Mixed messages from economic data are nothing new. Anyone looking for a steer from the most recent run of numbers will be forgiven for being confused.
The Bundesbank said earlier this week that the German economy stagnated in the most recent quarter; French data indicates possible economic contraction and yesterday's euro area purchasing manager surveys were, for some smaller economies, at a seven-year high.
Intriguingly, Europe’s core is performing worse than the periphery. The employment indicators are consistent with very modest job creation – a welcome change from the outright job shedding that we observed this time last year but there is little to suggest that unemployment is likely to fall, across the common currency area as a whole, by very much for the foreseeable future.
All of this is consistent with an economy merely bouncing along the bottom.
The news from Europe’s periphery is, of course, particularly welcome. Policymakers in Brussels and Frankfurt claim that everything is going to plan; the threatened break-up of the euro zone is becoming a distant memory and, with a little more patience, everything will be okay as economies very gradually heal.
Critics grumble that this is just not good enough, a different set of policies could have hastened recovery, mitigating the calamitous effects of persistently high unemployment.
It is in the nature of economic experiments that we never get to find out what might have happened under different policy scenarios: the debates just seem to go on forever.
At the very least, to express satisfaction with just bouncing along the bottom is revealing of a desperately disappointing lack of ambition. It also leaves us vulnerable to external shocks.
War in the Middle East and the tragedy of Ukraine may already be having a negative effect on some economies although, for now, the economic consequences seem to be largely confined to the regions concerned. That, of course, is not guaranteed to last forever.
Vulnerability worries economists a lot. Evidently, it isn't a matter of concern to politicians. Domestically, the reason why bodies like the Fiscal Advisory Council keep banging on about the next budget's €2 billion adjustment is not because of austerity fetishism. Cynical observers of our fiscal incontinence see us backing off carefully laid plans at the first opportunity. All of which leaves us exposed – there is nothing held in reserve should "bouncing along the bottom" turn into anything worse.
More generally, the lack of appetite to bolster Europe's frail recovery is astonishing. It is not as if ideas have been thin on the ground: even in Germany, there have been one or two intriguing suggestions for giving the economy a helping hand.
Earlier this month the respected Berlin-based German Institute for Economic Research published proposals for a common investment fund to boost capital spending. They argue that €180 billion of annual investment has gone missing in Europe and that the public sector – at the pan-European level – is best placed to step into the gap.
Few will be surprised by the reactio
n. Such proposals are as popular as earlier ideas about the issuance of euro-area bonds. The German body politic simply won’t even consider these suggestions. Perhaps rightly, they are terrified of giving certain fiscally challenged governments any leeway whatsoever. Trust, understandably, is in short supply.
But it is surely not beyond the wit of Brussels to devise policies that boost regional capital spending while keeping a lid on the more fiscally irresponsible ambitions of local politicians. Perhaps all of this is in our federal European future.
The economic paradox of our age is our refusal to avail of the abundant supply of ultra-cheap funding for investment. Rarely, if ever, has it been cheaper to improve our economic infrastructure: roads, ports, broadband, education and everything else that is crumbling.
Just why we refused to invest will keep economic historians busy, and bemused, for years to come.
