Euro: the time for truth is coming, says Allianz’s Dwane
In Europe, improvement in market sentiment has yet to come and pressure on peripheral European countries is increasing, according to Allianz Global Investors’ Neil Dwane.
Discussing the global economic outlook during a press conference in Milan, Dwane (pictured), chief investment officer for Europe at Allianz GI, said that after the three-months break that followed the long-term refinancing operation (LTRO) by the European Central Bank, negative sentiment on investments has returned in Southern Europe.
“On top of economic pressures, the feeling is that the political class has lost part of its power to implement austerity measures. Elections in France and in Holland are examples of that,” he said.
According to Dwane, over the next few months markets will experience constant volatility and a potential clash between Germany and France over plans for a fiscal compact.
“The moment of truth for the euro area is approaching. Europe will find itself trapped if it isn’t able to implement structural and fiscal reforms,” he said.
Dwane also called for more fiscal incentives to be promoted by Germany, Holland, Finland and France, and for more commitment to reforms by peripheral Europe countries.