Despite some recent apparent signs of improvement, in the past two years we've had very negative economic news from Europe, particularly from countries such as Spain, Ireland, Greece, Cyprus, Italy, and Portugal. High unemployment, failed banks, fiscal insolvency, and a growing distrust of markets are just a few of the difficulties.
I was in the audience exactly a year ago when Mario Draghi, the well-respected president of the European Central Bank (ECB), made his now-famous "whatever it takes" remarks. Twelve months later, this stands out as the boldest and most successful initiative in the history of modern central banking. Yet the durability of the benefits is undermined by Europe's frustratingly slow progress in getting to grips with its growth and employment deficits. In celebrating the one-year anniversary, the West would be well advised to also think in terms of foregone opportunities. And we should constantly remember the millions of unemployed, the alarmingly high joblessness among the young, the struggles that too many face in securing their families wellbeing, and the growing number of retirees that are legitimately worried about their pensions.
As they scramble to sort out the mess in Cyprus, European officials would be well advised to constantly remind themselves of a reality that I suspect extends across the continent: Despite all the happy talk about smaller deficits and lower sovereign credit spreads, citizens are yet to feel any notable improvement in their actual standard of living and in their prospects. Day in and day out, this situation undermines the population's confidence in the timely responsiveness of their elected representatives, the political system and traditional political parties. The longer this persists, the harder it will be to pivot to the type of policy reforms needed to decisively avoid more years of economic difficulties.