The no vote on the EU Constitution by the French, then the Dutch. The fall, or seeming fall, of the Schröder government in Germany. Is Europe melting down? My friend V in Berlin says, "Relax--it's just democracy." Yet there is alarmist talk now that the EU might break up, or the euro be withdrawn.

To hear the violent rhetoric from the business elites in Frankfurt and London, Europe's a shambles. In fact, things are pretty nice. Yes, French unemployment is at a very distressing 10 percent. But in Europe, while it can be much harder to get a job, it is much harder to lose one, too. In a two-year period, your chance of being jobless, laid off, is probably greater in America than it would be in France, and certainly greater than in many European countries. We may have lower unemployment at any given point, but it is a kind of "rolling" unemployment, shorter but still heart-stopping, that over time will affect a larger proportion of us. Would French workers want "lower" US-style unemployment, which means a greater likelihood of layoffs, firings, drop-offs into poverty for a half-year at a time every other year? I think not.

Indeed, except for Germany (dragged down by the cost of unification), Europe or the "euro-zone" part of it has been doing at least as well as the United States in the past ten years. This is among the stunning findings of a January 2004 Goldman Sachs study, Euroland's Secret Success Story. As set out in the study, it's true of productivity growth--a bit under 2 percent a year in both, if adjusted for the business cycle. It's true for growth in GDP per capita (2.1 percent). And, yes, it's true even for investors: In Europe you get the same return on capital. It's true despite Europe's higher nominal unemployment and shorter workweek. Indeed, if one could put a cash value on this extra leisure, one could argue the standard of living is going up faster there.

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