Europe is not Japan
Pessimism about the eurozone economy is widespread. Many commentators argue, usually casually, that the eurozone economy is sliding into a 'Japan scenario'. Unfortunately, what that is exactly is not well defined. Presumably, what is meant by the Japan scenario is a long period of deflation and no growth, due to the bursting of asset bubbles against the background of high debt . There is no denying that potential growth in the eurozone is low and that the economy's growth performance is likely to be very modest at best in the period ahead, but I still think that the situation in the eurozone is very different from what happened in Japan after the bursting of the asset bubbles over twenty years ago. In fact, looking at the data, perhaps Japan's economic performance hasn't been as bad as many make it out to be. So in a sense, even Japan may not be the Japan as some see it.