High taxes in European Union member states will make our economies economic dinosaurs, warns the European Central Bank. The Financial Times reports:

Many European governments could slash their spending by a quarter or more and still provide top quality public services, a senior official at the European Central Bank argued on Friday [23 March].

The radical prescription proposed by Jürgen Stark [pictured], an ECB executive board member, marked the boldest incursion yet by the Frankfurt-based institution into fiscal policy. “European governments need to choose whether they want to become the economic dinosaurs or rather the mammals of tomorrow,” he said in speech in Berlin…

Government spending of between 30 per cent and 35 per cent of gross domestic product would be consistent with “reasonably low taxes that allow us to remain globally competitive” while ensuring governments achieved “core social and economic objectives” with sufficient left over for new challenges such as climate change, Mr Stark maintained.