Growing pains. Dissecting the causes of Europe’s lagging economic performance

One of a series of articles in this issue of Finance and Development under the theme 'Europe's conundrum', which focus on the economic challenges facing the European Union following the accession of 10 new members on May 1, 2004.

In this article, the author describes how after 30 years during which Europe became increasingly prosperous, its economic performance began to falter in the 1990s. However, within Europe, economic performance has varied widely. In the large economies, per capita output grew more slowly than in the United States, whereas some of the smaller economies -Greece, Luxembourg, and Netherlands - achieved greater success, and Irish GDP per capita rose from a level below the OECD average to one of the highest. Some of the reasons for the disparity in growth rates are differences in labour utilisation and labour productivity.

http://www.imf.org/external/pubs/ft/fandd/2004/06/index.htm http://www.imf.org/external/pubs/ft/fandd/2004/06/index.htm

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