Current forecasts for Europe are currently grounded on a compromise between two alternative hypothesis, which I will describe in a stylised way. According to the first which may be called the big economy assumption, the European economy not being poisoned by structural desequilibria – the huge private sector deficit (about 5% of GDP) which characterises the American economy as a consequence of past overinvestment – should soon rebound in such a way that the prospect for 2002, and in a greater extent for 2003, will be rather bright. After all, one of the benefit rightly expected from the creation of the euro is that it transforms a collection of small and medium sized economies into one big economy arithmetically less open to trade and enjoying thus a greater degree of autonomy (...).
