A It would be very easy to write off Europe as dead, especially given every economic, political, social and demographic trend that's been happening there . . . not to mention one million French people taking to the streets to protest one little labour reform . . . but Europe isn't done for, and it won't be, either.

Without doubt, Europe has been treading water for the past 10 years. As the rest of the world has rushed to globalise and become more competitive, Europe has just kept its head above the waves of change.

We don't mean all of Europe, of course. Two decades ago, the United Kingdom faced the reality of the emerging global marketplace and liberalised its economy to stay competitive. Several countries in eastern Europe, such as Hungary and Slovakia, have thrown off the shackles of Communism with effective pro-business reforms.

But the promising economic news coming out of these countries is dwarfed by the disturbing news from France, Germany and Italy. With their aversion to capital investment and risk-taking, the three pillars of Old Europe are practically paralysed by the arterial sclerosis of their welfare-state economies.

Consider a few labour statistics. Over the past 35 years, according to Joel Kotkin of the New America Foundation, the US economy has created 57 million new jobs. With a combined GDP about the same size as that of the US, Europe has created just four million during the same period. Meanwhile, the European unemployment rate hovers around 10%, double that of the US.

Nor is Europe positioned to reap the gains of the growing science and technology sectors. R&D spending per capita in France, Germany and Italy, for instance, is about half that of the US. Demographic statistics are similarly bleak. France, Germany and Italy all have shrinking populations that, naturally, are also ageing.

Perhaps most worrying, the continent seems to be suffering from a collective bad mood. Asked, "How satisfied are you with your life?" by a Harris Interactive poll, around 18% of Europeans (from France, Germany and Italy) answered "very", compared to 57% of Americans.

Worse, these Europeans said they felt stuck in their "bad place". Asked, "How do you expect your personal situation to change in five years?" only a third predicted improvement. By contrast, two-thirds of Americans expect a better future.

So if Europeans themselves seem ready to write an obituary for the continent's future, why aren't we?

There are three main reasons.

The first is that Europe is simply too large and established an economy to collapse. Remember 1980?

Japanese competition was going to put America out of business. The US unemployment rate approached 10%, inflation was at 14%, and the prime rate was more than 20%. As with Europeans today, Americans back then were so morose that then president Jimmy Carter declared the country in "malaise".

But too much was at stake for surrender. Americans elected a new president whose defining characteristic was optimism. He galvanised national pride (and defence-sector spending) by taking on Communism, reduced taxes and released the entrepreneurial spirit that revived the American economy.

Europe has too much history, infrastructure and promise to slide into nothingness. Its workforce, for instance, is among the most highly educated in the world. And, while tepid, there are some signs of emerging discontent with the status quo. The quasireformer Angela Merkel was elected chancellor in Germany and the French government, hoping to spark job growth, did attempt to change an employment rule.

That reform was shot down by protest, but at least the government took a swing at progress. And it will happen again by necessity.

The second reason is Europe's exciting new cadre of transformative business leaders: Carlos Ghosn of Renault, Dieter Zetsche of Mercedes and Klaus Kleinfeld of Siemens, to name just three. These individuals . . . and they are not alone . . . understand that their companies operate in a global world, and are making the tough changes that are required to stay competitive.

The final reason that Old Europe will survive is New Europe. The eastern European nations, with their probusiness governments, are churning out a whole new generation of entrepreneurs who see opportunity everywhere and boundaries nowhere.

During our last trip to Warsaw, for example, we heard a businessman give a speech to about 300 other Polish entrepreneurs. He shocked them by saying, "We are getting too expensive here. I want my company to be the outsourcer of Europe, so I'm putting all my new operations in the Ukraine . . . and you should too!"

After a collective gasp, the group, albeit small, was electrified with excitement. And that, we would suggest, says as much about the future of Europe than an opinion poll of French, German and Italian grousers.

So, where will Europe be in five years? It won't be "fixed", but it will be better. In fact, drawing on the energy of its new business leaders and entrepreneurs, and increasingly cleansed of the calcifying effects of the socialist system, Europe will be well on the road to a positive economic future that apparently . . . and sadly . . .

many of its own people don't currently foresee.