washingtonpost.com — Speaking of things that the European crisis is not about, while I was in Germany, my colleague Robert Samuelson wrote that “Europe’s turmoil is more than a currency crisis and was inevitable, in some form, even if the euro had never been created. It’s ultimately a crisis of the welfare state, which has grown too large to be easily supported economically.” I don’t think that quite works. Take Germany. They have a pretty big welfare state: pensions, health care, paid vacations, unemployment benefits equal to two-thirds of one’s income. In 2007, Germany spent 25.2 percent of their GDP on such things. Greece spent 21.3 percent on social policies. Yet Greece is in crisis, and Germany is fine. In a broad sense, I don’t think the crisis in Europe is really even about debt. It’s about the interplay of slow growth, heavy debts and weak institutions. But it’s really not about welfare states.
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