Stupnytska positive on Europe despite problems


Unless there is a big shock, Europe is unlikely to go into recession imminently, according to Anna Stupnytska.

Appearing on the FTAdviser Podcast, the global economist at Fidelity said: "Over the next few months I am feeling moderately positive [about Europe]. I don’t think we are going into a broad recessionary environment unless there is a big shock, perhaps China continuing to slow or tariffs directly on European goods.

"Beyond that, structural issues remain. There has been no progress on the important parts of the union such as the banking union and the capital markets union."

But she said the fact that there was a recognition that action was needed on these issues left her feeling positive.

Ms Stupnytska said: "There will be another crisis at some point and there will be reform in the crisis but I am quite optimistic that the Euro area can stay intact at least over the next decade or so."

This week the European Central Bank left interest rates on hold at record lows and Ms Stupnytska said it still had options to stimulate the Eurozone economy, such as returning to quantitative easing.

She said: "If data continues deteriorating and inflation expectations continue falling and there is a risk of de-anchoring there are certainly big decisions that will need to be made on the ECB side."

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