The Telegraph reports on a paper by the former Prime Minister of Finland which was written for the European Union:
Europe’s most successful companies are turning their backs on EU markets because of red tape, a high-level report said yesterday.
The companies that Europe needed to survive were instead investing more money than ever in the United States and Asia, concluded the report, presented to the European Commission in Brussels.
The findings made unsettling reading for the EU leaders, ripping into their pledges to build a “knowledge-based Europe” that would overtake America in 10 years. The reality was the opposite. Not only were US, Chinese and Japanese firms outspending Europe on research and development, the gap with Europe was growing.
Perhaps most damagingly, Europe’s most important countries were pouring more and more of their technology investment overseas, as they despaired of the European Union becoming “innovation friendly”.
Unless EU governments took bold action to increase spending on research, freed labour markets so skilled workers could move more easily, and stopped pouring taxpayers’ money into dying industries, Europe’s post-war way of life was doomed.
The report said: “Europe must break out of structures and expectations established in the post-Second World War era that leave it today living a moderately comfortable life on slowly declining capital. This society, averse to risk and reluctant to change, is in itself alarming but it is also unsustainable in the face of rising competition from other parts of the world.”
The report also noted that “Europe badly needed to extract more productivity from each worker.” Lots of luck; it seems that just about any effort to improve efficiency in Europe is responded to with a strike.
Europe’s decline might very well be irreversible, not so much because its leaders are benighted–statism always tends to be popular, I suppose, among those who run the state–but because there doesn’t seem to be a groundswell of concern among Europe’s peoples. When the United States appeared to be in decline during the 1960s and, especially, the 1970s, huge numbers of Americans rebelled against the idea that decline was an inevitability we should all get used to–an idea that was much more commonly expressed, at that time, than many people now realize. The American people chose Ronald Reagan to lead them mostly, I think, because he was the politician who most clearly and eloquently refused to accept the prospect of declining wealth and influence. I don’t see any similar process underway in western Europe.