Euro Illusions Force Weaker Nations Into High Unemployment

Europe’s economic prospects are picking up, according to the European Commission. Growth is slowly gaining momentum, say the forecasters in Brussels, and “the conditions for sustained recovery in the medium term are also improving.” In a Bloomberg Markets poll, 83 percent of investors say they believe the euro area’s economies are either stable or getting stronger. The crisis appears to be over. Supposing that’s all true, is it really good news?

The answer isn’t obvious. Granted, sluggish growth is better than no growth. Output this year is expected to be just 1.2 percent higher than in 2013, but after a prolonged contraction, any recovery is welcome. It’s encouraging, too, that the EU has avoided the most frightening meltdown scenarios. In 2011, when the crisis was at its worst, many dreaded an outright collapse of the euro currency system. That would have been a calamity, causing an even worse recession. Thank heaven it didn’t happen.