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Sustainable growth for Europe: the four crises and a call for reform

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European View

Abstract

In this paper, the authors demonstrate that the current crisis is based upon four different crises with different sources, which must all be solved in different ways. In addition to this, they highlight individual issues within individual European economies and in the current institutional set-up of the European Union. On the basis of this analysis they provide clear suggestions about what needs to be done to recover growth in Europe.

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Notes

  1. We could also refer more narrowly to a banking crisis.

  2. This argumentation is simply illustrated by the German Council of Economic Experts (2011) with the following formula:

    $$ {\text{p}} = {\text{d(i}} - {\text{g)}}, $$

    where p is the primary surplus needed to hold the debt-to-GDP ratio (=d) constant, i is the nominal interest rate and g the GDP growth rate. For a detailed and intertemporal analysis see Blanchard (1990).

References

  • Blanchard, O. (1990). Suggestions for a new set of fiscal indicators. OECD Working paper no. 79.

  • Brok, E., & Langen, W. (2011). Für ein starkes und stabiles Europa. Schriften zur Europäischen Integration, CDU-CSU-Gruppe in der EVP-Fraktion im Europäischen Parlament, Sonderausgabe, November.

  • German Council of Economic Experts. (2011). Assume responsibility for Europe. Annual report 2011/12.

  • Lucas, R. E. (1982). On the mechanics of economic development. Journal of Monetary Economics, 22, 3–42.

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  • Mombaur, P. M., Langen, W., & Rauen, P. (2001). Freiheit- Leistung- Wohlstand: Die soziale Marktwirtschaft prägt Europa. Division, Dt. Inst.-Verlag.

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Authors and Affiliations

  1. European Parliament, Rue Wiertz 60, 1047, Brussels, Belgium

    Elmar Brok & Werner Langen

Authors
  1. Elmar Brok
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  2. Werner Langen
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Correspondence to Elmar Brok.

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Brok, E., Langen, W. Sustainable growth for Europe: the four crises and a call for reform. European View 11, 189–199 (2012). https://doi.org/10.1007/s12290-012-0240-4

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  • DOI: https://doi.org/10.1007/s12290-012-0240-4

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