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Western Europe’s Economic Stagnation
At the beginning of the 1990s, Western Europe is clearly facing more acute economic problems than are the other major countries of the oecd area. Both the United States and Japan seem to be hesitantly recovering in 1993 from their earlier, and relatively modest, slowdowns. Europe, on the other hand, after very slow growth in 1991–92, is heading into a slump that could well be deeper and more prolonged than the oil-induced recessions of 1975 and 1981–82 (Table 1). Gone is the euphoria that embraced the area in the late 1980s, when the rate of growth of output had (temporarily) surged. Its place has been taken instead by ‘Eurosclerosis’, a thesis already fashionable in the early 1980s, according to which the European economy is hopelessly ossified by (inter alia) overblown welfare states and powerful trade unions.
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