Europe Needs Investment More Than Budget Rules

After vacillating for weeks over the failure of Spain and Portugal to comply with Europe’s budget rules, the European Commission decided recently to vacillate some more. It will review the countries’ excessive borrowing in July -- after Spain’s general election. That’s the trouble with fiscal rules that aren’t enforceable, and that you wouldn’t want to enforce even if you could.

Europe needs wholesale reform of its failed fiscal framework, but it lacks the necessary political will and popular support. Until this changes, trying harder to promote investment would be more effective than just hoping for the best.