Europe's north-south divide holding back global prosperity
by Dean Carroll
The growing divide between a strong northern Europe and a weak southern Europe continues to threaten worldwide economic stability, according to the Global Competitiveness Report published today. Evaluating the results of the World Economic Forum's annual survey - it is clear to see that nations like Germany, Finland, Sweden, the Netherlands and the United Kingdom have managed to consolidate their top 10 global rankings despite the eurozone crisis.
In deep contrast – European Union member states in the south are in financial freefall; meaning investors, wealth-creating industries and financial markets are paralysed by the fear of what comes next. Spain is now just 42nd in the competitiveness rankings, Portugal is 49th and Greece is a woeful 96th – with all suffering from "macroeconomic imbalances, poor access to financing, rigid labour markets and an innovation deficit", according to the Geneva-based WEF. In short, it means that the economic and competitiveness gap between the north and south of the continent is stretching to breaking point.
The WEF report – based on thousands of 'executive opinion surveys' - assesses 144 nations and reveals that northern European countries dominate the leaderboard when it comes to governance, administration, finance and labour markets. Finland is 3rd, Sweden is 4th, the Netherlands is 5th, Germany is 6th and the UK is 8th – behind the United States, which ranks 7th. Three Asian economies also feature in the top 10. Singapore stays put in 2nd position with Hong Kong and Japan coming 9th and 10th respectively.
Among the BRICS countries – China was placed at 29th, while Brazil was 48th, South Africa was 52nd, India was 59th and Russia came 67th. Elsewhere in the world – the Middle East region performed strongly with Qatar being 11th, Saudi Arabia coming 18th and The United Arab Emirates placing 24th. Founder and chairman of the WEF Klaus Schwab singled out Europe as being the most problematic region.
In a thinly-veiled message warning European leaders to act quickly or face the most severe consequences, Schwab said: "Persisting divides in competitiveness across regions and within regions, particularly in Europe are at the origin of the turbulence we are experiencing today and this is jeopardising our future prosperity. We urge governments to act decisively by adopting long-term measures to enhance competitiveness and return the world to a sustainable growth path." So bad have things become in Europe that any talk of economic growth at all now seems like pie-in-the-sky rhetoric. To be continued.
The nations of Southern Europe need to cancel their debts and then operating their economies without debt will be possible. Just like an individual or company. The responsibility for the debt is a responsibility of those that lent them money when the debt was not secured and they need to be forced to accept it.
Ambrose Raftis - Charlton, Canada
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