Rumblings in Europe’s Economy

According to the Economist, the crisis in Europe may not be over quite yet.

Sovereign-bond spreads (the extra interest compared with bonds issued by Germany, the safest credit) have drifted back up in a handful of other countries, notably Ireland and Portugal. Attempts to tackle budget deficits through public spending cuts and tax increases have offered some reassurance to bondholders, but have also held back GDP growth.

They note that there are a few bright spots.  For example, Germany has a lower unemployment rate now than when the crisis first hit “thanks in part to a short-time working scheme and flexible time arrangements in its manufacturing sector.”  (Wait a minute. . . .I thought we were the ones with the flexible labor market?)  The post provides an overview of potential trouble spots.  there is also a great interactive map that lets you compare European countries conditions in terms of currency, economic growth, debt, etc.

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