Europe faces a quandary. The difficult fiscal straits most European nations face precludes “Keynesian” stimulus policies to spur demand. Yet austerity is a recipe for stagnation, even decline. But without austerity, budget deficits threaten the trust in financial institutions. ITIF president Rob Atkinson proposes five approaches to cope with this quandary and for Europe to maintain it's global competitiveness: embrace "innovation economics," embrace Schumpeter, embrace high productivity in all sectors, embrace work, and embrace an anti-mercantilist alliance with America.