Nov 26, 2012

Who’s afraid of European economic collapse? Not us

Economies and Europe remain recession-hit, but markets are paying less attention. There's a growing confidence across the world that policy settings are now correct.

Glenn Dyer — <em>Crikey</em> business and media commentator

Glenn Dyer

Crikey business and media commentator

What a difference a year makes, with some help from the European Central Bank. It might be overconfidence, but a year after the third end-of-year crisis in the eurozone, the sense of impending doom and gloom has gone, replaced in some cases by very cautious optimism. That’s despite the eurozone economies and others, such as the UK and Scandinavia, slowing almost to a standstill or tumbling into recession for the second time in three years.

If the events of last week and the market reaction is any guide, the eurozone is losing its capacity to frighten the rest of the world. That’s despite the recession, Greece being on the verge of a third bailout, eurozone finance ministers not agreeing on a new deal for Greece (despite 11 hours of talks late last week, putting off a decision until tonight at the earliest), and the collapse of vital budget talks for the EU (after two days of very inconclusive talks).

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2 thoughts on “Who’s afraid of European economic collapse? Not us

  1. mark dunstan

    The Australian dollar is not strong. The major world currencies are just weak. Let’s not kid ourselves.

  2. Christopher Nagle

    If you recall, the Nikkei went as high as nearly 39,000 at the end of 1989. It now bounces between 7,500 and 8,500, The Japanese banks have been technically insolvent since that time and show no signs of recovering on their balance sheets. That is why we haven’t heard so much from Japan inc in recent times. Tokyo real estate was once worth an equivalent of the entire United States of America. Ho hum. How the mighty are fallen. The 2008 GFC has just done the same to the USA. And they won’t recover anymore than the Japanese did. It will just take a while for the reality to sink in.

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