Europe's talents and resources – its physical, human, and natural capital – are the same today as they were before the crisis began. The problem is that the prescriptions imposed are leading to massive under-utilisation of these resources. Whatever Europe's problem, a response that entails waste on this scale cannot be the solution.
The simplistic diagnosis of Europe's woes – that the crisis countries were living beyond their means – is, at least partly, wrong. Spain and Ireland had fiscal surpluses and low debt/GDP ratios before the crisis. If Greece were the only problem, Europe could have handled it easily.
An alternative set of well-discussed policies could work. Europe needs greater fiscal federalism, not just centralised oversight of national budgets.
Europe might not need the two-to-one ratio of federal to state spending found in the US; but it clearly needs far more European-level expenditure, unlike the miniscule EU budget (whittled down further by austerity advocates).
A banking union, too, is needed. But it needs to be a real union, with common deposit insurance and common resolution procedures, as well as common supervision. There will also have to be eurobonds, or an equivalent instrument.
European leaders recognise that, without growth, debt burdens will continue to grow, and that austerity by itself is an anti-growth strategy.
Yet years have gone by and no growth strategy is on the table – though its components are well known, being policies that address Europe's internal imbalances and Germany's huge external surplus, which now is on par with China's (and more than twice as high relative to GDP).
That means wage increases in Germany, and industrial policies that promote exports and productivity in Europe's peripheral economies.
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ATHENS—The head of Greece's privatization agency and a senior finance ministry official resigned Saturday, after they were charged with dereliction of duty during their former tenures as board members of the country's state-owned power company.
Takis Athanasopoulos said he was stepping down as chairman of the Hellenic Republic Asset Development Fund—after only a few months in the job—to ensure that the pending case wouldn't affect the country's privatization program. But his resignation marks a fresh blow for the privatization agency, which has been plagued by management changes in the two years since its inception.
The Conservatives would consider leaving the European Convention on Human Rights if they won the 2015 election, the home secretary has said.
Theresa May told an event organised by the ConservativeHome site the party would also scrap the Human Rights Act.
She said it restricted the UK's ability "to act in the national interest".
A private poll by ex-party treasurer Lord Ashcroft, meanwhile, suggested the party would lose 93 marginal seats to Labour if the election was held now.
The BBC understands Mrs May was putting forward ideas for the next Conservative manifesto, and such a move was not current government policy.
The home secretary said she thought David Cameron would lead the party into the next election, and BBC political correspondent Ross Hawkins said there was no sign the speech heralded a leadership challenge.
The former Tory Party treasurer, who has donated millions of pounds to the Conservatives, used the speech to dismiss earlier newspaper claims he has withdrawn support for the party.
The peer said he will fund polling research rather than continue to provide large financial donations.
He added: "I don't want to see a Labour majority of 4, let alone 84. But I hope this puts the challenge into some sort of perspective.
"We have a long way to go to hold onto the seats we gained last time, let alone pick up many more.
"Things are slightly less grim than the headline polls suggest, and we have everything to play for," Lord Ashcroft insisted.
But Conservative Party chairman Grant Shapps told activists the poll was simply "a snapshot" of what may happen.
He revealed he was knocking on doors on Saturday morning, saying: "I wasn't out asking people for their votes, I was asking what we could do for them."
He added: "That's the most important lesson we can learn. We need to get out there and get to know people.
"We can spend the next two years working out strategies and trying to sub-divide votes - it will get us nowhere."
The Conservative Home conference was organised to consider the strategies needed to help the party win broader support in 2015.
Yet that is not how the matter was regarded by voters in the recent Eastleigh by-election, where concerns about uncontrolled immigration were the biggest issue on the doorstep.
The European Commission claims the problem of people moving from poor EU countries to wealthier ones in order to access welfare simply "does not exist".
That is utterly delusional. Bulgaria and Romania, the two countries whose citizens are about to acquire full freedom of movement rights across the EU, are two of the poorest countries in Europe.
Not only are wage levels low but benefit levels are lower still and coverage is far less comprehensive than in Britain. Both Bulgaria and Romania have major problems with organised crime.
This idea that worrying about excessive immigration is due to a false consciousness among ordinary people persists, despite the main political parties having finally been forced to admit the problem is real.
Of course, there is one compensation to be had from this latest infuriating piece of Brussels high-handedness: if the Eurocrats do not believe that anybody from the European mainland ever comes to Britain in order to get benefits then surely they can have no objection to Britain disqualifying such people from claiming them.
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