CHICAGO--(BUSINESS WIRE)--In this edition of Themes on Global Markets, our deputy chief economist reduces weeks of meetings and conferences with central bankers, industry leaders and fellow economists across Europe to just one word: “delusional.” That is what Adolfo Laurenti calls the general view among Europeans, when he briefs our chief economist, Diane Swonk, on his fact-finding mission. (see video).
Just listen (or read) as Laurenti repeats what he has been told: “’Europe has no labor mobility, no flexibility in the economy, lots of rigidities, and no central fiscal authority: it is a political experiment, and it has gone relatively well so far, all things considered.’ So mused a French colleague.”
On the other hand (economists are sometimes accused by politicians of using at least two hands on which to sum up their conclusions), Laurenti reports that, "’No pain, no gain’ is the way more than one of my colleagues summed up the German view… (but) Germany is understandably concerned that any mutualization of European debt will result in a forced transfer of resources from Berlin.”
The ultimate conclusion reached, is that “It is reasonable to expect that the current lull will last a little longer; and, a new bout of financial and fiscal stress will eventually bring us to reconsider an outlook that is improving, but that is far from reassuring. A non-escalating, crawling pace for the European crisis is our baseline scenario.”
For details and data on the Eurozone economy, one year after the European Central Bank President Mario Draghi promised, “whatever it takes,” read the latest Themes on the Global Markets newsletter, or watch a video. The October 2013 issue of Themes on the Global Markets, as well as archived issues, can be found at mesirowfinancial.com.
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