Northern Europe doing fine

Note that both Germany and Sweden are under conservative leadership

NORTHERN European countries, lead by Sweden, are providing a glimmer of hope to a continent savaged by a sovereign debt crisis.

In late November, as euro-zone leaders struggled to quell Dublin's debt maelstrom, something odd was happening farther north. In Stockholm, government statisticians reported the strongest economic growth in Sweden's modern history.

Having been torpedoed along with the rest of the West in the banking bust, the Nordic country was now riding on a high, with gross domestic product rising almost 7 per cent thanks to a potent rebound in domestic spending and strong exports.

Sweden was not alone. Germany, Europe's dominant economy, enjoyed its most powerful economic expansion since the country's reunification in 1990, borne aloft not only by its hyper-competitive manufacturers but by an acceleration in consumer spending and rising employment.

And further east, Poland was showing signs of shrugging off its own credit crunch hangover to report a growth spurt, with gross domestic product rising by an annual 4.7 per cent in July to September.

The figures defy the perception of a Europe that is drifting into economic somnolence, the only thrills coming from fiscal car wrecks in the single currency area.

Some of the region's key economies are enjoying remarkable success, in part thanks to their exporters' ability to cash in on demand from fast-growing emerging markets, but also because of strengthening household spending and confidence at home.

"It is a great divide; we have the best and worst in the world in this region," said Christopher Potts, head of economics and strategy at CA Cheuvreux. "We have countries in serious, serious difficulties, but we have other parts of Europe that are enjoying a period of prosperity."


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