How to Build on Europe’s Economic Recovery

After years of crisis management, heightened self-doubt and even existential threats, Europe is in a much better place. Economic growth is picking up, political uncertainty has diminished, and despite (if not partially because of) Brexit, the vision of an “ever-closer” regional union is energizing some new constructive thinking in core countries. Translating this into sustainable prosperity, however, is far from automatic, and that pivot will be problematic without progress in four key areas.

The latest set of robust high-frequency numbers shows that Europe’s economy is growing at a much healthier 2 percent to 2.5 percent annual pace, with many more of its member states sharing in the growing expansion. Although youth joblessness remains an acute problem in several economies, the overall unemployment rate is coming down. And, with ample liquidity, European financial markets have been performing well, both in absolute terms and relative to others.