Europe's Short-Term Economic Fixes Can't Solve Long-Term Problems

 

Europe's Short-Term Economic Fixes Can't Solve Long-Term Problems I fy o uwantt of eel g oodab outt heAmer i c ane conomyj us tl ookt o Eur op e.Ec o no mi mi cgr o wt ht h er ei ss l o w,un emp l o y men me ti shi g h.An dn ew dat at hi sweeks ugges t st hecont i nentmay beaboutt oent eri t st hi r d r ec es s i oni ns i xy ear s .NPR' sAr i Shapi r or epor t sf r om Londononwhat ' s goi ngwr ongandwhy . ARISHAPI RO,BYL I NE:Y ouc ou l ds a yEu r o pe ' sr e c o v e r yf r o mt h e 2008fi nanc i al c ol l aps eh asb eenune v en.Ory o uc oul ds ayt her e' s nev err eal l ybeenar ec ov er y . That ' st hev i ewofJ onat hanPor t es .Hedi r ec t st heNat i onal I ns t i t ut ef or Ec o n omi ca n dSo c i a lRe s e ar c hi nLo nd on . J ONATHANPORTES:It h i n kd es c r i b i n gi ta sar ec o v er yi sac t u al l y wr ong.Whatwe' r eseei ngno wi st hatt hatpr ol ongedper i odof s t agnat i ons eems ,i fan yt hi ng,t obeget t i ngs omewhatwor s ewi t h Ger man ynows howi ngs i gnsoff al l i ngbac ki nt o-pos s i bl yi nt o r ec es s i on. SHAPI RO:Ger man yi sk eyt ot hi sequat i on.Fort hel as ts ev e r al y e ar s , Ge r man yha sb ee nEu r o pe ' ss t r ai g ht As t ud en t .Wh i l eu ne mpl mp o y me me nti n Spa i ni s2 5p er c en t ,Ge r ma nu ne mp mp l o y me me nti so nl y5pe r c e nt .No w, Ger man y' sgr adesar es l i ppi ng.Fer di nandFi c ht neri sheadof f or ec as t i ngandec onomi cpol i c yatt het hi nkt ankDI W Ber l i n. FERDI NANDFI CHTNER:We' v eseenor der sdr oppi ng.We' v eseen pr oduc t i ondr oppi ngi nAugus t .Andi npar t i c ul ar ,buti t ' spr obabl yt he mos ti mpor t antt hi ngwhi c hi sma mak i ngpeopl ener v ousr i ghtnow,i st hat s ent i menti ndi c at or shav edec l i ned. SHAPI RO:Sent i menti ndi c at or s-t hat ' sbas i c al l yameas ur eoft he mo odi nt h eb us i n es sc ommu ni t y .An dr i g htn ow,t h emo odi sno tg oo d. TheI nt er nat i onal Monet ar yFundl ower edi t sf or ec as tf orgl obal e c on omi cg r o wt ht h i swe ek .

 

FI CHTNER:Wh atwe ' r es e ei n gn owi spr o ba bl yk i n do fac or r e ct i o no f anov er l yopt i mi s t i cout l ookwehad. SHAPI RO:Eu r o pe ' sec o no myal my r e ad ys h r a nki nt h es e c on dq ua r t e r . Nowi tl ook sl i k ei tmi ghts hr i nki nt het hi r dquar t er ,t oo.That ' sgener al l y c ons i der edar ec es s i on.Al l t hi sne wsma madef orabadweeki nt he Eu r o pe ans t o c kma ma r k e t . Ger manChanc el l orAngel aMe Mer k e la ddr es s edpar l i amenti nBer l i n, s peak i ngher et hr oughani nt er pr et er . CHANCELLORANGELAMERKEL:( Thr ought r ansl at or )Thecr i si si s noty etper manent l yands us t ai nabl yo v erbec aus ei t sr ooti nr egar dt o c r e at i ngt h eEur o pea nec o no mi mi can dmo ne t a r yun i o n,a swe l l asi n r egar dt ot hes i t uat i onofi ndi v i dual members t at es ,i snoty etel i mi nat ed. SHAPI RO:I no t h erwo r d s ,Eu r o peh asb ee np ap er i n go v e ri t sec o no mi mi c pr obl emswi t hs hor t t er mfi x esr at hert hanl ongt er ms ol ut i ons .Sowhat ar et hel ongt er ms ol ut i ons ?Wel l ,nobodyagr ees . URIDADUSH:Th ep ol i c y mak ma e r sa r ec l ea r l yn ota l i g ne di nEu r o pe . SHAPI RO:Ur i Dadus hofCar n egi eEur op es a y st hi si saf ami l i ard i v i de. Ont h eo neh an d,t heh ea do fEur op e' sCe nt r a lBa nkbel i e v esi n s t i mul uss pendi ng-gi v i ngc ount r i esani nj ec t i onofmoney . Ont heot her hand,Ger manChanc el l orMer k el bel i ev esi naus t er i t yanddefi c i t r educ t i on. DADUSH:I ti sav er ydeepdi ff er enc e.Iwoul dc al l i tal mos tan i deol ogi c al s pl i t . SHAPI RO:An dt h ats t a nd offma ma yb ea sb i gapr o bl e ma st h eu nd er l y i n g ec o no mi mi ci s s u es ,s a y sJ on at h anPo r t esi nLo ndo n. PORTES:It hi nkwes houl dbev er ywor r i edb ec aus ewest i l l ha v et hi s i mpas s ewhi c hi seff ec t i v e l yapol i t i c al oneasmu muc hasanec onomi c one.

 

SHAPI RO:That ' snott os ayt hes i t uat i oni shopel es s.I nBer l i n, Fer di nandFi c ht ners ay sEur ope' ssal v at i onma yl i eont heot hers i deof t heAt l ant i c . FI CHTNER:Ther e' shopet hatt her el at i v el ys ol i dgr o wt hwe' v es eeni n t heU. S.ov err ec entquar t er sandt her el at i v el ygoodout l ookma many peopl ehav ef ort heU. S.ec onomy-t hatt hi scoul dc ont r i but et ot he s t abi l i z at i onoft heweak nes swe' r es eei ngi nt heEur oar eaandi n Ger many ,i npar t i c ul ar . SHAPI RO:Be f o r et h eGr e atRe c e s s i o n,Ame r i c a nc o n s ump t i o nh el p ed dr i v et heg l oba lec onomy . I nEur o per i ghtno w,man ypeo pl ear ehopi ng agr o wi n gAmer i c a ne co no myt my o da ywi l l h av et hes ameeff ec t .Ar i Shapi r o,NPRNews, London.