Curiously, the very high level of uncertainty does not seem to be denting companies’ optimism in the euro zone

There is now a very high level of uncertainty in the euro zone. This uncertainty concerns the outcome of the war in Ukraine, commodity prices and inflation, interest rates, relations with China, the social situation, etc. In an environment of such high uncertainty, one might expect companies to react with fear and reduce investment and employment, deleverage and build up cash reserves. None of this is visible for the time being in the euro zone, with the exception of relatively weak investment. Employment and credit are growing rapidly. The question is whether this is due to the solidity of companies’ situation (high profit margins, cash reserves), or whether it is merely a delay in companies’ reaction to the uncertainty.