War in UkraineGo deeper

Europe Doubles Down on Big Government

Economists fear high inflation and rising interest rates will make it harder for the continent to spend its way out of this downturn

Government spending in France as a share of economic output is now the highest in decades, excluding the pandemic years of 2020 and 2021. Photo: GONZALO FUENTES/REUTERS

FRANKFURT—Europe’s answer to its latest economic crisis: even bigger government.

Faced with soaring inflation and an energy crisis caused by Russia’s attack on Ukraine, European politicians are adding hundreds of thousands of public-sector jobs, guaranteeing business loans, subsidizing energy bills and splurging on infrastructure, defense and key industries.

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