eurozoneInvestors watched in horror as the eurozone's financial tensions spilled over to the political sphere in spring as Greece's debt crisis came to a head. The German and Greek press exchanged vicious shots, and riots in Athens turned deadly.

Pundits took to calling for an outright breakup of the eurozone. But with the region posting a sharper rebound than most had predicted, investors may want to take away another lesson.

Europe's Resilience Becomes More Evident

Sixteen countries sharing a currency can be a tough and highly politically charged process. But Europe's underlying economy -- which has been much less involved with financial gimmicks than its American counterpart -- tends to be more stable than it's generally given credit for.

As the political grandstanding subsides, that resilience is becoming more evident. On Thursday, Germany reported that industrial production surged ahead of expectations to hit 3.2% for June. The manufacturing powerhouse has now added jobs for 13 consecutive months and recouped nearly all the jobs lost during the financial crisis.

With employment security at its highest level in two years, German consumer confidence is soaring. Unions are pushing for higher pay amid the improving economy.

AIG Bailout Alone Bigger Than Greece's

The International Monetary Fund, meanwhile, credits Greece, with making "great progress" in the austerity measures it outlined. Budget deficits have been reduced by 45%, and the deficit this year will be brought down to 8.1%, from 13.6%.

Given the cushy arrangements for Greece's workers -- half the workforce is unionized, and retirement can sometimes come as early as 50 -- making big cuts is easier than it might seem. Greek unions organized major demonstrations to convey the consequences of too many concessions to their political leaders. But ultimately there was plenty to concede, too.

Greece's problem -- too many civil servants working at too easy a pace and retiring too early -- may also be much less damaging than what cratered the U.S. economy. It took $146 billion in loans to bail out Greece. By contrast, the tanking insurance giant AIG (AIG) alone required a bailout of $182 billion to prevent an even bigger fallout for the broader economy than what had already been wreaked.

Europe Keeps Chugging Along

As Germany shines and Greece heals, European policymakers are wisely pushing for austerity measures. But faced with soaring unemployment and a weak social safety net, American policymakers are pondering additional maneuvers like quantitative easing to help boost growth.

In good times, the U.S. economy is lauded for its dynamism while Europe is ridiculed for its high taxes and sluggish growth. But America is still paying for its financial wizardry, and investors should take note of the Continent's ability to keep on chugging.

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The major european countries also did not spend as much on stimulus as US. Maybe if we followed we would have less future debt? To also put in perspective, their GDP percent growth is not much greater than ours,and per country, much smaller base. By the way, Congress develops and submits budgets that presidents sign. Look at last 4 years under dumb and dumber before you start looking at bush alone.

August 07 2010 at 5:59 AM Report abuse rate up rate down Reply
bdyftns must of forgot about Bush's stimulus packages. Obama was given an economic avalanche that hadn't begun to reach bottom yet. The biggest problem this country is facing is people like you/congress that want to point fingers at one party or the other instead of trying to work together for the good of the Nation instead of spending so much time trying to get their own elected. This has been going on with both Republicans and Democrates.
'We have found the enemy and they are us.'

August 06 2010 at 11:41 PM Report abuse +1 rate up rate down Reply

Yeah, when our economy started to nose-dive, as it does in cycles, we panicked too much.... instead of riding it out like we have done in the past. Now we are in deeper debt because of Obama's "stimulus" packages.

August 06 2010 at 11:22 PM Report abuse rate up rate down Reply

Business should only get tax breaks if they create jobs right here in the US, why should americans subsidize them sending our jobs overseas?

August 06 2010 at 1:52 PM Report abuse +2 rate up rate down Reply
5 replies to teetse's comment

We should all go on stike and shut it down to make a point. Illegal immigration helps them help themselves to our resources.

August 06 2010 at 12:10 PM Report abuse +2 rate up rate down Reply
1 reply to ajgorm's comment

Yes, go on Stike and start by not posting on Daily Finance... That will show us all how much you matter

August 06 2010 at 12:16 PM Report abuse -5 rate up rate down Reply

Resilience lessons from the EU for Americans . Yeah right we are their life line . As a nation we could do much better closing our borders pulling out of the United Nations , claim neutrality and bankruptcy and put the check in the mail. We would become better and stronger and not slaves to the EU.

August 06 2010 at 12:08 PM Report abuse -2 rate up rate down Reply

yep.... IRE is up 30% in the last 2 weeks and headed for $8 a share very soon..

August 06 2010 at 12:04 PM Report abuse +1 rate up rate down Reply


August 06 2010 at 12:03 PM Report abuse rate up rate down Reply