Europe's leaders must recognize that the eurozone, as currently constituted, is larger than Europe's optimal currency area. Some member countries — certainly Greece, and probably Italy and Spain — need an independent monetary policy.
Prime Minister Shinzo Abe has unveiled the so-called third arrow of what has come to be known as Abenomics. It involves the removal of obstacles to growth for business, particularly the easing of regulatory barriers. Expect some officials to resist this initiative.
Perhaps if Asia's leaders viewed East Asia's rapid economic transformation, geopolitical dynamics and historical animosities like a recenlty arrived space alien, they would see what they need to do to halt the dangerous trends.
Since most major economies operate under a flexible exchange-rate regime, financial market concerns about capital flight from developing countries as the U.S. Fed exits its quantitative easing policy are largely unwarranted.
Give the first year of "Abenomics" an "E" for effort, as the "third arrow" of the plan — long-term growth strategy — cannot yet be fairly assessed. Hopefully bureaucratic resistance to deregulation will soften in the coming year.