A Map for the Future of the Euro: Navigating political conflicts

Whitepaper | 23 August 2018 | Arnab Das, Global Market Strategist, Invesco

 

In our first ‘Future of Europe’ white paper, former Deputy Prime Minister of Poland Jacek Rostowski and Invesco Global Market Strategist Arnab Das analyse the tensions reshaping Europe in the era of Brexit, Trump and Putin.

The idea of a united Europe has seldom proven easy to realise. In fact, it has been beset by growing pains ever since the signing of the Treaty of Rome in 1957. Invesco’s new Future of Europe series of white papers aims to shed light on the challenges and opportunities presented by the ongoing quest to achieve integration across a continent whose history has been one of near-constant competition and conflict.

Co-authored by Jacek Rostowski, a former Deputy Prime Minister and Finance Minister of Poland, and Arnab Das, a Global Market Strategist and member of Invesco’s Global Thought Leadership team, the series examines Europe’s troubled past, uncertain present and likely future.

The first paper, A Map for the Future of the Euro: Navigating Political Conflicts, focuses on the tensions currently at play as the European project attempts to find a way forward in the era of Brexit, Trump and Putin.

Rostowski and Das analyse issues such as Franco-German relations, the growth of Europe’s political “wings” and the roles of the US and Russia in shifting the balance of power. They explain how the core dynamics between France and Germany, while still central to what lies ahead, are being transformed by the spread of extremism, the US’s explicit antagonism towards the EU and NATO, Russia’s expansionist aspirations and divergent notions of the euro’s future.

Although they suggest that the euro and the EU will survive, Rostowski and Das caution that three broad scenarios – deeper integration, status quo and eventual disintegration – remain “real possibilities”. They explain their thinking after unravelling an economic and political narrative that features a complex mix of unintended consequences, role reversals, security concerns and doubts over the longer-term prospects of what is still seen as “the West”. They conclude that now is a crucial time for every member state to reassess where it stands, what it might ask of the EU for itself and what it might require of its fellow member states.

The euro, the eurozone and the EU represent a unique and monumental experiment – one with enormous implications for the world of investment. Grounded in economic and political reality and drawing on both theory and experience, A Map for the Future of the Euro: Navigating Political Conflicts seeks to provide investors with an informed and practical framework for assessment and decision-making as the ever-fluctuating story of the European project continues to unfold.

 

Read the whitepaper

 

Investment risks

The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.

Important information

Where individuals or the business have expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice.

This article is marketing material and is not intended as a recommendation to invest in any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. The information provided is for illustrative purposes only, it should not be relied upon as recommendations to buy or sell securities.

Arnab Das

Arnab Das

Global Market Strategist