00:00The CEO of Barclays Europe has weighed in on Europe's economic attractiveness amid concerns
00:05over tariffs and global competition.
00:07His comments come as Germany's parliament this week approved a reform of its debt break
00:11proposed by Chancellor-in-Waiting Friedrich Merz.
00:16Attractiveness is inherently a relative concept and investors and the global capital that
00:22they represent have choices and where they apply their capital ultimately expresses that
00:28choice of relative attractiveness.
00:31So I think what we've seen in the year-to-date period is clearly a compression in the U.S.
00:40stock market, for example, and an increase in the indices that I look at for the European
00:47stock market.
00:48That tells you something.
00:50According to a recent report from Morgan Stanley, European equities have this year outperformed
00:54U.S. stocks by the widest margins since the year 2000.
00:58The MSCI Europe index has risen over 9 percent since January, beating the S&P slide of 4.5
01:03percent.
01:04CEO Cesato also warned of a possible recession that could be triggered by the situation in
01:10the U.S.
01:11At the end of the day, the euro area has roughly 480 billion euros of goods exports to the
01:19U.S.
01:20Now, at the moment, the latest models that our research team have looked at are relatively
01:29mild in terms of the tariff assumption that's being made, but were there to be a 25 percent
01:35tariff on all of those goods, that could actually tip the eurozone into recession.
01:42Finally, on improving Europe's competitiveness, Barclay's CEO highlighted the need for deeper
01:47capital pools, advocating to pair institutional firepower with private capital to address
01:52major challenges, noting that relying solely on retail investments would be insufficient.
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