options and chances to re-think the concept of Europe as well as its approach to growth. Mark Blyth argues that the political disaster of Brexit is closely related to the inability of the EU to develop an agenda for future growth that has something to offer to the working classes, who currently find their cause more resolutely defended by the populist right. The political problem supposedly revealed by Brexit is actually an economic one. The EU needs new rules that allow national governments to do for recovery what they deem necessary, even if this contravenes the rules set by an austerity-preaching Commission.

New Growth for Europe

Structural Reforms as a Panacea?

Daniel Gros calls for a more active policy towards improving productivity, as neither cheap money nor structural reforms have shown the desired effects thus far. Not surprisingly, Gros points at a lack of investment as one of the main causes for low growth. Citing a list of growth initiatives launched in the last two decades, he argues that although impressive progress has been made with regard to structural reform, very little of this has turned up in the growth and productivity figures. Gros concludes that more investigation into the causes of the current stagnation is needed before policymakers call for more structural reforms.

Quote of the Month

Public Investment for Europe

“For the first time, there is a modest investment plan driven by public policy that expands demand and tries to fill – to a very limited extent – the gap left by the collapse of private investment since the 2008 crisis. For the first time, there is an EU policy action that recognises that markets cannot be considered perfectly capable of identifying appropriate investment opportunities.”

from Mario Pianta's article "Why Europe Needs a Public Investment Plan"

From the Archives

A Modest Proposal for Resolving the Eurozone Crisis

Before his controversial six-month stint as Greece's Finance Minister, Yanis Varoufakis detailed in Intereconomics his proposal for overcoming the eurocrisis. He argued that his policies could be implemented immediately and require none of the moves such as national guarantees or fiscal transfers to which many Europeans are opposed, nor moves towards federation that entail Treaty changes, which electorates are most likely to reject. He juxtaposed his proposal with "the false dilemmas that currently impede clear thinking and immobilise Europe's policymakers".