Much of the answer is up to the center-left governments of the three biggest euro zone members, Germany, France and Italy, which are still struggling to introduce economic reforms in the face of tough opposition from inside their own ranks and from the wider public. If they cannot persuade voters of the need for change, they may be tempted, as elections loom, to take credit for the relatively good times and relax their efforts.
Some credit is due to governments, or at least to their predecessors.
By deciding to introduce the euro, European leaders obliged themselves to adopt multiyear programs to cut budget deficits and squeeze chronic inflation from their economies. There are plenty of signs that things are finally changing. Big progress has been made in privatization and deregulation, especially in telecommunications and electric power. Banking, financial services, retail distribution, airlines and trucking are also being liberalized and restructured, lifting the Continent's long-underperforming service sector. Many center-left governments, including those of France and Germany, are trying to reduce taxes.