Europe Not in Sustainable Expansion: Magnus

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Aug. 22 (Bloomberg) -- George Magnus, senior independent economic advisor at UBS, examines the gain in Euro Zone manufacturing PMI in August and the strength of growth in the European economy. He speaks on Bloomberg Television's "The Pulse."

Let's get a little bit more on the bmi data.

Let's bring in george magnus.

He would join us for the next half an hour.

What is your take?

We got so excited about exiting recession.

There is a couple of things, one is the dominance of germany.

It is a long-standing story between northern and southern europe.

The second is, if you remember, the pmi turned up above 50 for the first time since january 2012. we are coming from extremely low basis.

The rise in standards is cyclical.

Clearly, it is to be welcomed . we would rather go up and then down.

I think that you just suggested that it does not mean that -- in my view at least -- that we have crossed the rubicon towards a sustainable expansion.

I'm not saying this is going to peter out, by the way.

Over the last three years, if there is one thing that was clear, it is that it is easy for politicians to be complacent.

They say that they have been doing a good job and pat themselves on the back.

We have to make sure that the reforms go through.

Is this a hindrance?

We're getting a little bit of a recovery.

Well, a year ago we could've had a different discussion about this.

It is no different than what we already know, which is that the spaniards in the portuguese and the italians and the greeks , everybody, they are tiring of austerity and there is a political problem with persistent and relentless austerity.

So, i suppose , in some sense, at the margin, better economic numbers for the eurozone, as a whole, detract from the intensity of the reform program which, we all know, needs to take place.

Where do we need to see these indices get to?

We have real growth and real employment.

That the 2009, these numbers were in the 60s. it does not mean that we are getting a real cyclical expansion.

You are not going to get employment in europe ticking up.

Levels of employment, compared to 2008, are relatively elevated .

This text has been automatically generated. It may not be 100% accurate.


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