When officials from the Organization of Petroleum Exporting Counties (OPEC) get together to talk oil prices, as they have been doing, Europe listens. And for good reason. Europe - which is far more dependent on imported oil than is the United States - would welcome the benefits of a reduction in world oil prices. With unemployment at the highest overall level since the 1930s, Europe badly needs a period of sustained economic growth.
A reduction in the cost of energy, of course, would not by itself turn around the sluggish European economy. Some European nations are themselves energy producers and could lose needed revenues through lower oil prices. Indeed, it was the price-cutting actions of Norway and Britain that led to current intense negotiations by OPEC producers to attempt to hold the line on oil prices.
The larger point, however, is that Europe now needs to take advantage of every favorable economic development that it can, if its current levels of unemployment are to be reduced. For Western Europe as a whole, joblessness is in the range of 20 million people. Unemployment rates in the largest countries of Europe are particularly troubling: Britain, around 13 percent; France, 9 percent; West Germany, 8 percent. Much of that unemployment - perhaps over 40 percent - involves younger workers. Such a high degree of youth-related joblessness has disturbing implications for the long-range political stability of Europe, since European young people have so often taken to the streets in protest over a wide range of issues during the past two decades.
A number of questions need to be asked about Europe's unemployment problem: What is the economic outlook for the Continent during the next year or so? Can Europe's economy grow fast enough to absorb the many unemployed workers? What can be done to encourage growth - and thus job creation?
* Outlook: The consensus view among economists suggests that Europe will post only modest real economic growth during the next year, probably in the range of this year's growth. That means between 2 and 2.5 percent. The reason? World economic growth is expected to slow somewhat from the higher levels of economic growth this year. That by itself wouldn't be so bad, were it not that Europe's growth has lagged behind that of North America and Asia throughout the current recovery. If the world economy cools, to a growth rate of around 2.5 percent next year from the 4 percent range expected this year, Europe will not have the momentum to produce the higher growth necessary to bring about a major expansion of jobs.
* Jobs needed: For the Common Market nations alone, 15 million new jobs must be created between now and 1990 to ensure full employment. Modest growth of 2 to 2.5 percent annually cannot do that. During the past decade alone, it should be recalled, Western Europe created some 500,000 to 600,000 new jobs. That compares to between 10 and 12 million new jobs created in the United States.
* The task at hand: European nations need to reform tax and social laws that enable governments to exercise too large a role in economic affairs. But the right type of government support is needed. For example, companies that hired workers could be given tax breaks - or a tax subsidy - so long as they were not tempted to get benefits through firing existing workers. But government aid for inefficient state-run industries needs to be scaled back. And changing economic conditions press unions to adjust. Such reforms will not come easily, as witness the inability of Mrs. Thatcher's Conservative-led government in Britain to make substantial changes in the British economy. And a question must be asked: Would Europeans welcome a fundamental alteration of their more social-welfare-oriented economies?
Clearly, the entrepreneurial spirit needs a boost in Europe.
European political leaders need to take bold action on the economic front. Europeans have traditionally risen to the demand of the hour - whether to rebuild countries torn by war, or, earlier in history, to send out explorers, traders, and navies for taming entire continents and extending Europe's languages and laws far beyond its immediate shores. There is no reason why - given a sense of resolve - Europe cannot meet its pressing employment demands.