Ireland is one of the fastest growing economies in the European Union today.

All European leaders quail before it. To exorcise the demon, they are putting their economies through the wringer.

In Europe, banks supply roughly 70 of the credit to European economies, compared to 30 in the US. But many European banks are over leveraged zombies, kept alive by emergency public infusions of liquidity.

BRUSSELS The European Union s core countries these days, besides the original six founders, are the 15 member states that make up the European Monetary Union. They have converging economies and coordinated monetary and fiscal policies.

In fact, construction and real estate are the most promising candidates, as they account for roughly one third of European fixed investment and more than 17 million jobs. Although these sectors are unlikely to rebound to pre crisis levels in Greece, Ireland, and Spain for many years, other European economies, including the United Kingdom, Italy, and Sweden, as well as some Eastern European economies, have scope for further investment.

The European Union trading system was cited as a successful model with regard to granting special and differential treatment to weaker and smaller economies.

Mongolia welcomed the decision by the European Union to accord duty free access to over 7,200 items imported from small and vulnerable economies, including Mongolia, under GSP treatment.

The last thing a crisis weary Europe needs is a new competitiveness gap. But ambitious climate targets, as Germany and other successful European economies have shown, are not the problem.

Pessimistic Europeans are behind the curve. They are bracing for a 2007 US growth slowdown that already has taken place with little consequence for both the US and European economies.

Thus, the sheer magnitude of the task of reviving these economies is not overwhelming. But the political consequences of failure to deliver a message of genuine European solidarity will be.

The fact is that only the US and the massively over represented countries of the European Union supported the Greek bailout. Indeed, the major emerging economies all strongly opposed it, with the Brazilian representative calling it a bailout of Greece s private debt holders, mainly European financial institutions.

The European Commission has given Spain, France, and the Netherlands more time to comply with the European Union s 3 of GDP deficit ceiling. Even German government officials now concede that something more than fiscal belt tightening is needed to revive the economies of the eurozone periphery.

Unlike the US dollar, there is no obvious way to put pressure on the European Central Bank to depreciate the currency in order to obtain a competitive advantage over other economies. European governments are not in a position to instruct the ECB to purchase government bonds.

Over the past four years, 66 countries, 32 developing, 23 developed and 11 countries with economies in transition, including the European Union, have submitted a total of 134 voluntary reports to the Forum.

Another interesting example is provided by the European Bank for Reconstruction and Development, which focuses explicitly on the development of the viable private sector and supports the evolution of democratic institutions in transition economies.

A second obstacle to sustained recovery is the eurozone s bad neighborhood. Russia is becoming more assertive and aggressive in Ukraine, the Baltics, and even the Balkans (while sanctions against Russia have hurt many European economies).

Nonetheless, the experience of European transition economies suggests that the control of domestic banks by experienced Western banks based on full ownership can result in the emergence of a healthy and rapidly expanding banking sector.

Countries with a stronger fiscal position (that is, smaller structural deficits) should be encouraged to adopt more expansionary policies in order to contribute to lifting overall demand. Moreover, the European Investment Bank s lending capacity could be increased substantially, and European Union structural funds mobilized, to finance investment projects in the peripheral economies.

It is against this background that the euro was born, with the goal of boosting European economies by expanding their local market, lowering transaction costs, and facilitating the flow of information. In 1991, the loss of monetary policy independence seemed like a worthwhile trade off for Europe s economies today, it seems that it may have been a mistake.

Revolutionizing Arab Economies

Small, vulnerable economies

(e) Preparing national economies for integration into larger entities (for countries seeking admission into the European Union, accession to the acquis communautaire is a prerequisite, which entails subscribing to certain basic governance and public service values)

European banks have been operating on a great deal of debt and very little shareholder capital the essential buffer against potential losses. Any shock to sovereign debt or further downturn in local economies will be transmitted through an overleveraged and undercapitalized banking system to other European countries and quite possibly elsewhere, including the United States.

So today s emerging market economies should be richer than today s advanced economies were back then, right?

The success stories of some transitional economies do not guarantee sustained development for all such economies.

Specifically, an appreciating dollar improves the price competitiveness of European and Japanese companies in the US and other markets, while moderating some of the structural deflationary pressure in the lagging economies by causing import prices to rise.

The leading economies especially the US, European Union, and Japan should establish new programs to finance infrastructure investments in low income countries. The new lending should be at least 100 billion per year, directed towards developing countries.

So Europe must cope with a new geopolitical landscape that is being profoundly reshaped by these emerging economies. In this new global constellation, European integration both economic and political is central to achieving ongoing prosperity and influence.

Some European analysts predict that, over the longer term, greater stability will follow the political changes in the Maghreb, with perhaps more than a million unemployed Moroccan and Tunisian immigrants returning home if their countries economies improve.

Growth is important to us in Europe, and it is even more important to Asia s emerging economies. But, as European experience shows, it is often worth sacrificing short term benefits for the sake of longer term gain.

The Two Innovation Economies

Emerging Economies Misinsurance Problem

Small and vulnerable economies

The urgency of such a program has been underscored in much recent analysis of the poor performance of the major continental European economies France, Germany, and Italy compared with smaller and much more dynamic economies in northern and central Europe. But, at the same time, small states are also more likely to be successful in defending crucial aspects of the welfare state.

The gaps in these countries labor markets from software specialists to physicians to home health aides will be immense. The European Union s labor force will decline by almost 70 million workers in the next 40 years in the absence of significant net immigration (combined with a much higher retirement age), European economies and social safety nets will shrivel.

Either scenario would greatly aggravate Europe s crisis soaring oil costs or another US recession would harm even the strong northern European economies, to say nothing of the already depressed countries in Europe s south. But, even then, the humanitarian consequences especially in the case of another Middle East war would most likely overshadow these scenarios impact on the European crisis.

But, like financial regulation, nuclear regulation in the EU, even with its Euratom treaty, is still essentially national. And, given the deep disparities in nuclear power s importance for European economies, consensus on regulatory harmonization is hard to reach.

But Asia cannot be complacent financial systems remain fragile economies are burdened with high fiscal and current account deficits and Asia remains too heavily dependent on North American and European export markets, increasing its vulnerability to external shocks.

By sacrificing the needs of growing economies that have met their goals to those of more established markets, the Commission is rewarding inefficiency and reducing the effectiveness of the European Union s climate change policy and its common market.

The system broke down when European countries, particularly France, decided to stop funding those deficits. But the economic model persisted, with Asian economies stepping in to finance the US deficits, while using the US market to grow rapidly.

The ECB s über aggressive actions have achieved little in the way of bringing about long awaited structural transformation in the region. Crisis torn peripheral European economies still suffer from unsustainable debt loads and serious productivity and competitiveness problems.

Estonia, Lithuania and Latvia (European Union States since May 2004), later joined by Russia and a few other transition economies, have introduced flat taxes on personal incomes which apparently increased their tax revenue and reduced the cost of collection.

The economies were not growing.

Deflation in many advanced economies.

The Emerging Economies Eurozone Crisis