OMAM's Cowley: Real tests still to come for eurozone

Stewart Cowley, manager of the Old Mutual Global Strategic Bond fund, discusses why huge G6 indebtedness and negative real yields are the major concerns for investors in Europe

Investors have largely accepted the eurozone resolution announced on 27 October at face value. One day when we look back we may see it as a tipping point, but in reality we are engaged in an ongoing process. Ultimately, the $520bn Greek public debt is something the eurozone can afford. The $1trn apparently being offered (the sum still needs to be raised) to back the currency is not excessive relative to the amounts held in reserve by other large trading states. The real test is not Greece but Italy, with its $2.3trn public debt and a government at the margin of dysfunction. It will co...