Breaking with dogmas can pull the euro area out of the slump

Michel AGLIETTA Professor at Paris West University, Scientific Advisor to the CEPII, former member of the French High Council for Public Finance [vc_btn title= »Télécharger l’article » style= »outline » color= »blue » align= »right » i_icon_fontawesome= »fa fa-file-pdf-o » add_icon= »true » link= »url:http%3A%2F%2Fconfrontations.org%2Fwp-content%2Fuploads%2F2017%2F01%2FEN-Interface-106-ILT-p4.pdf||target:%20_blank »] Today, Europe’s economic policy priority must be to pull the euro area out of the slump and avoid the risk of secular stagnation, with persistently low growth. After the 2008 crisis, the United States managed to reverse their growth trend by improving total factor productivity. The situation is very different in the euro area due to weak recovery and above all differences between countries. Prospects for potential growth in the area still stand at around 1.5–2%, with great disparities in total factor productivity. Differences in Europe are not caused by fiscal adjustment problems. They are associated with substantive differences in productivity dynamics, which polarise creditor and debtor countries. Since the beginning of the crisis, the great saving glut