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Growth in Europe: Now what?
"The worst of the recession is behind us in Europe", that's according to Teis Knuthsen, the Chief Investment Officer of Saxo Private Bank. His comments come as growth in two of the Eurozone's biggest economies, France and Germany, grew by more than analysts were expecting.
Teis says there are encouraging signs in Spain's labour market and the Mediterranean countries are improving their current account balances and their primary budget deficits. However, he stresses he's not looking at a strong recovery and there's a lot to be done in terms of balance sheet repairs which will drag the economy down for a long time.
On the question of whether Angela Merkel, the Germany Chancellor, was right in her demand for more fiscal discipline in indebted countries, Knuthsen says it's complicated. If only the Eurozone countries had followed their own rules as far as budget deficits and debt were concerned, we would never have found ourselves in the mess we do today, he says. He stresses that without further structural reforms, we're not going to get a sustainable recovery.
02:30 minutes
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