No Going Back

Comment on Economist article (19 May, 2010) “No Going Back” 

I just hope this is not an exercise in throwing good money after bad. European Governments, and by extension the EU, have an appalling record in unravelling profligacy in their economic structures: the common agricultural policy; pension allowances way above the rest of the western world; ridiculous early retirement allowances; running up sovereign debt.

This has come to a head with the backlash in Germany when the German populace realised their government was about to prop up a state which allowed, no encouraged, its citizenry to retire at an age well before they themselves were allowed. This is just the tip of the iceberg in terms of profligate spending by western European governments, including Germany.

The reforms recently announced for Greece, and the additional monies, will go to waste unless all Western European Governments seriously tackle their fiscal deficits, as well as doing something about the fundamental structures of their economies.

The waste of the past is catching up to Western Europe, and unless these spending binges are seriously reined in (including the CAP), recovery will not only be a long way off, but will probably mean a permanent recession in Western Europe for the next ten years. If you don’t believe me, examine Japan in the 1990’s. The circumstances in Europe are almost identical.

I seriously doubt the political will is there, either at the national level (including UK), or at the European Union level.