by Steven Rattner
New York Times
January 29, 2015
TOO often the debate over how to restart Europe’s economy veers into the conveniently crisp alternatives of stimulus versus austerity. Should the pressure to reduce government deficits be relaxed? Should central bank actions to lower interest rates have come sooner and been more aggressive?
That simplistic debate has returned to the forefront, with the European Central Bank’s plunge into purchasing the sovereign debt of its member nations and Greece’s resounding vote at the ballot box against spending cuts.
But the focus on macroeconomic policy underappreciates the critical importance of smaller structural problems that collectively amount to a bigger challenge for Europe.
Archaic restrictions on hiring and firing workers, flawed energy policies and kilometers of red tape that can make even starting a business difficult — just to name a few — have combined to damage the Continent’s ability to compete in increasingly global markets.