NO SALLY RAND THEY:

Europe's Wishful Thinking: The European Union wants to have a bigger economy than America and their welfare state, too. (Irwin M. Stelzer, 01/27/2004, Weekly Standard)

IT IS FOUR YEARS since E.U. leaders met in Lisbon and set out a strategy for economic reform that they claimed would enable Europe to outstrip the United States as the world's leading economic power. Britain's Tony Blair liked the idea of reform, and France's Jacques Chirac liked the idea of besting the United States. So reform it was to be.

One need only dip into the new report to understand that the seeds of American entrepreneurialism cannot successfully be planted in the hostile soil that is today's Europe. The tools that the European Commission would use to catch up with America, and move European GDP up from its present 72 percent of the U.S. level, include such winners as passing a "Framework Directive on eco-design of energy-using products;" devising "social inclusion strategies" and establishing "National Action Plans (NAPs) . . . to set national targets" to improve social cohesion; and developing a "new industrial policy approach." There's more, lots more, including new regulations and taxes.

Meanwhile, back in America, President Bush is trying to reduce both the level of taxation and the burden of regulation. In short, the European Union aspires to American performance, and sees increased involvement of both Brussels' and member states' bureaucracies as the path to that goal, while U.S. policy is to reduce the role of government in business affairs.

The one concrete step they've taken, boosting their real interest rate to such an absurd level as to make the euro appear artificially competititive with the dollar, is killing them and was the result not of any economic policy but the need to seem a plausible world power even as they sat out the Iraq War. The Europeans just aren't a serious people anymore.

Posted by Orrin Judd at January 27, 2004 09:11 AM