Jan. 23 (Bloomberg) -- European leaders heading to the home of Thomas Mann's Magic Mountain sanatorium are surprising credit-ratings companies, and the economists who agree with them, as the consensus predicts another year of trauma for the euro area.
Money market lending rates have eased, economic data from Germany to France are beating analysts' estimates and Italian and Spanish bonds are rebounding after their yields reached euro-era records in November. The Bloomberg European Financial Conditions Index has risen to minus 3.5 percent, its highest since August and up from a low of minus 5.4 percent in September.
That gives German Chancellor Angela Merkel and European Central Bank President Mario Draghi some room for optimism that the worst of their debt turmoil may be over as they head to Davos, Switzerland this week. That prognosis is challenged by billionaire George Soros and Nobel laureate Joseph Stiglitz, who will also be attending the World Economic Forum's annual meeting and argue that the crisis is still raging.