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AT THE World Economic Forum in Davos in January 2001, the mood was sombre. The dotcom bubble had burst spectacularly, the Nasdaq stockmarket had crashed, and the American economy was tipping into recession. Yet most continental Europeans were breezily optimistic. The long years of being lectured about their inadequacies by the Anglo-Saxons were over. Europe had wisely skipped the dotcom mania, and its new currency, the euro, was giving the continent a boost. Some Europeans even dreamed of taking over as the motor of the world economy. But it was not to be, as Europe promptly fell into a deeper recession even than America.

Seven years on, the parallels are uncanny. Continental Europe has sensibly avoided America's subprime follies, it is argued. Its banks are in better shape, average euro-area unemployment of 7.1% is the lowest in almost 20 years, the euro is resurgent and, as Joaquín Almunia, the engaging European economics commissioner, insists, there is no sign of a recession. The commission will trim its forecasts later this month, but euro-area growth is likely to stay close to 2% this year. It is true that the European Central Bank (ECB) in Frankfurt has, like America's Federal Reserve, flooded the financial system with liquidity in response to the credit crunch. But unlike the Fed, it has not so far felt the need to bring down interest rates.

Just as in 2001, however, the outlook for the euro area seems to be deteriorating a lot faster than the optimists had expected. After all, the main reason that the ECB has been reluctant to cut rates is not because growth is so robust but because inflation has picked up to 3.5%—the highest in the euro's nine-year existence. Troubles in the region's two biggest export markets—recession in America and slowdown in Britain—are starting to bite. Exports to Asia have been strong, especially from Germany, but in most countries nervous consumers remain reluctant to spend.

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ORIGINAL: aviinterra
I think the term 'free market' or 'free trade' should no longer be used so positively. A fair market with fair trade should replace this now outdated notion.

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ORIGINAL: NorthernGent

Interesting that, I was reading an article in The Independent about 15 minutes ago and the general theme was that the Euro is performing well, and is outperforming Sterling (which has been the most stable currency in the world over the past 10 years).

Mind you, The Independent is a pro-Europe newspaper.

I suppose all I'm saying is.....'two sides to every story.

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ORIGINAL: NorthernGent

Well, bear in mind that many of us on this side of the channel don't see ourselves as Europeans - we're English, Welsh, Scottish etc. So, an English source will give you an alternative view. Having said that, The Independent is pro-Europe....or pro-France to be exact.

In truth, I don't know enough about the Euro to give an informed opinion, so can't say really. 'Doesn't matter to me though; the Euro could be gold for all I care.

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ORIGINAL: popeye1250

NG, funny you mention that.
When I was in Ireland they didn't really consider themselves "Europeans" just "Irish."

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ORIGINAL: NorthernGent

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ORIGINAL: popeye1250

NG, funny you mention that.
When I was in Ireland they didn't really consider themselves "Europeans" just "Irish."

It's understandable really.

The US was founded on a common goal and with a common enemy.

Obviously, that's not the case for Europeans - they were our enemies and vice versa. The history is long-standing and the policy makers have got their work cut out to reverse it.

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ORIGINAL: kittinSol
I think if you ask Irish people from Eire or the occupied territory

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ORIGINAL: kittinSol

The interesting thing about Ireland is that it benefited immensely from European Union subsidies. Indeed, without them, there would be no "Irish Tiger".

Another interesting thing: south of the Northern Ireland border with the Republic, there is a MASSIVE trade in Euros. It's actually accepted as a currency in the north.

I think if you ask Irish people from Eire or the occupied territory, they'll tell you that they adore being part of Europe. Being an island hasn't been a deterrent, for sure.

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ORIGINAL: Politesub53

Occupied territory ? Last i heard it was a democracy. Nice of you to speak for all Irish people in the North.

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ORIGINAL: aviinterra

some economists have even proposed the radical notion that our system of currency might be forever altered or even be discontinued. A pound of carrots for that neck tie? 

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ORIGINAL: SugarMyChurro

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ORIGINAL: aviinterra
I think the term 'free market' or 'free trade' should no longer be used so positively. A fair market with fair trade should replace this now outdated notion.

In terms of keeing information small enough so that the masses can understand it, this is a hugely important point you have made up there.

And KittinSol's take The Economist jives with my own. The only flag to which they show allegiance is to the almighty investor class - at minimum the leisured upper middle-class with profit as their singular motive.

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ORIGINAL: JimNastics

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ORIGINAL: kittinSol
I think if you ask Irish people from Eire or the occupied territory

You'll upset 50% of N.Ireland by using such language. Why do it?