Europe Worries About a 1970s-Style Oil Shock

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... “The historical memory of the first oil shock is much stronger for Europeans than for Americans,” Daniel Yergin, the chairman of Cambridge Energy Research Associates, said. “For Americans, the memory is of gas lines. For Europeans, it was the end of their postwar economic miracle.”

He and other experts caution against overstating the comparison between 2008 and 1973. Europe, they say, is better equipped to absorb these kinds of shocks than it was 35 years ago — with a sturdy, shared currency, an independent central bank, and more flexible, open economies.

Still, with growth slowing at the same time that wages and prices rise, there are unsettling similarities.

“There is unrest among workers, who today, as in the 1970s, feel they have been shortchanged,” said Holger Schmieding, chief European economist at Bank of America in London. “They have to spend more money on fuel, so they have less to spend on other things, and they want to be compensated.”

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