Europe is rarely associated with the dynamic thrust of modern free labor markets or the fresh energy of emerging entrepreneurial vigor. This explains why growth in Western Europe’s largest nations, particularly Germany and France, lagged behind the US for so many years. Major urban redevelopment projects are being completed in London’s South Bank district, in Dublin’s Docklands financial center, in Rotterdam, Copenhagen, Brussels, Athens, NaplesLille.

Germany has spent upwards of $1.54 trillion rebuilding Berlin and the East. Just last week, the US Commerce Department reported that US GDP growth in the first quarter plunged to an anemic 0.6%, the worst showing in over four years. The second quarter seems to be off to a slightly better start. In comparison, Germany’s first quarter growth has improved to an annual pace of 3.6%, Spain is up to 4.1%, Greece is at 4.6%, Sweden is running at 4.7%, the Czech Republic is trotting along at 5.8%, and Poland’s at the annual pace of 6.4%.

This year, the Eurozone will likely outperform the US economy for the first time in decades. Plus, the euro has reached an all-time historic high against the US dollar. And in the first five years of the new millennium, while the US slowed down to 2.4%, Europe slowed even more to just 1.5%. Many of the countries showing the strongest growth are in Eastern Europe including Hungary, Poland, the Czech Republic, even Serbia.

Russia soared 7.9% in the first quarter of 2007. After decades of communist rule, the newly liberated states are leading the pack in making up for lost time building badly needed roads, hospitals, factories, schools, and Internet superhighways. From 1990 to 2000, Europe was lagging with an average growth of 2.2%, compared to 3.3% in the US. That’s changing, and much more quickly than most economists dreamed possible. What are the forces driving the change?

Tax cuts
The overall tax rate of European Union countries is down to a historic low of 26%, while in the US, when you combine federal and local taxes, the burden is close to 40% rates. Reduced Regulation: More global businesses are moving their operations and their underwriting to Europe and elsewhere. So far this year, 14 of the world’s 15 biggest IPOs were listed outside of the US. And IPOs in EuropeUnited States $37.8 billion compared to just $21.2 billion. and have raised nearly double the money of IPOs in the United States $37.8 billion compared to just $21.2 billion.

Newer trading partners
Last year, the European Union launched its „Global Europe” initiative to pursue bilateral free trade agreements with major emerging economies. The goal is to secure new profitable markets for its companies. European Union nations have slashed their tariffs and other protectionist trade barriers. They’ve aggressively pursued new business with Russia, China and Latin America. And they’ve changed the face of world trade. Germany has surpassed the US as the world’s number one exporting nation and has done all this with a giant trade surplus. But it’s not just in Germany. Throughout Europe, the US is becoming progressively less relevant to their economic success.

Falling unemployment
European businesses have traditionally paid a hefty premium for labor. And labor also paid a hefty price in the form of chronic high unemployment. Over all, the European Union has seen its unemployment rate decline from an average of 8.0% in 2004 to 6.9% today. And, according to a Merrill Lynch survey of 201 money managers in May, the appetite for European stocks has reached an all-time record high. And with new, easy access to European investments, individuals are following suit.

Average annual returns
29.3% over the past three years; 18.5% over the past five. Since January 2006, it’s up by over 55%, nearly double the rise in the Dow during the same period. „I don’t recommend putting all of your money in overseas investments. But with the US lagging and the dollar falling, if you don’t allocate at least some, I think you could be making a big mistake,” says Dr. Weiss. (prweb.com)