Daniel Gros argues in this commentary that the cause of the transatlantic growth gap following the recovery starting in 2010 from the global financial crisis should not be sought in excessive eurozone austerity or the excessive prudence of the European Central Bank. Rather, compared to the US, he argues that the excess debt created in the EU during the boom years has been much more difficult to work off. He acknowledges that European officials are right to promote structural reforms of EU countries’ labour and product markets, but advises that they should also focus on overhauling and accelerating bankruptcy procedures, so that losses can be recognised more quickly and over-indebted households can start afresh, rather than being shackled for years.

Daniel Gros is Director of CEPS. This Commentary was originally published by Project Syndicate, 21 July 2014 (http://www.project-syndicate.org/commentary/daniel-gros-attributes-america-s-edge-over-europe-to-its-faster-bankruptcy-procedures) and is reprinted here with the kind permission of Project Syndicate.