Would You Fix Europe? - Real Time Insight

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A weekend approaches. Let's engage all those computer-bound quarterbacks. Give us your two cents on how to fix Europe.


European growth turned.  The debate: What should policymakers do from here

Europe matters to stocks.  A great catalyst would be a fresh plan.


Here is the policy backdrop.  The ECB has already gotten interest rates to a record low, and issued huge tranches of 1.0% 3-year loans.  The ECB takes over direct supervision of the euro zone's largest financial institutions in November as part of a larger Banking Union project.  Ten days ago, Treasury Secretary Jack Lew flew to Germany and asked that government to stimulate.  The Euro may get weaker as the U.S. 10-year Treasury rate rises, helping trade.

Forecasts show this for European countries in 2013 and 2014…

Country2013 GDP Growth2014 GDP Growth
Germany0.51.8
Ireland-0.11.6
Austria0.41.5
Finland-0.91.0
Belgium0.10.9
France0.20.8
Spain-1.30.6
Italy-1.80.5
Netherlands-1.10.4
Portugal-1.80.4
Greece-3.7-0.4
Euro Zone-0.41.0

Points to draw from the table:

(1) Ireland is leading with Germany in GDP growth now.  A full recovery is under way there.
(2) Spain and Italy are either in the same shape, or Spain is in slightly better shape.
(3) The Netherlands was never singled out as a 'sick man' in Europe.  It was.
(4) Portugal is ahead of Greece.  It will mark modest growth in 2014.
(5) Only Greece will be in recession in 2014.  It will be the only European country left there.

Yesterday, the FT coughed up this quote,

"Offers of longer term bonds earlier this month from Ireland, which exited its bailout program in December, and Portugal, which hopes to do the same in June, attracted strong international demand.  Across the periphery, yields, which move inversely with prices, have fallen back to pre-crisis levels. Some in Athens - and London bankers - see a chance for Greece to test the mood."

Can these countries heal faster?  Or would policy action screw up the healing process? 

The European Union is surely going to try to speed up the process.

My RTI:  Would YOU Fix Europe?


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.




This article appears in: Investing , Stocks

Referenced Stocks: ANW , CTTAY , GRFS

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