Is Mr. Trump really get what many of us have not believed to be possible? I recognize that my skepticism towards Europe has been very large and I still have my doubts, not towards companies themselves, if not towards a political structure that limits economic growth. In Europe we have large companies, but if we compare those that have grown on one side and on the other side of the Atlantic, the comparison is hateful and Europe is still far or from approaching, that is a fact.
Germany has just submitted a plan to issue 230 billion to invest in defense and the EU as a whole will spend about 800 billion of which 650 thousand will be contributed by the different governments. And we stay so wide? Given this expense plan, the European and the German stock market in particular rises strongly, Germany has a wide margin to increase its debt and should not be problematic, but do the rest of the countries have additional debt issuance margin? Once the euphoria hangover and countries such as France, Spain or Italy are passed, they want Dawn Fitzpatrick He stated that several European countries will not be able to place this “extra” debt in the market. We see how interest rates in Europe are shooting anticipating these new levels of debt, or perhaps anticipating a new level of economic growth or a combination of both, provided that the balance is maintained that will be good news, but if only anticipates the increase in debt …
Europe assumes more military spending (it is saved by the US), the types in the US have fallen and even talk about declines of types and in Europe the types are triggered and with these new levels of deficit we will see what real capacity it exists that the types of types in Europe can relax. At the same time he manages to put an end to the conflict and puts Russian oil in circulation which helps him reduce the price of oil. While the Europeans open bottles of Cava Mr. Trump announces deregulation and tax decreases that will boost their economy. Is it the possibility that we are exactly where Mr. Trump wants us to be? That each one takes their own conclusion …
Is Europe able to maintain this new situation? More military spending without reducing other items seems complicated and with elections every four years at any time this situation can jump through the air. A challenge for Europe and the EU.
There is no doubt that this investment tap can be a coup that is beneficial for Europe, it is not only the defense sector, also industrial and infrastructure, but Europe needs something more if you really want to close this gap, a change of mentality and support for innovation, if not this profitability of Europe above the US will be temporary whatever its duration. The German announcement is a blow to the table and who knows if Europe can grow promoted by expansive fiscal policies, Europe has found out that its usual ally has new friends and that it has to start over.
Jordi Martret
NORZ PATRIMONY INVESTMENT DIRECTOR