UBP's Perrig: 'Japanisation' of Europe risk is increasing

The risk that Europe is facing a Japan-style 'lost two decades' is increasing, and the euro will likely fall further, says UBP's Jean-Sylvain Perrig.

Europe seems to have lost its momentum and is still a weak spot. The risk of Japanisation is growing, as the eurozone is fighting against slow growth and the threat of deflation. In spite of the European Central Bank's new policy of supervision over big banks' bonds alongside strong political will, the eurozone's governance is weak and its constraints are still greater than its advantages. As deficits continue to deepen and growth stagnates, the ECB seems to be unable to kick-start credit growth and boost confidence. With Ukraine still weighing on the eurozone, we are bearish on the e...