The Euro Zone Has Little to Smile About

by Irwin Stelzer

Wall Street Journal
May 2, 2011

"Don't worry. Be happy. Ain't got no cash... but don't worry be happy... Put a smile on your face." Bobby McFerrin's pop classic is the new theme song of the euro-zone policy makers. They point to several developments to support this cheeriness.

European stock markets finished April with a flourish. The Stoxx 600 index was up 2.9%, registering the fourth increase in the past five months; in Frankfurt the DAX 30 jumped 6.7% to close at its highest level since January 2008; in Paris the CAC 40 closed April up 3%; London was up 2.7%.

Even better, the European Central Bank will be in safe hands. The powers-that-be in euroland have decided to toss stereotypes of Italians to the wind, overlook his former employment by Goldman Sachs and name Mario Draghi to succeed Jean-Claude Trichet to head the ECB. Mr. Draghi has the respect of markets as a sensible banker and a man who tells the truth, as that term is understood by central bankers.

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