First the bad news: Trouble remains, fundamental flaws may doom the continent, and growth isn’t happening as fast as hoped. Business and consumer confidence appear strikingly low, according to figures released this week. But of course; there’s no reason sentiment should differ from the financial markets, or that those surveyed should have access to new information. Far from being a leading indicator, this is the wake from the latest eruption of the Eurozone crisis.
Instead of drowning under that wake, feeling helpless, this week I’m surfing it. Not just that—feeling so cavalier, I’m ghostriding it. Ghostriding the wake is akin to walking on water, but there’s a lot of good right now, and I’m a little more optimistic about the future of this continent I call home.
Some good news: Greek stocks are rising, and politicians are back at work after the summer break—hopefully relaying pipe, not patching leaks. Despite dire predictions of potential repercussions, Finland’s request for Greek collateral for any economic aid, which threatened to destabilize Europe again, is rather flexible.
Even better news: European banks have much greater liquidity right now than two years ago, making a repeat of this crisis unlikely. Meanwhile, European Central Bank President Jean Claude Trichet acknowledges that economically, things haven’t been this bad since World War II. Leaders finally understand the scale of this crisis.
The best news is that the world’s finest economists, including 17 Nobel Prize-winners, said at a German conference that they “believe the Eurozone will survive its crippling debt crisis.” Trusting economists is all I can do right now.
Edward Prescott, who shared the Nobel Prize for economics in 2004, says he’s “optimistic. Europe has to reform. They are going to sit down, agree and implement reforms. And then Europe will boom and overtake the United States.”
Credit: Gareth Courage