While the debates in Europe are all about budget cutting, bailouts, austerity programmes, rules, sanctions, one doesn't hear much about real reforms aimed at generating gowth. The lack of growth is what got Europe with debt trouble in the first place. Since the inception of the euro, the eurozone has averaged an annual GDP growth rate of 1.5%. In the second quarter of this year, France the second largest economy in the eurozone after Geermany recorded zero growth. Unles the euro can bring real economic benefits in terms of growth, jobs, investments and higher incomes, then the debt crisis will stay a crisis. What is missing in Europe is for governments to build the infrastructure within which the private sector can generate economic growth. Ultimately it must be the private sector that is the driver of economic growth. While governments can aid in the process, it cannot be expected to be the primary driver of innovation, productivity and growth. When Ronald Reagan became President in 1981, the U.S. economy showed no growth and high unemployment. His plan was to restore business incentives for building businesses. He wanted to get the government out of the way of private sector job creators. The Reagan Plan had four principal initiatives:

  • Reduce tax rates across the board (Not increase taxes)
  • Reduce regulations and mandates on business
  • Sound government finances (Don't spend more than you can pay for)
  • Sound money

Together these policies increased growth, created jobs and brought America's financial markets back to life, creating the greatest economic expansion in American history. It's time for Europe to move back to basics by doing the things that will help private business owners and workers grow their business. It's time for the eurozone governments to implement an ambitious agenda for growth and employment to boost competitiveness.  

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