Monthly Barometer:
There is scant reason to be complacent about Europe, but beware of ignoring its upside potential. Economically, (1) growth is picking up and (2) investment is just about to do so, while (3) deflation is receding. Politically, the populist risk – while real – is overblown by the false equivalences drawn between continental Europe and the Anglo-Saxon world. In Europe, increases in real wages, lesser inequalities and decent social safety nets act as a buffer against tail risks à la Brexit and Trump. The political Centre won the semis in France and look to take the final in Germany (as the Dutch prime minister put it after his country won the quarter-finals) – and capital will flow in, benefiting European risk assets.
Wellness Edition:
Europe is often derided, but in terms of health and wellness, it is “best in class.” According to the Bloomberg Global Health Index, 14 of the 20 healthiest countries in the world are European, with Italy being the world’s healthiest country (despite having a sub-performing economy – one of the worst in Europe on many counts).
On average, Italians are in much better health than Americans, Canadians and the British, who generally suffer from higher blood pressure and cholesterol, as well as poorer mental health. The reasons are manifold and not always clear, but the Mediterranean diet seems to play an essential role. In the words of Adam Drewnowski, the director of the Center for Public Health Nutrition at the University of Washington, having access to fresh produce, fruit, lean meats and fish, as most Italians do, is a decisive contributing factor in better health.
