This article from The Scotsman says the Euro-zone is in a spiral of self-destruction as its crisis-hit economy heads from bad to worse. It says Europe is on the brink of economic collapse. Symptoms of the problem are the flight of capital, the disastrous German economy, and the fact that for three years in succession the economies of the EU 15 have in aggregate outperformed the Euro 12.
Alleged reasons for the problems include collapsing confidence, tumbling stock markets, a sickly currency, pork-barrel spending, utterly inflexible central bank rules, over-regulated labour markets, a relentless rise in the government share of the economy, a growing tax burden, regulation out of every orifice and a desperate rearguard action against all and every attempt to dismantle state aid and subsidies.
The article blames a political elite that has wrapped itself in fantastical self-delusion about the superiority of its economic system. It says, “the same clique that greeted the bursting of America’s new economy bubble as proof of the flawed Anglo-Saxon model is the same one that, now their own economy has fallen into a far deeper slowdown than that in the US, turns to blaming US policymakers for not doing enough to pull the rest of the world including the EU out of the mire. To listen to Europe’s political elite is to hear the pathetic cry of the bankrupt that someone else spent all the money.”
This is remarkably harsh rhetoric. Are the economic problems really this severe? Are the causes identified in the article really the key problems?