[ClumsyPilot]

> Economically, Europe has been stagnating

thats since 2008, when ECB and most of european governments have decided to go full Aysterity and cut all kinds of investments. Prior to this idiocy EU economy was actually larger than US economy.

These ecents are notbrelevant to the taxation model, which predates them by decades

[NeverFade]

The EU economy fell way below the US (after being roughly equal) because they were never able to compete in the new digital economy. All the big tech companies are American. You also have to ask yourself why the ECB and European governments had to cut spending. Perhaps because the levels before weren't sustainable? Perhaps because you can't just keep living beyond your means, as eventually you'll run out of other people's money?

[RandomLensman]

It is now pretty much accepted that the European reaction to the financial crisis was massively worse than the American. A big and expensive error can have long lasting effects - perhaps no need for beyond means, digital etc. but that is rather a result not a cause.

[Detrytus]

The big and bad error that caused European bad reaction to the financial crisis was the introduction of common currency. Eurozone does not form Optimum Currency Area, under Mundell's definition (https://en.wikipedia.org/wiki/Optimum_currency_area), so any significant crisis is made worse by "asymmetric shocks".

[RandomLensman]

I disagree with that, the policy errors where far more direct (and well analyzed). For example: poor bank recapitalisation, wrong incentives about balance optimization, ECB even raising rates in the beginning of the GFC

[em500]

"Full austerity" is wildly hyperbolic. Here's EU government spending as share of GDP: https://tradingeconomics.com/european-union/government-spend...

Try to click on MAX and spot when governments went "full austerity".

[miguelxt]

What austerity? In Spain’s case, both debt to GDP and tax revenue to GDP ratios has been increasing since a decade ago. That’s the contrary of austerity.

[ClumsyPilot]

tax revenue to GDO? how is that relevant to government cutting spending? I never said they've cut taxes.

If economy collapses, state recenues drop, ofcourse debt will grow