1. I think both arguements combined caused the high unemployments in Europe. For deficient aggregate demand, high government fundings and high interest rate may have been the cause. As for high natural rates, i think it is also an essential cause since the high government social benefits decreased the incentive to be employed and thus, the natural rate of unemployment is high. So both arguements combined caused the essential high natural unemployment rate.
2. During this time period, US was experience an extreme case of GDP growth with GDP growing much faster than employment rate. At that time, the industries must have been experiencing revolutions where technology and things as such updates with faster speed than ever, thus US was able to still maintain a low inflation rate at the time. What stopped this may very likely be the case of 911 or a natural reccession due to the nature of business cycles.
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