Can Europe still afford the welfare state?

It's amazing how many people seem to think the answer to the above question is ‘no'. Globalisation, one hears repeatedly, makes the world increasingly competitive, driving down prices and killing off manufacturing industry. If Europe is to survive, it must cut costs, particularly the tax burden shouldered by business.

That means shedding our dependence on long paid holidays, lavish unemployment benefit, generous pensions and other such luxuries we can ill afford. This argument is repe...