Europe as an Economic Powerhouse : How the Old Continent Is Gaining New Strength

Two senior directors at the management consulting firm McKinsey & Co. apply their expertise to the European Union, providing an in-depth analysis of its current economic situation while arguing that the US model in not appropriate for the European market. As the European market expands as a single entity, it is facing economic challenges that can only be remedied by reform. Intended as a diagnosis of the status quo and as an agenda for change, Kluge and Hassbender argue that the US nation- state model is outdated--not the solution to Europe's economic woes. In order to stay competitive in the global market, the EU must complete the European single market, adopt smart regulation, set standards in key areas of future growth and transform the state system. Through continued harmonization of its educational systems, coping with its demographic problems and better engagement in globalization, Europe will gain the leading edge.

Introduction Part I Analysis of the state of Europe 1 Europe's lost decade - '1992' and all that The world champion challenged!; Europe's plans - high hopes, great expectations; 2 6: reality comes calling 2 Europe's real crisis Disappointing growth rates; It's the productivity, stupid; The myth of the destructive welfare state; The myth of the generous welfare state; The myth of globalization dangers; Europe's ticking time bomb; Productivity growth: the most important way out 3 Why the US model is not suited to Europe - and what we can learn anyway The United States as a model: a brief survey; Success on a shaky foundation? The United States in 2 6; Selective learning instead of omnibus solutions 4 Economic indicators and the right measures Origins and limits of the 'gross domestic product'; Beyond macroeconomics; The Quality-of-Life Index Part II Europe's journey to the top 5 The power of unity: completing the single market 1992 and the consequences; Bigger, better - richer?; Financial services and capital markets; Expansion: a big step towards the single market? 6 What comes after deregulation? Smart regulation! Catching up through deregulation: two examples; Limitations and risks of deregulation; Smart regulation instead of simple deregulation; New ground rules for the old continent? 7 The concept of category definition Category definition and redefinition; Creating and sustaining category definition; Examples of European category definition; Missed opportunities for category definition; Beyond the company: 'Made in Germany'; Category definition for Europe; How the public sector can support the category definition process 8 Reinventing the state Investing in Europe's future; Trimming state spending to invest in the future; Secondary effects: why 'less government can be more'; Getting the job done 9 Epilogue A voice for Europe in world affairs; Making it happen