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 Pettis

Evidence 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 CrisisThe Monetary Matters Network
Created: 8/11/2026, 7:43:21 AM

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