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What Obama Can Learn From “Old Europe”:

The inauguration of the 44th president is starting to look like the most dramatic debut since the Beatles arrived in New York. But soon it will be time for Team Obama to produce results. For three of the president-elect’s top priorities – energy and climate change, health care, and jumpstarting the economy – President Obama would do well to look toward “old Europe” for guidance.

Europe recently displayed its global leadership by enacting its 20-20-20 Plan: agreeing to cut human-produced carbon emissions that contribute to global warming by at least 20 percent by 2020. They will do this by ramping up renewable energy technologies to 20 percent of its energy usage, and by enacting the world’s most ambitious carbon-trading program. And the richest European nations have agreed to do more toward combating climate change than the poorer nations, an important principle for any global climate agreement.

In a friendly challenge to the president-elect, European Union Commission President Jose Manuel Barroso said,Our message to our global partners is: “‘Yes, you can’ especially to our American partners.”

The Obama administration also should learn from how Europe has enacted universal health coverage and quality care at an affordable price. European nations are rated by the World Health Organization as having the best health care systems in the world, spending on average far less than the United States for better results. France has the top-rated health care system, while the U.S. is ranked 37th – just ahead of Cuba and Slovenia.

Yet contrary to stereotype, France, Germany, and other countries do not use government-run, “socialized medicine.” Unlike single-payer Britain or Sweden, they have figured out a third way, a hybrid with private insurance companies, short waiting lists for treatment, and individual choice of doctors.

This third way hybrid is based on the principle of “shared responsibility” between workers, employers, and the government, all contributing their fair share to guarantee universal coverage. Participation for individuals is mandatory, not optional, just like you must have a driver’s license to drive.

These health care plans are similar to what Massachusetts recently enacted, but with two significant differences. In France and Germany, the private insurance companies are nonprofits. Doctors and nurses are paid well, but you don’t have corporate health care CEOs making hundreds of millions of dollars. The profit motive mostly has been wrung out of the system.

The second key difference is in the area of cost controls. In France and Germany, fees for services are negotiated between the health care professionals, the government, patient-consumer representatives, and the private nonprofit insurance companies. Like in our Medicare system, together they establish a national agreement for treatment procedures, fee structures, and rate ceilings that prevent costs from spiraling out of control. This is good for European businesses too, because it doesn’t expose them to the soaring health care costs that have plagued American businesses.

The Obama administration also could take notes from how the Europeans are jumpstarting their economies. Europe sometimes is criticized for its lack of unity, but at times that multi-headed hydra allows each nation to act as a laboratory for the others, learning from each other’s successes and shortcomings.

For example, during the recent massive financial meltdown, as markets reeled and the U.S. announced a $700 billion bailout plan, each European country initially tried its own bailout formula. Within two weeks the British strategy under Prime Minister Gordon Brown emerged as the most effective. The rest of Europe quickly adopted it, as did the U.S. eventually since the American plan had been so ineffective.

The European plan also includes stricter controls over the bailout money, and equity in the banks, reductions in dividends and concessions from the bankers, all of which were lacking from the U.S. bailout. And Europe already has enacted a fiscal stimulus worth hundreds of billions of dollars at the continental and national levels, while Americans still await Obama’s plan.

With a half billion people, Europe is the largest, wealthiest trading bloc in the world, producing nearly a third of the world’s economy – as large as the U.S. and China combined. While its critics have derided Europe as a land of “creeping socialism,” in fact Europe has more Fortune 500 companies than the U.S., China, or Japan.

Like the U.S., Europe is fighting to pacify the rising economic floodwaters. But something about Europe and its “social capitalism” seems particularly well-suited to this make-or-break century challenged by a worldwide economic slump, global warming and new geopolitical tensions. Team Obama would do well to take notes.

Steven Hill is director of the Political Reform Program at the New America Foundation. His book “Europe Rising” will be published by the University of California Press in 2009.

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