Europe is in a panic because if the US and other traditional deficit countries reduce their deficits and surplus countries won't rebalance, Europe must become the new deficit country absorbing all surplus production; Europe should unilaterally control its external accounts like China has done, but the lack of geopolitical will to do this is driving a sense of crisis.
causalpending
Speaker
Michael PettisEvidence Quote
“Europe will be the big loser in the global rebalance...that's why in Europe you're getting such a sense of panic”
Source
Michael Pettis: China’s Consumption Crisis Is The World’s Crisis— The Monetary Matters NetworkCreated: 8/11/2026, 7:43:21 AM
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