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It's not a disaster. Europe is not at war, over all the people are rich and pensions are paid. But the euro zone economy is far from healthy. It is stuck in a state akin to suspended animation: alive but unable to do more than stay that way.
Disinflation is one sign. According to Reuters, economists expected an annual inflation rate of 1.6 per cent in April. The first estimate is at 1.2 per cent. There is not enough dynamism in the region's stronger economies to compensate for the downward pressure on prices and wages in Italy, Spain and the other countries in need of lower labour costs to become more competitive.
Nearly – flat prices are not only an effect of economic troubles. They make them worse. Without higher inflation to erode the real value of the region's debts and to keep more loans from going bad, the financial strains – right now the area's main economic brake – will stay severe.
High unemployment is another sign of ill health. Analysts were not surprised at Tuesday's announcement that 12.1 per cent of the zone's work force is without a job – up by 0.1 percentage points in a month and 1.1 percentage points in a year. Europe doesn't create jobs. The 24-per-cent rate of youth unemployment is particularly distressing.
In the long term, the jobs currently being shed and not being created in weak countries and sectors may lead to a healthier euro zone. Right now, though, shrinking payrolls are helping to keep GDP virtually flat and fiscal deficits uncomfortably high.
There are ways to make the euro zone economy more dynamic. But some of them – an immediate move to a single banking system with fiscal transfers, a major debt restructuring or a vast deficit-funded employment program – are too radical to be politically acceptable. Others – like structural reforms in labour markets, or investment in education – will take years to bear fruit.
Voters say they're unhappy. But suspended animation may be fairly comfortable for most people. It's likely to persist.