For immediate release: May 23, 2006
Effect on European Union Focus
of Dallas Fed’s Economic Letter
DALLAS—The European Union must liberalize its economy or face higher unemployment rates and slower economic growth, according to the May issue of the Federal Reserve Bank of Dallas’ Economic Letter.
In their quest for integration, members of the European Union have adopted less competitive economic policies than the United States, according to senior economist Jason L. Saving. The consequences of those policies have been magnified by globalization.
“Globalization places a premium on economic freedom and gives nations greater incentive to engage in policy competition aimed at liberalizing their economies,” Saving writes.
The direction of policy in the European Union is far from decided. Saving says that while the French government recently withdrew its proposal for a probationary employment period for French youths, Germany is taking positive steps toward “limiting labor’s historic influence over corporate strategy.”
The May 2006 issue of Economic Letter can be found at www.dallasfed.org.
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