Several years ago, at the height of the thermonuclear phase of the Global Financial Crisis (compared to the slow radiation death we’re experiencing at the moment) a colleague of mine poured scorn on the US as an economy and looked towards the mighty powerhouse of Europe as an example of How To Do Things Right.
So it turns out he was wrong.
Some of the individual underlying economies are in good shape. There is much to be said for Germany’s productivity levels, technology, social safety nets, strong exports, apprenticeship system and more. The house market / debt problems of the south are less obviously good.
The real problem is with the Euro. A single currency in an area more inclusive than theory would suggest as ideal for a common monetary area AND without fiscal union is proving to be very unstable.
I’m not quite ready to make a prediction that the Euro won’t survive, but I’m looking to that as a real possibility. Just take a look at the Germany-Italy spreads to get an idea of how nervous the market is.