Europe's Big Test

Can its leaders continue pushing reform to keep growth on track?

During much of the last decade, the view from the World Economic Forum in Davos, Switzerland, has been remarkably unvarying. It has looked something like this: In the foreground, a geriatric, somewhat insecure Europe groped its way toward more and more extensive economic integration. Further to the east lay the vast and messy ruins of postcommunist Russia. Asian tigers like South Korea and Thailand, once the 1990s' hot investment tickets, had imploded by 1998. Japan seemed to reel from crisis to crisis, unable to recover from the bursting of its economic bubble at the end of the 1980s, and the China market was more of a promise than a reality. Towering over the entire landscape was the U.S.

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