European Economy?

Question

Is European economy recovering from the bad experiences of the 1990's?

And can you forecast the future of European economy? Will it be good, or pass the prosperity to the U.S. and Asia?

Answer 1

First of all, there is no reason for Europe, U.S., and Asia not to prosper at the same time. Prosperity is not a zero-sum game.

The problem with European economy is that there is no such thing as European economy. Spain in currently the case in point; it badly needs a monetary contraction, which the European Central Bank cannot provide without providing it to other euro countries. Europe needs to realize that while the common market was the best thing to ever happen to it, bar none, the euro was an expensive mistake.

Answer 2

I think most global economies are currently leaving the 1990s behind.


That said, most EU nations have some very strict labor laws that tend to keep capital shying away.

Europe will still continue to have growth, but they'll also have high unemployment and their growth will lag behind as capital flows to the US and Asia.

Many Europeans contend that high prices, slow growth, low income, and high unemployment are acceptable trade-offs for a social "safety net".

Having lived in the EU for two years, I hope the opposite view, so consider my post slightly biased.

Edit to comment on the Euro currency: I agree with the prior poster, the Euro is a tough idea because you have over a dozen different countries trying to pursue their own policies without control over a Central Bank.

There's a very good paper out on how two seperate currencies could have helped the farming crises in the US in the late 1880s.

Answer 3

well, currently european economy is doing well with comparing to what its used to be in 1990's. it has shown a steady growth over the years. the euro is still strong against the amaerican dollar.

but one must not forget the accelarating growth in asia. especially with the asian tigers such as singapore,malaysia,thailand and even india. these guys are growing very fast. with comparing to european countries. cheep labour ,land and other factors of production triggers the growth. {eg. China)

Answer 4

it has already passed the prosperity of the u.s. and japan. european economy will remain strong and solid for the next five years.