From the desk of The Brussels Journal on Tue, 2007-05-01 12:27
[T]he EU economies are not substantially better than they were in the 90s. Many are at the same level, others are worse. Ask any Italian what he thinks of the economy at the moment and if you’re lucky he’ll just shout at you for a few hours. The only reason your dollars don’t seem to go far any more is because the dollar has fallen significantly, not because the euro has risen. The euro is placing a massive inflationary burden on the EU economies, which no longer have the mechanism of altering interest rates in order to control inflation.
Further, there is no mechanism for national debt transfer, as exists in the US, which places further inflationary pressure on individual member states. This pressure is compounded by inflation in members states that are net recipients of EU funding (Spain and Ireland as examples) who are able to cut taxes to miniscule amounts because they’re getting funded by the other EU member states. All of this is combining to produce an inflationary economy with no control mechanism. Unemployment has risen constantly within the euro zone since the euro was introduced, and productivity has fallen just as constantly. National debts are going up, taxes are rising, GDP is falling.