Growth at any cost
When Britain's chancellor of the exchequer, Gordon Brown, weighed in recently on the debate over the drag Europe is exerting on world economic growth he was voicing a sentiment that many in the US have been expressing for a considerable time. His point that Europe's consistently feeble economic growth rates have been acting as a brake on the global economy was well made—and fair. There is no doubt that Europe is not pulling its weight in the way that the US is. As Brown reminds us, the US has been notching up growth of 3% per year on average for the past decade. Europe has managed that just once in the same time period. The last time the argument over Europe's slow growth rates surfaced was in May, when the EU was welcoming its 10 new members. At that time, anxious voices—particularly in the US—fretted over the dampening effect on growth that EU enlargement would cause. After all, with all those extra people to look after, how could Europe possibly post decent growth figures? That, of course, is precisely the point. Improving people's standards of living is a costly business, but it is something for which Europeans are prepared to pay. Well, most of them, anyway.
Out of the club
Gordon Brown's prayers might be answered by a proposal that emerged last month to replace the G7 group of industrial countries with a slimmer, more effective G4. Comprising only the US, China, Japan and the euro-zone, the new G4 would, its proponents say, more realistically represent the true economic superpowers in today's world. It would also bring Europe and the US together in a forum where the latter could teach the former a trick or two about economic growth. It's unlikely that Brown will be cheerleading for the G7 to be replaced by a group of four, however. If it happened, it would be a clear sign that Britain no longer deserves its seat at the top table of the world's decision-making bodies. And Brown's own determination to keep the UK out of the euro would come back to haunt him.
Until next month,