Before I started this blog, I was busy telling my colleagues and state and local government officials that Europe would see a larger, longer crisis. European banks were just as deep into the credit crisis as the US and European monetary policy was not nearly aggressive enough.

Now it seems that Europe is returning to growth faster than the US. While it is true that the slump overall in Europe is still larger, I did not expect this. At this point I am also not quite sure what to make of it.

Part of it could be snap back from the very sharp contraction. Part of it could be automatic stabilizers from a larger welfare state. Part of it could be aggressive implementation of stimulus packages.

It could be, however, that my basic read on the situation was wrong.