Europe’s misguided search for growth

Abstract:
The urge to be seen to be ‘doing something’ is leading Europe’s policy-makers to rely on the few instruments with which the EU can claim to foster growth. But, as Daniel Gros points out in this Commentary, they should recognise that today’s growth crisis is quite different than it has been in the past. In his view, the real bargain should not be austerity plus a Marshall Plan for the south, but rather continued austerity plus labour-market reforms in the south, combined with more infrastructure investment in Germany and other AAA-rated countries like the Netherlands.