“Debt crisis!” “Default!” “Euro faces meltdown!” Anyone who has picked up a newspaper recently could be forgiven for believing that once you have crossed the Channel, the population of an entire continent is either unemployed or on strike, and spends its free time
rioting in protest against Government cuts and working out how to avoid paying taxes.
Far from it…
Outside of the three most embattled peripheral nations, which make up just 6% of the euro zone’s GDP, much of euroland is doing well. Despite more modest than expected results, Germany’s GDP growth of 1.5% in the first quarter of 2011 was still its fastest year-on-
year growth since reunification in 1990. Setting aside the little “P.I.I.G.S”, namely Portugal, Ireland, Italy, Greece and Spain, every country in the euro block is posting positive growth.
If you want to pick sectors, German car-makers are clocking up record profits as they thrive on exports to China. But car makers are not the only winners: in 2010, German exports expanded 18%, fuelled by demand from expanding emerging market nations, whose economies are growing even more rapidly, for goods like telecoms and pharmaceuticals.
So don’t write off Europe just yet – the fog of bad headlines is obscuring core strength and a wealth of investment opportunities.