Business: Europe's Slumping Industries

Squeezed by imports, some big old sectors struggle to innovate

On the surface, European life seems glossier than ever. The roads leading to Rome are crammed with shiny new cars, the pricey restaurants of Paris are crowded with smartly dressed diners, and shops from Stockholm to Seville do a brisk pre-Christmas business in luxury items. But there is a dark underside to this bright picture. Unlike the U.S., the industrial nations of Europe never really recovered from the 1974-75 recession, in part because they avoided rapid-growth policies for fear of aggravating inflation. A consequence, as well as...

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