Template-type: ReDif-Paper 1.0
Author-Name: Verspagen Bart 
Author-Name: Fagerberg J. 
Author-workplace-name: UNU-MERIT
Title: One Europe or several? Causes and consequences of the European stagnation
Abstract: The European economy is currently in a slump, the worst since the 1930s.  Although this is often seen as a consequence of the financial crisis  that hit the capitalist world in 2007-8, we argue that many of the  problems that Europe faces today have long-term roots to do with the  fact that Europe consists of countries with quite different dynamics and  capacities for adapting to changes in the global and European economic  environment. We start by comparing Europes growth performance to that  of other parts of the world, and then consider some popular but arguably  erroneous explanations of the present crisis. Subsequently, we delve  into the development of the external balances of various European  countries. This leads to the identification of three European  archetypes, characterized by different adaptability and performance,  i.e., the North, the South and the East. We explore the consequences of  globalization and European economic integration for the economic  performance of these different country groups. The effects have been  quite asymmetric; the Southern countries in particular have benefited  little if at all. Finally, we summarize the lessons from the analysis  and consider the implications for policy. What is needed is a European  growth policy, properly adapted to the different capacities across  Europe, that places the welfare of the European population as a whole at  the centre.    Keywords Euro crisis; economic growth; Europe
Keywords: International Agreements and Observance; International Organizations; Welfare and Poverty: Government Programs; Provision and Effects of Welfare Programs; Economywide Country Studies: Europe; 
Classification-JEL: O52; F53; I38; .
Series:  Working Papers
Creation-Date: 2014
Number: 025
File-URL: http://pub.maastrichtuniversity.nl/73f43292-eccf-4e37-bed4-15791b62baa2
File-Format: application/pdf
File-Size: 2279182
Handle: RePEc:unm:unumer:2014025