Preparing for the Green Exit

Thus far, Europe’s response to the debt crisis has been impeded by a false juxtaposition of austerity and stimulus. Productive investments in areas such as infrastructure and knowledge, can not only stimulate growth and employment in the short term, but also are a necessary condition for long-term prosperity.

Solvent countries currently can borrow at near-zero interest rates, so the time is right to invest in long-term productive assets in the peripheral countries, thus helping to facilitate the structural reforms that Europe needs to claw its way out of crisis and into a sustainable, prosperous future.

This is a European crisis, so all of Europe must share the burden of adjustment. That means coming together to provide the resources needed to restore competitiveness, revive growth, and prepare to face the challenges of tomorrow.

Laurence Tubiana is Director of the Institute for Sustainable Development and International Relations (IDDRI) at Sciences Po in Paris and a professor at Columbia University. Emmanuel Guerin is Director of the Energy and Climate Department at IDDRI and a visiting fellow at London School of Economics.

Copyright: Project Syndicate, 2012.www.project-syndicate.org

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