Michael, thanks for your insights. There are indeed signs of accelerating European growth out there if you look under the surface. While structural reforms have so far proceeded slower in the bigger countries (esp. France and Germany), the smaller countries have been making considerable progress in the last few years (for example here in the Netherlands: government budget surplus, unemployment at 4%, GDP 3+%, liberalization, privatization, reform of the social security system. But also signs of overheating: a red hot housing market, tight labor market, booming stock market, inflation over 2%.). In the past few months it looks like Germany and France are catching up with the reform of their labour markets and the social security system. I remember it took some time in the Netherlands for the reforms to materialize without them having too much apparent effect on economic growth (sluggish), but in the last few years we experience a better than expected robust economy. Once Germany and France have their structural reforms in place, the effect could be a sudden burst of economic growth.
How far out would you buy calls? |
