The European economy has been a trainwreck for a long time, but there have been varying stages of it.

From 2007 through 2010 or so, the European economy basically went through the same trajectory as the US.

There was a violent downturn during the financial crisis, and then an upturn.

But thanks to the European sovereign debt crisis, the upturn was cut short.

2011 and 2012 were devoted to solving the acute issue of European sovereign debt crisis, an issue that for now has largely gone away, via the ECB's promise of backstopping governments, so long as they agreed to austerity measures.

But everyone predicted that this austerity would be devastating for growth, and now we see that playing out in 2013 in a wicked way.

While the German economy is strong, the rest of Europe just stinks, as today's PMI numbers show quite nicely.

This chart comparing French and German manufacturing output tells quite a story. While Germany is benefiting from strong exports, the French economy is mired in a horrible slump.

The bad news doesn't stop there.

Just out today, some fresh bad data on French car sales.

Meanwhile, no va va voom in French Feb car sales. -19.9% for Citroen -8, 5 Peugeot and -19.3 Renault y/y — kit juckes (@kitjuckes) March 1, 2013

Oh, and look, here's the tragedy of Italian unemployment.

#Italy's unemployment rate rises to 11.7% from 11.2%. It's the highest since at least 1992. For those between 15 and 24 it's 38.7% — Michael McKee (@mckonomy) March 1, 2013

A very severe leg down is taking hold, and there's nothing anybody is doing about it.

The ECB might at some point cut rates again, which should benefit marginally. But the lack of domestic demand remains brutal.

And now politics is getting worse, as the electoral crisis in Italy shows.

The question is: Will anyone address it?

Right now most of the rhetoric is about the importance of sticking with various austerity commitments. If nobody has the guts to change direction, there will be more Italies in the future.

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