After 15 years of economic upheavals, from the European debt crisis to the Covid-19 pandemic and Russia’s invasion of Ukraine, the European economy appears set to underperform in 2024. But are appearances deceiving?

Germany, Europe’s largest economy, has been hit particularly hard by the surge in energy prices and China’s ongoing slowdown. Moreover, Germany has exacerbated its own economic woes by diluting or abandoning many of former Chancellor Gerhard Schröder’s market-oriented reforms which had previously underpinned its robust GDP growth. Although leading German forecasters ...