Western Europe 1979-2009. A View from the United States.
Abstract
Western Europe may be heading for trouble, trouble that can extend to the United States, for which Western Europe remains the most important economic, political, and security partner. What the United States needs in Western Europe is, at best, a strong and equal partner and ally; at worst, a region no less stable than it is now. What it is likely to get is, at best, a Western Europe like the current one, with hope for the long-run future; at worst, increasing political as well as economic instability. The sources of the trouble lie in the West European political economy. The imposition of the highly restrictive Maastricht fiscal and monetary criteria for membership in the European Monetary Union (EMU) on an economy already twisted out of shape by East German reconstruction has brought about high unemployment and other harsh realities that have proven politically unacceptable in France and may well do so in Germany. If Maastricht's rigid macro-economic constraints are relaxed if EMU balances its stress on inflation control and fiscal rectitude with equal emphasis on employment and growth then rising unemployment may be reversed in the short run, and conditions can be set for long-run improvement. If not, and if unemployment remains near or above 12 percent, then the worst is yet to come.
Document Details
- Document Type
- Technical Report
- Publication Date
- Jan 01, 1998
- Accession Number
- ADA353552
Entities
People
- Robert A. Levine
Organizations
- RAND Corporation