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In the European Union, the promise of growth and the fear of stagnation are now linked to the notion of a single Continental currency, the euro. Bressand predicted that, "barring an act of God, the euro will be in place on time," in 1999. Defying conventional wisdom, he forecast that nine or 10 initial countries, including Spain and Italy, would adopt the new standard, to be joined shortly thereafter by two or three others, including current holdout Britain. The peripheral members of the E.U., he observed, have worked harder at cutting their budgets in order to meet the Maastricht Treaty's criteria for joining the currency union than have the E.U.'s two sluggish core members, France and Germany. The danger will come if the E.U. is lulled by the success of the euro into postponing badly needed structural reforms. As an insurance policy against that, Bressand argued, Europe should use the advent of the euro as a springboard to speed the entry of new members from Eastern Europe: "When we have this double success of the euro and enlargement, reform of the welfare state will be almost inevitable." Other panelists were more skeptical. Courtis gibed that Europe's heavy-handed labor regulations make it "an economic crime to give someone a job," contributing to Europe's 11% jobless rate, while Anders Aslund, a senior associate at the Carnegie Endowment for International Peace in Washington, said the experience of his native Sweden shows "the system will not allow welfare reform."
Aslund spied similar tendencies in Poland, Hungary and the Czech Republic, where tax collections equal half of gross domestic product. "They are becoming premature Western welfare states," he said, "getting stagnant, stuck in the entitlements trap and no longer doing serious reforms," while chronic laggards Romania and Bulgaria "are in a total mess." As for Russia, it has become at once stable and stagnant, Aslund argued, owing to the nonexistent reform agenda of Prime Minister Victor Chernomyrdin. "He has no vision, no strategy, nothing--and he has his ideal government where every minister is weaker than himself." In the meantime, GDP fell 6% last year, and 75% of Russian workers are not getting paid because "managers prefer to steal from the workers," yet surprisingly, this seems to pose little risk of social upheaval. The reason, according to Aslund: "Anybody who wants to make a fortune in Russia can do so. It's pretty much like the U.S. used to be in the 1890s." Or as Courtis put it, "Marxism has produced the kind of capitalism Marx wrote about."