Many European countries and Japan need to free their labour markets and liberalise services to boost productivity growth.
France's economy is stagnant, statist, and uncompetitive and urgently needs reform.
Regional currencies will prove the best route to reconciling the economic imperatives of increasing international capital mobility with the political realities of the nation-state.
Europe's budget plans are better designed: countries from France to Greece are raising retirement ages; others, from Britain to Germany, have created new organisations and rules to encourage fiscal probity. But Europe risks overkill.
Governments need to lay out a credible path to reducing their deficits in the medium term, but without excessively enfeebling an already weak recovery. That means raising retirement ages and overhauling pensions; putting in place the budget rules and institutions that will curb future profligacy; and favouring spending cuts over tax increases.
Developing countries have much to gain from capital mobility: the ability to tap external sources of finance, greater financial efficiency from deeper stock and bond markets, and technology transfer and know-how from foreign direct investment.
