Europe must prove euro worth rational exuberance

Posted: Tuesday, July 23, 2002

Federal Reserve Chairman Alan Greenspan is not as worried about the strength of the euro against the dollar as he is about how he described as an ''irrational exuberance,'' the Wall Street boom at the end of the 1990s. That's because he now has to suggest that it is irrational to be pessimistic about the current slump.

While Greenspan declares that the U.S. stock market will grow, Wall Street's agony seems to contradict him. Few people still believe in the financial reports compiled by Wall Street listed companies. ...

While Greenspan and U.S. President George W. Bush risk looking like a couple of comedians with their positive declarations, the stock market keeps dropping.

Europe's situation, however, is not less delicate. European Commission President Romano Prodi expresses delight with the euro's surging value, but the stock markets are still not showing any benefit and forecasts for European stock markets for 2003 are negative.

Europe, in the wake of the strong euro, now has to prove that its exuberance is rational. Perhaps by showing that public investment counts more than foreign and that income redistribution counts more than high profits. That's because the world of frenzied enrichment on the other side of the Atlantic doesn't seem to work.

-- Corriere della Sera, Milan, Italy

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