Europe: it’s a changin’

Europe is changing. Against all expectations, the advent of a single European currency, backed by a strong fiscal “Stability and Growth Pact”, could prove the catalyst for a much more efficient corporate sector. Despite the economic absurdity of the Maastricht criteria, the struggle to meet them is producing what Europe needs most ­ a smaller government take from national income.

And labour’s share in Europe’s national income is about to fall too. That means profits in Europe are set to rise through more efficient use of capital and labour under conditions of increasing global competition.