Will Europe Drag Down the World Economy?

Macrobusiness ponders the effects of a looming European recession (h/t nc links):

The good news is that the EU has a less pronounced cycle than the US. Owing to its stronger trade union base and more collaborative relations between capital and labour (like Germany’s kurtzabeit system), the EU inventory cycle is less severe. Thus downturns tend to be less precipitous and upturns less spectacular.
But the cycle still exists and the EU economy imported $282 billion worth of stuff from China in 2010. It also had $170 billion in imports from the US and $65 billion from Japan (and remember Japan’s latest good trade data was largely driven by an unexpectedly high EU result). These are wide channels for economic contagion to spread into already weak or weakening other large economies. I expect all three to show negative impacts in their export sectors for the next few months at least. The danger is, if these trade drops are severe enough, that the US and China also start losing jobs, threatening their own inventory cycles.
So, even without a renewed financial shock, the world is facing a very nasty period ahead in which external demand is subdued at best and probably falling.

I thought the more collaborative relations between capital and labor part was interesting.  As for what will happen if Europe goes into a very steep recession, I'm still extremely bearish.  So far, my calls for a double dip have been wrong, but I'm afraid it may just be that the timing is off.