Trying to return to those levels of activity may bring about financial conditions that could reinflate the bubble or turn it into a public debt bubble. This diversity of views may partly reflect differences in the underlying positions of the economies.
There is no doubt that the potential for US growth is higher than Europe’s, if only because of the stronger demographics and greater market flexibility. Several European countries, where growth was stronger before the crisis, have shown a loss of competitiveness and will have to profoundly reform their markets in order to grow again.