The euro will survive

ON EUROPE

Threadneedle's William Davies says too much political capital has been invested in the currency to let it fail

European equities have been trading in a range for more than a year now. However, over the past few weeks markets have moved to the top of this range, and there are good reasons to expect a break-out over the next two years. Sceptics argue the euro has imposed a ‘one size fits all’ approach to monetary policy, and the ongoing debt problems in peripheral markets will eventually lead the single currency to disintegrate. We acknowledge the current conditions are providing the sternest test yet to the euro’s long-term viability. However, the euro will survive – too much political capital ...