OECD: No cure yet for 'eurosclerosis'

PARIS, Feb. 8 (UPI) -- The Organization for Economic Cooperation and Development is criticizing France, Germany and other parts of so-called Old Europe.

In its annual review of EU member states' economic growth rates, the OECD finds gross domestic product per capita in Germany, France and Italy falling, relative to the United States, to levels not seen since the 1970s.

"At current trends, with demographics the way they are, the average U.S. citizen will be twice as rich as a Frenchman or a German in 20 years," Jean-Philippe Cotis, OECD chief economist, said Tuesday.

The group's report blames labor rules, concluding that Europeans don't choose to work less than U.S. residents -- they simply respond to built-in incentives to leave the labor pool, at significant cost to taxpayers.

Cotis also blames protectionism. Merely aligning the financial regulatory regime in countries prone to banking protectionism with the OECD average could add as much as 0.5 percent to annual GDP, he said.

The top three countries in the share of cross-border loans in total domestic borrowing -- one measure of international competition -- are Iceland, Ireland and Luxembourg, Cotis said, noting that these three are also among the European Union's richest.