Monday, October 31, 2011

Slow Growth Outlook In Europe And Imposed Austerity Does Not Help

This article reviews several national economies in Europe and suggests that we had better get used to a slow rate of economic growth in Europe. Europe is also stuck in a quandary. Credit markets don't like the debt to GDP ratios in many countries. They want governments to cut spending and increase tax revenues or they might demand higher interest rates. Governments that have bought into this plan have seen lower growth and falling tax revenues. How does Europe escape from this trap?
They are damned if they don't reduce debt, and damned if they reduce spending and slow down economic growth.

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