Sunday, July 17, 2005

Eurozone growth could stay sluggish till 2020, OECD warns

The OECD has voiced concerns about the economic prospects of the eurozone if structural reforms are delayed further. The Paris-based club of the world's 30 richest countries published its regular report on the development in the 12 member states of the European monetary union on Tuesday (12 July). The paper argues that economic growth in the area will be half of its current level in two decades if the countries' governments fail to implement necessary reforms. Concerning budgetary practices, the group has indicated that the failure of several countries to abide by the eurozone rules results from "blurred incentives, and weak surveillance and enforcement", adding that governments should show "greater ownership of the fiscal rules", underpinned by solid budget institutions.


At July 17, 2005 4:37 PM, Blogger erp said...

The 30 AECD Countries: Australia, Austria, Belgium, Canada, Czech Republic, Denmark, Finland, France, Germany , Greece, Hungary, Iceland, Ireland, Italy, Japan, South Korea, Luxembourg, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Slovakia, Spain, Sweden, Switzerland, Turkey, United Kingdom, United States.

Fascinating that not one South or Central American country is a member. I guess that blows to smithereens the theory that geography and resources are what matters in the development of a viable economy. No other part of the world rivals the natural resources, temperate climate, natural harbors, forests, etc. of this area.

The reason Latin America has remained so economically backward is political. Spain gave nobles and others they wanted to reward vast land grants which were run like feudal fiefdoms. There was very little intermarriage between the artistocratic Spaniards and the indigenous people who were and still are treated like peons. Few ordinary settlers from Spain or other European countries were encouraged to settle the land and build a great civilization as they were in what would become the United States.

These conditions of the very rich and the horribly poor were perfect breeding grounds for a Communist takeover and takeover they did. Latin America is still reeling from the past decades of degradation and violence as one dictator after the other plundered the people and their natural resources.

Will the next wave of violence be from Islamic fundamentalists? It's already started. We were surprised when on a vacation to Trinidad-Tobago couple of years ago to see their newspapers filled with stories about conflicts between island natives many of whom have converted to Islam and East Indian Hindus many of whom have lived on the islands for generations and who make up the vast majority of the civil servants.

Keep your eye on Latin America and don’t be surprised when you hear about bombings and killings in the name of Allah.

At July 18, 2005 7:18 PM, Blogger Evan said...

I recently read research in which the author used demographic trends and assumed that people drawing from the water of the increasingly parched welfare state will vote to keep it flowing. By those calculations the welfare state will become politically impossible to pare back in Italy sometime this year or next and in other European countries in rapid succession.


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