Crisis in peripherals is no excuse to be underweight the sector

ON EUROPE

EFG's Hilary Wakefield says investors must differentiate between strong Northern Europe and the peripheral countries.

It is simplistic to use the crises in peripheral Europe as an excuse to underweight European investments. Investors need to differentiate between strong growing northern Europe and the peripheral countries of Greece, Ireland, Portugal, and Spain. The euro faces many challenges in the context of this divide. In the short term, the problems of debt financing are likely to be papered over. Greece has received its plaster, Ireland now has access to an €85bn financing facility and Portugal is next in the firing line. The markets are without conscience – if they perceive a weakness in the s...