Europe's Two-Speed Dilemma - WSJ.com

AND, LESS CONSUMPTION! WHY?: Europe's Two-Speed Dilemma - WSJ.com: "- Sent using Google Toolbar"

What always seems to be missing from articles trying to cajole Europeans (and especially Germans) into doing more consuming is the issue of economic-utility to income that comes about with a VAT tax.

Thus, an extreme (Portuguese) example is the 20% VAT (recently raised to 21%) applied on top of a 20% car purchase excise tax. Thus the cost of a car (new or used) in Portugal is approximately twice the cost in euros as the same car in the US.

Not surprisingly, car dealers advertise 10-year car loans.

Combine these higher costs with lower average incomes and people just don't have either the wherewithal or the economic-utility desire to consume.