Robert Samuelson says that Europe is going out of business.

A few countries (Britain, Ireland, the Netherlands) have acted, and there are differences between Eastern and Western Europe. But in general Europe is immobilized by its problems. This is the classic dilemma of democracy: Too many people benefit from the status quo to change it; but the status quo isn't sustainable. Even modest efforts in France and Germany to curb social benefits have triggered backlashes. Many Europeans -- maybe most -- live in a state of delusion. Believing things should continue as before, they see almost any change as menacing. In reality, the new E.U. constitution wasn't radical; neither adoption nor rejection would much alter everyday life. But it symbolized change and thereby became a lightning rod for many sources of discontent (over immigration in Holland, poor economic growth in France).

With the recent drop in the Euro, they may in fact be about to have a going-out-of-business sale.

Actually, what will end up completely wrecking the EU is more likely to be unwillingness by many countries to reform some EU subsidy policies (in particular the agricultural ones) and the unwillingness by some (other) countries to finance disproportionately high percentages of the EU budget.

Good thing the dollar has finally gained some value, it's been screwing up my bottom line no end. Ultimately it should be good for the main European economies, assuming that they deal with some of the infrastructural problems.

From a purely manufacturing and export perspective it's hard to fault a lot of these companies. Look at Renault. Currently just about the most succesful car company on the planet.

I generally don't comment on political stuff, but I'll take a stab at this one 'cause I think Samuelson wrote this article just so he could justify getting a paycheck this week. If he's actually done any time in Europe I'd suspect it was spent hanging out with fellow foreign press and schmoozing with upper class diplomats rather than getting to know the populace.
First, I can understand the reluctance of Europeans to accept an EU- there are still enough folks around who remember the last time efforts were made to put Europe under one flag (albeit one with a swastika) and it was no picnic.
I have a problem with his wording, "This is a classic dilemma of democracy," as if to say democracy is a bad thing. If it is, the US needs to re-examine its foreign policy- and if it is, does he mean a swing toward
social-ism (there's a drug name in there the autocensor didn't like)is better? The Europeans are aware of having lived next door to a Union of Soviet Social-ist Republics for decades- and they saw it too, was no picnic. The remains of the USSR will be spending many decades recovering from it.
OK, we now know Paul Erlich was wrong- but that doesn't necessarily make a low birth rate a bad thing. Europe is a place of limited space and limited resources- it's not a bad idea to put the brakes on population growth; keeping in mind that this planet is a place of limited space and limited resources.

BUT! I do heartily agree with ol' Bob on this one: Europeans are getting lazy. Early retirement, long vacations and exceedingly generous benefits have many countries there on the fast track towards a welfare state. I'm really tired of hearing visitors in their 30's and 40's come back to the US after spending time in say, Italy- and saying 'I felt so out of place there; everybody my age is retired!'

I have a friend who is an avowed EUROPHILE. He goes every year and comes home to tell us all how cool, layed back, and OLD it all is.

I have often wondered if that was the same as lazy, self centered and going down the tubes. Seems I have my answer.

Actually SpaceCat I have heard more than once that if you remove the extra populational growth of the USA vs Europe factor, both economies are growing at the same rate.
So the problem is indeed that people have few kids. That, plus increased life expectancy, are the problem. Well, not the problem. The problem is the system has not adjusted to the new realities yet.
We should boost the population growth rate here in Europe via economic incentives (people without children pay more taxes?) and increase the mandatory age of retirement.
We have got lots of food, so might as well use it.

In the meantime increased immigration rates are picking up the slack, but that can lead to issues like the Netherlands are facing now.

It is extremely hard to change the system to be more economically liberal without facing protests. Agricultural aid is a good example. The Netherlands are also one of the major recipients, in case you did not know. Mostly animal farming (pigs, etc).

Most of the EU economies already or are starting to provide bid tax breaks for people with Children. Some of the comments raised in the article though are red herrings and igores the strength and productivity of a lot of mainland EU businesses.

Unless those tax breaks for children are substantial (perhaps even as much as no taxes for several years), I think the economics will continue to favor two working parent families (at least in the cases when both parents are educated), which means a low child count.

We should boost the population growth rate here in Europe via economic incentives (people without children pay more taxes?) and increase the mandatory age of retirement.

Does "mandatory age of retirement" mean that once you are past that age you ARE LEGALLY NOT ALLOWED to work? If that's true, it is demented from overall economy viewpoint (although makes perfect sense for young workers!) -- just like France's ban on working more than 35 hours per week. Giving people an option to retire is one thing -- forcing them to do so whether they want to or not is quite another, -- and unsustainable in the long run.

"strength and productivity"?

Exactly what technological areas would mainland EU be on the forefront of?

And if there's all this "strength and productivity," exactly why is the unemployment rate so high?

Now, in some places, the unemployment rate isn't quite as bad as France and Germany, but then, the point of EU was to draw them into the same web of regulations and bureaucracy, wasn't it? Force them to have the same level of social welfare spending (and attendant taxation) so that those "Polish plumbers" wouldn't overrun France?

And if there are already tax incentives in place, as Karl Hallowell suggests, either they're insufficient or there's something else at work, given the downward spiral in demographics. (Not that Europe is alone in this; Japan's demographics are, if anything, arguably worse.)

I was stationed in Germany for 2 years (78-80). They already had financial incentives for women to have children, although I don't remember the particulars. Even then, Germany's birth rate was low, perhaps below the replacement rate (2.1 children per woman). While I can't confirm it, I was told at the time that all new mothers were given 6 weeks in the hospital in bed rest.

The US spent trillions protecting Europe for decades, so they didn't have to pay much for their own defense. This allowed them to set up very elaborate and expensive social programs, extensive vacation, lavish unemployment benefits, etc. One reason why their job growth is so low is that, once hired, it's almost impossible to lay off surplus employees.

We used to have a joke: "Europe is 20 years behind America and working hard 3 days a week to catch up."

It still rings true.

Depends on the country, some of the tax breaks are pretty serious. Which, frankly, pissed off a high income person like me with no kids, no end.

Productivity has to improve over population or the entire planet is ultimately screwed.

Based on my experience of working in France the 35 hour limit is a bit of a red herring. Noboddy in our office worked close to that.

I was told by friends who worked directly in manufacture that the shop floor people did but non of the office or management people.