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A high price for a faster economic growth

Euro zone is on the edge: frail economies like Greece or Portugal, or Spain, with huge debts and wide current account deficits, are daunting richer countries like German or Netherlands, less vulnerable.

There is just one therapy for that malaise: to grow faster and therefore to create more jobs and attain a higher productivity. Otherwise, to balance the weaker economies in the euro zone would require heavy sacrifices for households and businesses; and substantial bad consequences even for the richer countries that, in recent past, exported goods and services in the highly indebted Greece, Portugal or Spain.

Policymakers in euro zone have always said that a more dynamic economy and more jobs were their top priorities. Just words, it turns out… In order to attain a faster growth, it is not enough to implement a painful, and commonly advocated, labour market reform: Spain did it, in a bold way, with ambiguous results. No, each country in the Euro zone have to shake product and service markets; to encourage changes in the financial structure and organization of companies and groups; to allow the birth and the expansions of new firms and the decline of old and inefficient ones; to stop picking up (and protecting) banks and businesses as “national champions”; to fight corruption and organized crime; to promote competition and innovation in every corner of its economy; and to foster a sound financial system. Each firm and each businessman have to take up the challenge posed by a real free market, and step forward.

But… how many people are willing to pay such a price?