Hooray for Europe?

CAMBRIDGE: Europe's economy is clearly on the upswing: growth forecasts run at 3% and even higher rates are quite possible. The world economy looks better and even inside Europe, demand is rising. Plenty of reason, therefore, to be optimistic: say good-bye to global crisis, forget the risk of a stagnant Europe. But there is even more good news, promising perhaps to turn the current upswing into something more durable. For this, thank the often abused Euro, for it has anchored the once profligate nations of the Mediterranean in German-style monetary discipline.

But the most interesting new fact in European economics is surely the belief, hope, and perhaps reality, of economic restructuring on a variety of fronts. Governments have undertaken a few privatizations with radical consequences for competition. Take the case of Deutsche Telecom and the price wars it has incited. Young people are increasingly recognizing the dramatic importance of modern information technology and are finding their way both to the Internet and the Neumarkt, Germany's bid to inspire American-style venture capitalists.

Big companies, too, are in the game. Europe is abuzz with mergers not only to take advantage of Europe's broader economic space but also to confront tough competition in world markets. In sum, the old Continent is hot. No one can say how deep the changes will go, nor how fast they will shift Europe into the fast lane.

No day passes without major headlines of big mergers in Europe; Germany is ablaze as its mammoth corporations are performing mating rites. In France big strategic plays are underway in banks and fashion; Italy is seeing its major players position themselves on a European and world scale. In smaller countries, too, appropriately downsized in terms of scope and excitement, a lot is happening also. Just what does all this mean for European growth and prosperity? Could it be that despite all the gripes about the American model, a little imitation of the American success story is now underway in Europe?