The View from Europe

Things in Europe are looking pretty good these days. From this week's Economist:

Pleasant surprises continue to emanate from the euro area—notably from Germany, its biggest economy. This week Ifo, a Munich research institute, unveiled another strong reading for its monthly business-sentiment index. The country's five main economics institutes, including Ifo, have raised their forecast of GDP growth this year to 2.4%; last autumn they expected a percentage point less. French presidential candidates apart, the zone's politicians have been unusually accepting both of the currency's rise and of one of its causes: the European Central Bank's clear intention to raise interest rates further. The ECB is likely to take another step, from 3.75% to 4%, in June.

...The zone's fastest-growing markets are to the east. Julian Callow, of Barclays Capital, estimates that exports to the European Union's new and would-be members (including Turkey) and Russia went up at an annual rate of 20% in the second half of last year. They are now 19% of the total, up from 13% in 1999. Exports to Asia have also been growing fast.

The European and American economies have been a couple of years out of sync with each other for some time. That makes for good timing - it's nice to see growth in Europe getting stronger just as we're having doubts about the US economy. US exports, and the US current account balance, should benefit.