Search
 

Europe Still Has Major Risks

Europe is far from growing and may be slipping into deflation and no growth

By Joel Ross | Updated on January 19, 2014

Billions have been raised by a variety of funds and investors to buy assets in Europe. While there is clear evidence that the financial situation in Europe has stabilized, it has not turned the corner to genuine improvement. Both the IMF and ECB have clearly been warning recently that Europe faces a potential Japan problem of deflation and stagnation. Spain and Italy are not going to default, and Greece is alive, but that is far from providing a sound investment environment. There are several banks still in serious problems like HSBC and Deutche. French banks have stabilized but are not healthy. France is stagnant and unlikely under Hollande to change for the better until the next election and then it will take awhile depending on who is elected. France is not a good place to be investing in illiquid assets. Greece has a far right wing problem that is so severe that the government has had to arrest members of the right wing party. In other countries, far right politicians have gained ground. Standards of living outside Germany are not improving and the Muslim immigrant population is increasing substantially.  These are all the sorts of ingredients that breed political problems or worse, and will make it harder for Europe to find consensus to solve the economic problems. 

Add to all of this the German issue. Germany, as the one major economy and the one with the money, is now viewed as pushing its exports vs building a domestic demand that would help other European countries. They are the creditor and have pushed other countries to do things their way- right or wrong- it rankles others. This makes it much harder to reach agreement on things like a uniform banking oversight program.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.