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Vontobel Asset Management’s Peter Newell on efforts to resolve Europe’s economic issues.
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European leaders kicking off the first summit of the year today focusing on Europe's financial troubles.
And how to save Greece from bankruptcy.
But is it too late Peter Newell is managing -- -- bond -- asset management and he joins us now is it too late Peter -- -- you get.
Portugal selling ten year bonds -- over 15%.
Well it's a problem but there's much bigger problems in Europe that have to be addressed before Greece and Portugal are dressed.
And that is the massive structural imbalances in Europe.
So what is the Euro created it's created.
A massive sovereign debt crisis fragile banking high deficits high unemployment in many countries in other countries not so much like Germany.
That has to come together before the small pieces falling.
Along as well so what's -- first step in fixing that.
Well the first step in fixing it has realize and you got the problem.
And that it really Germany has to come forward and -- -- there are these the driver of the structural imbalance in Europe today.
May be little France possibly the Netherlands and in Finland.
That you have other countries who are not competitive who can't grow their way out of this.
Who borrow money in the more money you borrow -- higher interest rates -- -- -- just compounds on itself and it seems like Germany's getting fed up it seems like Germany's heard them talk the talk but they haven't seen them walk the walk and and they want -- they wanna see some action.
On -- part of Greece instead of just talk.
While they also want to dictate how the Greece handle their there there issues and I think the -- -- on said that there was an attack on their national dignity.
So this is what the -- the base at the problem.
-- -- -- you instead -- -- what you Germany step up and do it seems like one of the biggest problems is really German economic growth since it is the driver of all of Europe basically ammunition they be focusing on on sedar or how -- they address the problems in Greece.
Well that you know the problems -- receipts once again it's a seventeen nation problem and -- Greek problem Portuguese problem Italian problem as well.
You have to address the bigger problem.
David Cameron was right when he spoke -- -- about the the Germans having to change -- -- doing their structure of their economy to export less.
But here's here's the problem that does unify the -- countries are reluctant you mention -- countries are reluctant to allow a European Commission.
Two to do things that countries themselves used to do themselves like design their own fiscal policies there are some indications that Germans some Germans including the finance ministers said we want some control over their budget to make sure that they don't spend into more debt than they already have and that a lot of Greeks say hey -- -- we're not a sovereign nation we -- agreed that.
And other countries might say the same.
That's the crux of the problem.
Because with a master treaty in 1992 created the idea of a single currency.
And then the Euro came it was written into it but nobody followed rolled it into -- -- nobody but most of the other countries it is Germans and follow the rules as well you know how when the Berlin Wall fell they had to try to build their their economy.
They violated the the rules that they had set up they also.
In the beginning said no bailouts for insolvency.
And now they're -- to protect its in intractable problem as a money it is what we look for -- urges businesses that can help our clients.
Hopefully have a positive outcome like what what are you looking for -- I'm not sure we solve the problem of the debt crisis in -- we can find opportunity instead well the opportunities and in Europe is going to grow at point five negative point five are eaten there is no -- -- -- European stocks that are focused on their domestic economy.
Is next to impossible.
So the European names that are the most attractive for names that have a global footprint that are growing in the emerging markets are growing outside of Europe.
So I know our earnings to dodge differences Johnny walker black captain Morgan run Novo Nordisk which -- the largest producer of of -- drugs for for diabetics so there are some names in Europe that are attractive.
Not many yeah.
Alcohol drugs like it came back I.
Peter -- thank you very much thank you for immigrants.
