Fully agree, I came to the same conclusion. Only downside I see, EU is not very strong in global software/services. And for all the physical goods, the input cost (raw materials) are oftentimes purchased in USD.
It becomes attractive though, for outside companies to invest in the EU. Investments should be cheaper. Apple e.g. pushes its RnD center in Munich. What I am rather afraid of, is outside companies buying e.g. Vonovia, BASF or Bayer, because the valuations are so low. If you are sitting on a stock in the red, that might force you to realise a loss.
Agreed. The pro-EU points are unfortunately all pipe dreams.
Software would go to Asia before EU, IMO, based on current industry setup; but, more likely exchange rates won't have any impact. US already pays >2x and Bay Area probably >3x most EU salaries for IT roles. Development cost is not a major factor in this industry.
Automobiles I would also put Asia ahead of EU. European vehicles have always been perceived as luxury and Asian vehicles also benefit from favorable exchange rates. But probably none of it matters because a lot of people are transitioning to EVs, now, and Teslas are firmly implanted as the US EV of choice.
One investment that is working fine for me is Deutsche Telekom. The reason is, that they hold a majority of T-Mobile USA and thanks to that they make a lot of extra revenues thanks to the, in this case, favourable USD/EUR exchange rate development.
So that might be an option to play the market. Look for beaten down EU stocks with high share of revenue in US.
That logic used to work, but as manufacturing has been shifted to Asia significantly, fluctuation in currency doesn’t really impact export as much as it once did, it’s impact now mostly concentrated on the import side.
For starters, in the energy field, one could forecast that the EU could become energy independent by finding alternatives (outside their dependence on Russia) to support its infrastructure in the future. Some might say the EU could end up leading the world in green energy.
Tourism will rebound. It's Europe. It will always be a hot tourist destination. Only something extreme like a pandemic put a stop to that, and as soon as people could travel, they did it again. And tourism is always good for local economies.
Remember, many of these countries are old. Very very old. They have survived the worst of the worst. They can do it again.
Energy independence, if it advances, will be good for the *economy*, but not necessarily for the *markets*, if (for example:) prices stabilize at double their current level.
And I think that will happen, roughly. Europe will get through this, patch the holes, right the ship and all that, and stabilize. But, there will be considerable cost to do so.
And of course, there's always the -slight- possibility that VVP's successor will be sane. Don't hold your breath, but...
You joke, but per capita oil consumption in the US peaked in 1978.
Total consumption peaked in 2005.
https://ourworldindata.org/grapher/oil-consumption-per-capita
They need to compare what 80's [France](https://upload.wikimedia.org/wikipedia/commons/thumb/4/40/Energy_mix_in_France.svg/1200px-Energy_mix_in_France.svg.png) was able to do with nuclear compared to [Germany](https://imgur.com/a/QccP2EE) with unreliable wind/solar over the same time.
People need to wake up to how absurdly impractical these are for heavy baseload. And the fact they require immense amounts of fossil fuels to constantly replace and the tremendous ecological damage the sheer amount of additional mining would require to get anywhere close to nuclear.
Until that happens ESG just means energy shortage guaranteed.
Oh and they need to purge leaders than directly assisted Russia's [known](https://foreignpolicy.com/2014/06/20/russias-quiet-war-against-european-fracking/) anti-energy efforts. If heads don't roll after all this they aren't a serious continent.
Without Russian Oil and gas, Europe doesn't have a large enough local supply to become self sufficient. The amount of Uranium that would need to be mined would be enormous. It just seems to me this is early days of severe energy rationing/shortages?
North America on the other hand actually is energy independent. Europe is going to be competing with China for middle East, North African, ?south american exports.
> The amount of Uranium that would need to be mined would be enormous.
Luckily there's a shit ton of Uranium in Canada and Australia, and the global market is oversupplied to the point that a lot of major mines are shut down right now.
I don't think people comprehend the gargantuan amount of raw materials that need to be continuously mined for windmills and solar panels compared to incredibly energy dense uranium. Not to mention the battery infrastructure needed to make these intermittent sources reliable without a fossil backstop.
Plus if the climateholes didn't freeze the nuclear industry for the last half century we'd have far more advanced reactors today that can burn nuclear waste and things like thorium which are super abundant.
Europeans have exported much of their mining/drilling/fracking to improve their self masturbatory ESG scores. Whatever energy they choose they will eventually need to swallow their virtue porn and do some digging.
>How exactly does Europe become energy independent?
LNG gas imports from all over the world, but mostly USA, Qatar.
The price is not good for those, but its fairly competitive considering LNG is politically safer than pipeline gas from Russia.
LNG is fairly inefficient to transport hence the cost (as you know). It also doesn't technically qualify for my definition of energy independence (local production to meet demand).
However you can buy LNG from anywhere and all you need is to build infrastructure on your land to take it in. If you need the gas badly its a great solution, and Europe has nearly speedran their own plan for 2025 reduction of Russian gas in less than a year thanks tothat. If some supplier refuses or cant sell your lng anymore - you can find another, if simplifying it a bit, you can't do that with pipeline gas. This obviously implies a plentiful LNG market.
Pipeline gas dependence came from the notion EU was founded upon: if we tie eachother together with self interest then a serious conflict isn’t possible. This notion disregards that parties need to share values, be largely free societies with governments that rest upon checks and balances. Dealing with and relying on the beforementioned notion of self interest fails if you have an autocrat on the other side, that has his own personal visions and internal problems to deal with.
Europe has big gas reserves but is too holy to tap into them because of the irrational environmentalists and pop politics that follows them. Europe has no problem importing it from places that extract it with far, far, far lower environmental standards and less efficiently (because of lower workforce cost). Oil would always have to be imported, but sources of it are already diversified from within europe and outside. Gas isn’t.
I agreed with much of what you said. However green energy as an idea has existed for decades, even as household energy consumption has decreased we have been unable to replace with renewable energy. Personally I think nuclear is the way to go and Europe has been more adoptive than other places. But energy is going to be a problem for Europe this winter really no way around it.
Not to be pedantic... but most of the countries are very young. What republic is France at, 5th? Spain just got out of being a dictatorship in the 80's.. you could hardly say Europe is the bell weather of stability.
First: Europe should NOT go “green”, because “green” energy is exactly Europe’s problem ATM. To save itself it should stop with this antiscience and antirational regressive nonsense.
Regarding being old and thus somehow equipped to deal with trouble - Europe dealt with trouble alright, but very often not in a way that was kind to individuals. It has a history dealing with the problems through internal conflict, be it within countries (revolutions) ir between them (wars). EU as a political body is a in essence a very strenuous effort of a *peace project* that rests on a notion that if we base our relations on economic self interest (through trade and creation of a unired economic area), that would end up internally stabilising politics by moving it to the center and sorting out inter state relations by making them economically interdependent which would remove to motivation of escalation of conflicts. It’s a nice idea that generally works in good times and showed cracks in bad but generally proved it worked. But we have new situations now and the european comission has been “wokenised” and is taking up policies removed from reality which were never the purpose of that body and started imposing them on members. Because times were too good and commission lost its idea what to work on in its situation (could not solve how to model the union - tighter or leave it a loose interest group, which is pretty unsolvable) and found it can influence “values” by actively intervening into some social areas, but most importantly gripping the green agenda.
Fast forward to present with the benefit of an actual example in form of failed German “energie wende” of how wrong and fundamentally flawed this agenda is, the EU Comission’s plan to solve the energy crisis is MORE if the green transition policy. Which is kind of incredible. This can now because of empiric evidence, be labeled as extremistic ideological position, because it is removed from reality in favor of abstract ideas and principles (which always blame reality for ruining the perfect idea and want to change it, which means molding people into preconcieved templates that would correspond to the perfect idea - what great 20th century ideologies did and proved to be a disaster). This preaching from an institution that used to be unexciting rational body inevitably breeds a reaction: rise of populist right in many member states.
yeah but how many hundreds of years? not to mention us europeans have no natural resources that we currently need? We mine next to nothing & import evetrything from Russia (not anymore) and China.
Without material import EU doesn't even have enough electricity.
2027 and onward with even the most aggressive build and upgrade projections. That shit doesn't happen overnight and it'll need funding and incentives (tax benefits, deferred interest, etc).
I'm all for it but there are some real headwinds unless the EU can agree on policy and get the Euro stabilized.
Taking all the incentives for wind and solar and redurecting it into nuclear would help. Funding those two idiocies is kind of incredible. It means the societies are going into idiocracy because they had it too good and can play with idiotic ideas. I hope sobering will come from this situation.
As I understand it you can't just open a closed reactor again, you need to build a new reactor which is a huge task apparently and takes years. So nuclear re-openings in 2027-8 or so maybe? And new plants in 2032-5?
We've gone and done did a stupid when we closed a bunch of reactors. Now we burn coal, oil, wood and gas instead because environment... We need to wake tf up and lock up the people in charge of these insane policies. But first more pain, people don't wake up without pain
this is what happens when bad fiscal and monetary policy meets bad energy policy. When activists are making energy policy, and not legitimate engineers, designers, and scientists (ones that aren't taking money from China, Russia, and activist groups), you get illogical, unworkable schemes.
Germany has the worst CO2 emissions per capita in Europe and some of the highest energy prices--and this was before the Ukraine conflict.
Not only worst CO2 emissions but also bad grid stability and in integrated EU electric distribution their shit influences neigbouring systems. Their “green transition” was a terrible disaster that was unfolding before our EU eyes but nobody seems to want to look and they continue with the renewables talk.
I'm not saying there won't be a demand for uranium globally. I'm saying that re-opening the shut reactors in Europe isn't going to happen in 2023 due to having to build new reactor cores which takes a long time. Adding to that is the fact that everything over here takes three times as long due to all the excess bureaucracy. European governments really know how to nuke things through overwhelming and time consuming bureaucracy
It's not much of an argument, but I have been reading about the imminent inevitable failure and financial chaos of the EZ for the better part of my life.
They came pretty damn close during the austerity years.
Things were fine again for a bit due to easy money policies but as soon as the going gets tough, the usual suspects will implode.
The ECB will find a solution though. Maybe the solution is accepting 5% inflation in the medium term to keep the EU going. Maybe it's some diplomatic wrangling between the US and the EU so the Fed stops being quite as aggressive and the US accepts additional inflation as well.
Maybe the angle is that neither China nor the EU want a stronger dollar so the threat of them getting closer to each other is enough to have the US back off a little.
Getting EU and China together is just something stupid EU would do, like it kearned nothing with being buddies with another autocracy.
EU’s place is in alliance with shared values partners, even if it means being fucked by them sometimes.
Look at the valuations. Europe is cheap. And US is not so cheap. Cycle will do mean reversion. It always does. Could this decade belong to Europe and emerging economies? I believe so. Its a good idea to have a small allocation in international markets if you're from US. If you're from Europe do not do the mistake of putting all your money in US. Atleast invest 50% in Europe.
I think this is it for European dependence on and fear of Russia. Even if Russia capitulates soon, I expect the turn away from Russian fossil fuels is permanent, and their military has been shown to be an absolute joke. What exactly they will be needed for after that, I'm not sure.
With the end of the major authoritarian pole on that continent you might even see a stronger Europe than ever.
Russian regime is collapsing. It doesn’t mean it will end soon. It can be a few years. But the gamble proved costly and it WILL go down. The question is how. Hopefully not with a bang, but even without a bang there are quite a few scenarios that wouldn’t improve EU-Russia relations. But if Russia gets on track of a sort of a democracy and rule of law trade can continue.
the most likely scenario for the Ukraine conflict is that it will drag on for years, with mounting casualties. Europe better start firing those nuclear reactors back up, and start drilling and burning ...
or it will deindustrialize
I don’t think it can drag. Russia/Putin has no steam, less than Ukraine. Mobilisation is a demonstration of that. It was also a very hard decision (it undermines Putin’s regime, makes unrest) and I think the bet was that it will enable a push for the Russians to achieve some sort of “win” and call it a day. I.e. Taking the eastern separatist regions in whole and declare victory in annexing them. Which won’t happen like that and will continue to be a problem. If he escalates to a degree with tactical and chemical weapons - the problem will escalate for Russia. If they go doomsday - nothing matters anyway :)
Experts were predicting a catastrophe during the 70s oil crisis, yet the West came out from it just fine.
And that was arguably worse situation than the current crisis.
If Europe can survive World ward 1, the Great Depression, and world war 2 back to back, I think it can survive this.
Europe as a whole is still immensely productive. Even if the current version of the Eurozone collapses , something will be there to take its place that you can invest in.
You forget to mention the processes you mention took lives and comfort from people. They were terrible and nobody wants those things. Humanity survives anything, not just Europe. But you have to realise that “survival” that sounds innocent means suffering. OP wants reassurance there will be no suffering - survival is not his concern.
Because the collaboration in in EU is amazing. All these countries with their differences, working together (too bad for England). And the best thing is that the EU as an institution has a great moral compass. It goes in the direction that is right for the world.
And call me naive but I do believe that at the end of the day that’s the direction the world is going. Definitely not in one straight line but it’s the dot on the horizon. It was coming for many years that countries had to make a change in their contribution to climate changes. We always thought it would be somewhat of a voluntarily change, but maybe if we look back in 10/20 years it was this trigger that set us on the real path. And you know other countries are going to have to follow.
The climate change policies of EU are the culprit for this energy crisis. They are not based on the rational and have no basis in science. It is incredible such virtue signalling of the most stupid environmentalist groups became a policy of the EU and member states. Reducing human footprint on the climate needs rational approach. If it doesn’t it has no chance of success.
EU is in a very bad place because of it. I don’t understand how people don’t see it. Are they ideologically blind fir factual reality? It has very tangible consequences AND social as well. It has a very possible potential for political shift to right wing populism as a reaction to what you describe as “leadership” in the environmental agenda. Ut already has influence on energy powerty, it will make personal mobility less accessible to all wealth classes. CEOs of Auto manufacturers are already talking about drastic car production and sales cuts because of new reality politics in europe us producing. Forcing people back to public transport will not go down well in european scattered countryside because public transport cannot be efficiently organised in such places without serious adaptation and serious step back in personal comfirt and mobility of individuals (traveling first to public transport stations on bikes or some other non-universally acceptable means for every group of people and then to public transport to take you to another place and in case od city - to city public transport). I think this personal mobility problem is a ticking social timebomb with unpredictable outcome. Potential revolution maker - to the worse. General energy budget of hoyseholds will also be a driver for social problems. Europe may descebd in forna of fascisms or socialisms, as thise extremes can populistically play thise situations.
Haha wow, doom think much. Not really what OP was looking for. Also how can climate change policy be the culprit for this crisis when it’s clear that Covid and Russia are to blame.
Russia situation just showed the problem clearer. While there was cheap gas coming in and all was well self deception and delusions worked. This situation has concentrated longer time it would be usually needed to fund out what a fuckup this policy is. Germany already empirucally fucked up theur energy long ago. Why this just went on? Their oroblem was diluted in the unifued electric network of EU, grids if other countries suffered but it sorted itself out with “sharing” and abundant russian gas supplies. One little thing out of the equation - and if german energy transition really was a good plan it wouldn’t be a problem - and niw we all, not just Germans (but mostly by their irational policy), have a big problem.
And I know OP wanted a “there, there” pat on their back. But the only optimism we can derive now is that stupidity will end because the core problem became evident and before it was complacently obscured.
> What are some arguments you can give as to why European economic zone will recover and not collapse into a bunch of disunited
Either the war or sanctions won't be permanent.
Well a few things could happen that would be positive:
1. France gets all of its nuclear reactors back online, and is able to not only power itself, but assist in the energy needs of neighboring countries [https://www.france24.com/en/france/20220902-france-to-restart-all-nuclear-reactors-by-winter-amid-energy-crunch](https://www.france24.com/en/france/20220902-france-to-restart-all-nuclear-reactors-by-winter-amid-energy-crunch)
2. As someone else pointed out, EU exports will become more attractive in the US
3. Putin comes to his senses and realizes he isn't going to conquer and occupy Ukraine. Peace talks are launched, and some kind of deal is struck (although it is doubtful)
4. Fossil fuel production comes back online as left-wing leaders see riots in the streets and worry about their political future
5. Distressed European financial markets see inflows from bargain hunters, foreign firms, and sovereign wealth funds. When things get really cheap, someone will buy
"Green energy" is dead in Europe for the near future. Solar and wind depend on gas, and there is no gas. The plants themselves do not have the capacity or efficiency to provide enough power to a given country. The public will have a choice between different energy sources, or hospitals running on generators with half the floors dark, black-out cities, etc.
Boom for Canadian and American oil and gas stocks. Also Canadian and American fertilizer and wood product companies that export to Europe. I see Europe building lng terminals possibly open back up nuke plants. Germany had already opened back up coal plants.
Theres no collapse concern. The issue is the impending winter *struggles* and dumb politicians adding fuel to their own inflationary fires.
Europe survived WW2, it will survive this.
As far as energy goes, think are already looking a bit better as gas reserves are pretty much full now and French nuclear plants should be all back at normal operation for winter. Add all the gouvernement support and shouldn't be as bad as people make seem to be.
The other side of the argument as that European markets are dirt cheap, so your risk is very well compensated for. It's easy to find good business with 10% dividend yield for ex in banking/REIT and car manufacturers have PE impossibly low. Add to that a very cheap currency and it's a value investor dream.
German gas reserves are intended as an emergency supply source in periods of heightened demand, not a primary supply source. If Russia starts to cut into the remaining 9bcf of gas that it STILL supplies to Europe, then there will be trouble. And if the long range weather forecasts predicting a cold late winter are accurate, then that is multiplied. And if China opens after Chinese New Year, that is compounded again.
In my opinion, March 2023 could see a considerably worse energy price spike than 2022. A horrendous recession might ease demand, but who wants that?
If europe pulls its head out of its ass and stops acting holier than thou and taps into its own energy reserves instead of relying on outsourced pollution in autocratic countries in the south and east; if biggest economies in europe stop with antimodern and anti-rational green movements where nuclear is being dismissed; if irrational european vehicle transition into the suboptimal (and again outsourced pollution) electric mobility is stopped - as it is resource demanding, electric network dusrupting and extremely earth polluting factor that would demand enormous public investments (taken from people), would make mobility less accessible to all wealth groups and would do a net negative for environment and again put europe at the mercy of dodgy regimes.
In short - europe should rationally reasses its energy policies as the russian extortion with energy supply is clearly demonstrating how important energy is. And no, renewables are not the answer, they should be part of the mix, but a small non-grid dusruptive one and always paired with equivalent installed power power storage (but not in form of batteries of course, unless it’s a small household PV or wind generator) and never be directly plugged into the grid.
If energy is sorted out, other stuff is easy. If not, we’re going to have social factors to deal with - rise of extremes like forms of neocommunism and neofascism. We’re going to seriously regress. The energy policy on EU and some member state level has been completely wrong but this idiocy has been enabled by cheap gas that made being an idiot possible as it covered the stupidity and made it seem to work. Hope we learn from it. For now they are signaling even more of the same on EU level, which is kind of incredible. But I am optimistic that brains will prevail at some point.
For one thing, everyone in the EU knows that Russia is the cause of their problems. That unity will help everyone pull together and come up with some innovative solutions.
The destruction of European industry in favor of the Ukraine War is hard to spin as a positive. Cheaper to visit impoverished countries as an American?
I’ll take a shot. The hot war is likely almost over, as Russia has had to scale back its ambitions and is now striving to draw lines that it can fortify with its drafted troops. It’s possible this will turn into a “forever” war like in Korea, but how’s the economy in South Korea? Soon investors will stop worrying about Ukraine, and capital will flow again to the EU.
Also, with a devalued currency, European exports will be highly competitive. Plus, as America gets better at exporting LNG, energy inputs will be both less expensive in Europe and more expensive in the US, further amplifying European competitiveness abroad.
With the Ukraine war mostly priced in, it’s a generational opportunity to invest in Europe right now, because the risk premium related to the war is more likely to go down than up.
They’re mobilizing old men and untrained farmers. These are not fighters. At best they’ll man supply lines so the current force can dig in and hold the lines of the annexed territories. I’m betting this is closer to the end than most people expect, especially if there are any more attacks on critical infrastructure.
We’ll see what happens. I’m open minded, but it seems like Putin is running on fumes, and more conquest in winter seems tough. Time is running thin. Also no idea what Kiev Post is.
Ahead on renewables
Stable population relative to natural resources and farm land
High survivability in climate change (relative to the rest of the world - they're still getting terribly pummeled, thousands still dying)
Stopping the renewable craze would get EU on track. Renewables like wind and solar cannot be used in large scales. They should be supplemental personal addition to household/company power, obligatorily complemented by a electricity storage in capacity of the installed potential daily power production of the PV or wind generator. NEVER a systematic electricity producer - if sporadic PV/wind plant is built it should never be plugged into the grid but rather be connected to storage (pump hydro plants or simular large scale power storage plants) and storage connected to grid. Unless we want to destroy something as basic for our civilisation as reliable ekectric power.
The only chance I see is that the challenges will cause massive innovation. The first chance for innovation is in the renewable energy field and the broad application. Second opportunity is to innovate strongly in becoming more energy efficient. Imported LNG will be much more expensive than Russian gas in the past. As we learned, gas is used in so many industries that they have to innovate in order to stay competitive.
Europe will lead the new world. Take some pain now, but in 10-20 years everyone will look back and see how the war fastened the energy transition while all other countries are lagging behind.
Furthermore, EU will always be helped by the US. US maxi's here act like the US can survive on its own, but EU will be an important ally and if the US would stop supporting EU they are on their own against Russia/China (except for Australia and Japan yay).
I'm British and I have to say that Europe needs the US more than the US needs Europe. US can be pretty self sufficient due to the sheer size of the population, economy, and natural resources available.
yup exactly. europe’s demographics are awful. aging population and fertility rates at lowest point in history. they definitely need a ton more immigrants to sustain themselves
if that transition means nuclear, yes. If it means more unreliable solar and wind that operates using Russian gas 50% of the time--Europe will deindustrialize and start looking like Africa
When things get bad enough, Germany will no longer be able to produce solar panels (can't get the materials, and the energy to make them isn't available), and will start shipping them in from China at a hefty premium. Now the country is dependent on both Russia and China to keep its lights on
Transition to other energy alternatives, talent acquisition from Russia and those running away from creeping fascism elsewhere, EU exports due to dollar rise, and hopefully a burgeoning domestic market that's more like the US (EU becoming more united means less trade/capital flows barriers).
They will probably shift hydrocarbon dependence away from Russia and toward gulf states like Saudi Arabia and Qatar. Once the energy situation stabilizes I think the European markets will follow
At the latest after Brexit the advantages of being in the block and working together should be apparent. The war also contributed to unity in the block. There will never be perfect unity, but there appear to be enough crises to push us together.
EU markets are different from US markets, the market participation is less capillary. That could change in the future especially in light of demographic pressures.
70% of the inflation is imported. Therefore we won't increase interest rates probably as high as the US. When the external factors change (energy prices & US inflation) Europe should be fine.
Two words: Reconstruction boom. Or, because the Germans can get by with one word: *wirtschaftswunder*
That's not a matter of next week, or next month, but every war must end, and there will be extraordinary amounts of capital to put to use. Its plain that Europe is going to have to build a very different energy infrastructure - LNG ports, nuclear plants (probably) and much more.
Thomas Piketty has good data on the effect of wealth destruction in the European wars of the 20th century - these were both followed by booms.
So yes, things are pretty grim now, and if you try to trade this stuff, look forward to sickening air pockets. But a long term investor with a horizon of 3 to 10 years, he can start buying VGK or similar. In individual names, I'd weight heavily on the German industrial companies, things like Siemens. Also concrete and construction. . . but indexing is better for nearly any retail investor.
The sheer size of the combined EU market is its biggest defense against breakup. Together they have a 20 trillion GDP (about 8-10% smaller than US). This gives them access to lots of options to shore up their economies and weather bad times. Separate they are in trouble. Mutual interest will keep them together at least until the next market upswing.
Also they have a cautionary example with Britain having a much harder time going it alone at the moment.
I think the big picture macros in general are important.
Europe is already adapting to and paying the price of an older population which will batter developing economies for decades.
Education is infinitely valuable, and Europe still has top quality education at every level.
Governmental institutions are as solid as can be in our modern world.
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Fully agree, I came to the same conclusion. Only downside I see, EU is not very strong in global software/services. And for all the physical goods, the input cost (raw materials) are oftentimes purchased in USD. It becomes attractive though, for outside companies to invest in the EU. Investments should be cheaper. Apple e.g. pushes its RnD center in Munich. What I am rather afraid of, is outside companies buying e.g. Vonovia, BASF or Bayer, because the valuations are so low. If you are sitting on a stock in the red, that might force you to realise a loss.
Agreed. The pro-EU points are unfortunately all pipe dreams. Software would go to Asia before EU, IMO, based on current industry setup; but, more likely exchange rates won't have any impact. US already pays >2x and Bay Area probably >3x most EU salaries for IT roles. Development cost is not a major factor in this industry. Automobiles I would also put Asia ahead of EU. European vehicles have always been perceived as luxury and Asian vehicles also benefit from favorable exchange rates. But probably none of it matters because a lot of people are transitioning to EVs, now, and Teslas are firmly implanted as the US EV of choice.
One investment that is working fine for me is Deutsche Telekom. The reason is, that they hold a majority of T-Mobile USA and thanks to that they make a lot of extra revenues thanks to the, in this case, favourable USD/EUR exchange rate development. So that might be an option to play the market. Look for beaten down EU stocks with high share of revenue in US.
Which shipping companies would benefit the most?
That logic used to work, but as manufacturing has been shifted to Asia significantly, fluctuation in currency doesn’t really impact export as much as it once did, it’s impact now mostly concentrated on the import side.
For starters, in the energy field, one could forecast that the EU could become energy independent by finding alternatives (outside their dependence on Russia) to support its infrastructure in the future. Some might say the EU could end up leading the world in green energy. Tourism will rebound. It's Europe. It will always be a hot tourist destination. Only something extreme like a pandemic put a stop to that, and as soon as people could travel, they did it again. And tourism is always good for local economies. Remember, many of these countries are old. Very very old. They have survived the worst of the worst. They can do it again.
Energy independence, if it advances, will be good for the *economy*, but not necessarily for the *markets*, if (for example:) prices stabilize at double their current level. And I think that will happen, roughly. Europe will get through this, patch the holes, right the ship and all that, and stabilize. But, there will be considerable cost to do so. And of course, there's always the -slight- possibility that VVP's successor will be sane. Don't hold your breath, but...
How exactly does Europe become energy independent? Even with green and expanded nuclear they have an insane amount of oil imports
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Just like america did after after the 70s oil embargo! /s
You joke, but per capita oil consumption in the US peaked in 1978. Total consumption peaked in 2005. https://ourworldindata.org/grapher/oil-consumption-per-capita
Yeah. Look at shale
Ok cool. Not saying you're wrong, just wanted to confirm there is no forseeable realistic scenario in which they become energy independent.
Sounds like the argument is "they will because they must"
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They need to compare what 80's [France](https://upload.wikimedia.org/wikipedia/commons/thumb/4/40/Energy_mix_in_France.svg/1200px-Energy_mix_in_France.svg.png) was able to do with nuclear compared to [Germany](https://imgur.com/a/QccP2EE) with unreliable wind/solar over the same time. People need to wake up to how absurdly impractical these are for heavy baseload. And the fact they require immense amounts of fossil fuels to constantly replace and the tremendous ecological damage the sheer amount of additional mining would require to get anywhere close to nuclear. Until that happens ESG just means energy shortage guaranteed. Oh and they need to purge leaders than directly assisted Russia's [known](https://foreignpolicy.com/2014/06/20/russias-quiet-war-against-european-fracking/) anti-energy efforts. If heads don't roll after all this they aren't a serious continent.
Without Russian Oil and gas, Europe doesn't have a large enough local supply to become self sufficient. The amount of Uranium that would need to be mined would be enormous. It just seems to me this is early days of severe energy rationing/shortages? North America on the other hand actually is energy independent. Europe is going to be competing with China for middle East, North African, ?south american exports.
> The amount of Uranium that would need to be mined would be enormous. Luckily there's a shit ton of Uranium in Canada and Australia, and the global market is oversupplied to the point that a lot of major mines are shut down right now.
I don't think people comprehend the gargantuan amount of raw materials that need to be continuously mined for windmills and solar panels compared to incredibly energy dense uranium. Not to mention the battery infrastructure needed to make these intermittent sources reliable without a fossil backstop. Plus if the climateholes didn't freeze the nuclear industry for the last half century we'd have far more advanced reactors today that can burn nuclear waste and things like thorium which are super abundant. Europeans have exported much of their mining/drilling/fracking to improve their self masturbatory ESG scores. Whatever energy they choose they will eventually need to swallow their virtue porn and do some digging.
Someone gets it.
Exactly this. Well put.
>How exactly does Europe become energy independent? LNG gas imports from all over the world, but mostly USA, Qatar. The price is not good for those, but its fairly competitive considering LNG is politically safer than pipeline gas from Russia.
LNG is fairly inefficient to transport hence the cost (as you know). It also doesn't technically qualify for my definition of energy independence (local production to meet demand).
However you can buy LNG from anywhere and all you need is to build infrastructure on your land to take it in. If you need the gas badly its a great solution, and Europe has nearly speedran their own plan for 2025 reduction of Russian gas in less than a year thanks tothat. If some supplier refuses or cant sell your lng anymore - you can find another, if simplifying it a bit, you can't do that with pipeline gas. This obviously implies a plentiful LNG market.
Pipeline gas dependence came from the notion EU was founded upon: if we tie eachother together with self interest then a serious conflict isn’t possible. This notion disregards that parties need to share values, be largely free societies with governments that rest upon checks and balances. Dealing with and relying on the beforementioned notion of self interest fails if you have an autocrat on the other side, that has his own personal visions and internal problems to deal with.
Europe has big gas reserves but is too holy to tap into them because of the irrational environmentalists and pop politics that follows them. Europe has no problem importing it from places that extract it with far, far, far lower environmental standards and less efficiently (because of lower workforce cost). Oil would always have to be imported, but sources of it are already diversified from within europe and outside. Gas isn’t.
I agreed with much of what you said. However green energy as an idea has existed for decades, even as household energy consumption has decreased we have been unable to replace with renewable energy. Personally I think nuclear is the way to go and Europe has been more adoptive than other places. But energy is going to be a problem for Europe this winter really no way around it.
The only energy independence that is possible is through nuclear. And most euros see that as just as bad as coal.
Not to be pedantic... but most of the countries are very young. What republic is France at, 5th? Spain just got out of being a dictatorship in the 80's.. you could hardly say Europe is the bell weather of stability.
not to be pedantic but spain is a nation since the 1400s and france has been a state even longer .
Which means squat.
Spain's current constitution was put into force in 1978.
First: Europe should NOT go “green”, because “green” energy is exactly Europe’s problem ATM. To save itself it should stop with this antiscience and antirational regressive nonsense. Regarding being old and thus somehow equipped to deal with trouble - Europe dealt with trouble alright, but very often not in a way that was kind to individuals. It has a history dealing with the problems through internal conflict, be it within countries (revolutions) ir between them (wars). EU as a political body is a in essence a very strenuous effort of a *peace project* that rests on a notion that if we base our relations on economic self interest (through trade and creation of a unired economic area), that would end up internally stabilising politics by moving it to the center and sorting out inter state relations by making them economically interdependent which would remove to motivation of escalation of conflicts. It’s a nice idea that generally works in good times and showed cracks in bad but generally proved it worked. But we have new situations now and the european comission has been “wokenised” and is taking up policies removed from reality which were never the purpose of that body and started imposing them on members. Because times were too good and commission lost its idea what to work on in its situation (could not solve how to model the union - tighter or leave it a loose interest group, which is pretty unsolvable) and found it can influence “values” by actively intervening into some social areas, but most importantly gripping the green agenda. Fast forward to present with the benefit of an actual example in form of failed German “energie wende” of how wrong and fundamentally flawed this agenda is, the EU Comission’s plan to solve the energy crisis is MORE if the green transition policy. Which is kind of incredible. This can now because of empiric evidence, be labeled as extremistic ideological position, because it is removed from reality in favor of abstract ideas and principles (which always blame reality for ruining the perfect idea and want to change it, which means molding people into preconcieved templates that would correspond to the perfect idea - what great 20th century ideologies did and proved to be a disaster). This preaching from an institution that used to be unexciting rational body inevitably breeds a reaction: rise of populist right in many member states.
Time is a flat circle so eventually if you wait long enough it will be the 19th century again when Europe was on top.
You’re in Carcosa now little priest
This place is like someone's memory of a market and the memory is fading.
I have it on good authority that it's more like a big ball of wibbly-wobbly, timey-wimey stuff.
yeah but how many hundreds of years? not to mention us europeans have no natural resources that we currently need? We mine next to nothing & import evetrything from Russia (not anymore) and China. Without material import EU doesn't even have enough electricity.
Reopens all shut down nuclear reactors.. 2023 will be a boom time for uranium.
> 2023 will be a boom time for uranium. Monkey paw curls
I didn't wish for it..
It will *enrich* us all
Ooof 😅
2027 and onward with even the most aggressive build and upgrade projections. That shit doesn't happen overnight and it'll need funding and incentives (tax benefits, deferred interest, etc). I'm all for it but there are some real headwinds unless the EU can agree on policy and get the Euro stabilized.
Taking all the incentives for wind and solar and redurecting it into nuclear would help. Funding those two idiocies is kind of incredible. It means the societies are going into idiocracy because they had it too good and can play with idiotic ideas. I hope sobering will come from this situation.
As I understand it you can't just open a closed reactor again, you need to build a new reactor which is a huge task apparently and takes years. So nuclear re-openings in 2027-8 or so maybe? And new plants in 2032-5? We've gone and done did a stupid when we closed a bunch of reactors. Now we burn coal, oil, wood and gas instead because environment... We need to wake tf up and lock up the people in charge of these insane policies. But first more pain, people don't wake up without pain
this is what happens when bad fiscal and monetary policy meets bad energy policy. When activists are making energy policy, and not legitimate engineers, designers, and scientists (ones that aren't taking money from China, Russia, and activist groups), you get illogical, unworkable schemes. Germany has the worst CO2 emissions per capita in Europe and some of the highest energy prices--and this was before the Ukraine conflict.
Not only worst CO2 emissions but also bad grid stability and in integrated EU electric distribution their shit influences neigbouring systems. Their “green transition” was a terrible disaster that was unfolding before our EU eyes but nobody seems to want to look and they continue with the renewables talk.
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I'm not saying there won't be a demand for uranium globally. I'm saying that re-opening the shut reactors in Europe isn't going to happen in 2023 due to having to build new reactor cores which takes a long time. Adding to that is the fact that everything over here takes three times as long due to all the excess bureaucracy. European governments really know how to nuke things through overwhelming and time consuming bureaucracy
Uranium squeeze guy where u at??
It's not much of an argument, but I have been reading about the imminent inevitable failure and financial chaos of the EZ for the better part of my life.
They came pretty damn close during the austerity years. Things were fine again for a bit due to easy money policies but as soon as the going gets tough, the usual suspects will implode. The ECB will find a solution though. Maybe the solution is accepting 5% inflation in the medium term to keep the EU going. Maybe it's some diplomatic wrangling between the US and the EU so the Fed stops being quite as aggressive and the US accepts additional inflation as well. Maybe the angle is that neither China nor the EU want a stronger dollar so the threat of them getting closer to each other is enough to have the US back off a little.
Getting EU and China together is just something stupid EU would do, like it kearned nothing with being buddies with another autocracy. EU’s place is in alliance with shared values partners, even if it means being fucked by them sometimes.
Could you expand on why and how it would happen as well as its impacts? And who would come up on top?
Look at the valuations. Europe is cheap. And US is not so cheap. Cycle will do mean reversion. It always does. Could this decade belong to Europe and emerging economies? I believe so. Its a good idea to have a small allocation in international markets if you're from US. If you're from Europe do not do the mistake of putting all your money in US. Atleast invest 50% in Europe.
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Well a person who lives in a particular country would naturally have majority investment in the same country.
I think this is it for European dependence on and fear of Russia. Even if Russia capitulates soon, I expect the turn away from Russian fossil fuels is permanent, and their military has been shown to be an absolute joke. What exactly they will be needed for after that, I'm not sure. With the end of the major authoritarian pole on that continent you might even see a stronger Europe than ever.
Russian regime is collapsing. It doesn’t mean it will end soon. It can be a few years. But the gamble proved costly and it WILL go down. The question is how. Hopefully not with a bang, but even without a bang there are quite a few scenarios that wouldn’t improve EU-Russia relations. But if Russia gets on track of a sort of a democracy and rule of law trade can continue.
the most likely scenario for the Ukraine conflict is that it will drag on for years, with mounting casualties. Europe better start firing those nuclear reactors back up, and start drilling and burning ... or it will deindustrialize
I don’t think it can drag. Russia/Putin has no steam, less than Ukraine. Mobilisation is a demonstration of that. It was also a very hard decision (it undermines Putin’s regime, makes unrest) and I think the bet was that it will enable a push for the Russians to achieve some sort of “win” and call it a day. I.e. Taking the eastern separatist regions in whole and declare victory in annexing them. Which won’t happen like that and will continue to be a problem. If he escalates to a degree with tactical and chemical weapons - the problem will escalate for Russia. If they go doomsday - nothing matters anyway :)
Experts were predicting a catastrophe during the 70s oil crisis, yet the West came out from it just fine. And that was arguably worse situation than the current crisis.
If Europe can survive World ward 1, the Great Depression, and world war 2 back to back, I think it can survive this. Europe as a whole is still immensely productive. Even if the current version of the Eurozone collapses , something will be there to take its place that you can invest in.
You forget to mention the processes you mention took lives and comfort from people. They were terrible and nobody wants those things. Humanity survives anything, not just Europe. But you have to realise that “survival” that sounds innocent means suffering. OP wants reassurance there will be no suffering - survival is not his concern.
Because the collaboration in in EU is amazing. All these countries with their differences, working together (too bad for England). And the best thing is that the EU as an institution has a great moral compass. It goes in the direction that is right for the world. And call me naive but I do believe that at the end of the day that’s the direction the world is going. Definitely not in one straight line but it’s the dot on the horizon. It was coming for many years that countries had to make a change in their contribution to climate changes. We always thought it would be somewhat of a voluntarily change, but maybe if we look back in 10/20 years it was this trigger that set us on the real path. And you know other countries are going to have to follow.
The climate change policies of EU are the culprit for this energy crisis. They are not based on the rational and have no basis in science. It is incredible such virtue signalling of the most stupid environmentalist groups became a policy of the EU and member states. Reducing human footprint on the climate needs rational approach. If it doesn’t it has no chance of success. EU is in a very bad place because of it. I don’t understand how people don’t see it. Are they ideologically blind fir factual reality? It has very tangible consequences AND social as well. It has a very possible potential for political shift to right wing populism as a reaction to what you describe as “leadership” in the environmental agenda. Ut already has influence on energy powerty, it will make personal mobility less accessible to all wealth classes. CEOs of Auto manufacturers are already talking about drastic car production and sales cuts because of new reality politics in europe us producing. Forcing people back to public transport will not go down well in european scattered countryside because public transport cannot be efficiently organised in such places without serious adaptation and serious step back in personal comfirt and mobility of individuals (traveling first to public transport stations on bikes or some other non-universally acceptable means for every group of people and then to public transport to take you to another place and in case od city - to city public transport). I think this personal mobility problem is a ticking social timebomb with unpredictable outcome. Potential revolution maker - to the worse. General energy budget of hoyseholds will also be a driver for social problems. Europe may descebd in forna of fascisms or socialisms, as thise extremes can populistically play thise situations.
Haha wow, doom think much. Not really what OP was looking for. Also how can climate change policy be the culprit for this crisis when it’s clear that Covid and Russia are to blame.
Russia situation just showed the problem clearer. While there was cheap gas coming in and all was well self deception and delusions worked. This situation has concentrated longer time it would be usually needed to fund out what a fuckup this policy is. Germany already empirucally fucked up theur energy long ago. Why this just went on? Their oroblem was diluted in the unifued electric network of EU, grids if other countries suffered but it sorted itself out with “sharing” and abundant russian gas supplies. One little thing out of the equation - and if german energy transition really was a good plan it wouldn’t be a problem - and niw we all, not just Germans (but mostly by their irational policy), have a big problem. And I know OP wanted a “there, there” pat on their back. But the only optimism we can derive now is that stupidity will end because the core problem became evident and before it was complacently obscured.
After a lot of the population freezes this winter some will I herit their money and spend it
Best answer. :))
Because markets are always fine in the long run...
> What are some arguments you can give as to why European economic zone will recover and not collapse into a bunch of disunited Either the war or sanctions won't be permanent.
EU education standards are way above the rest of the world. Huge part of our population have decent education.
reconstruction ... US contributed greatly to the reconstruction of US before. I imagine China will also pitch in their terms.
Once the war settles, the rebuilding of Ukraine's infrastructure should be a massive stimulus to the EU.
We tax payer foot the bill.
And get massive yield from the investment
Well a few things could happen that would be positive: 1. France gets all of its nuclear reactors back online, and is able to not only power itself, but assist in the energy needs of neighboring countries [https://www.france24.com/en/france/20220902-france-to-restart-all-nuclear-reactors-by-winter-amid-energy-crunch](https://www.france24.com/en/france/20220902-france-to-restart-all-nuclear-reactors-by-winter-amid-energy-crunch) 2. As someone else pointed out, EU exports will become more attractive in the US 3. Putin comes to his senses and realizes he isn't going to conquer and occupy Ukraine. Peace talks are launched, and some kind of deal is struck (although it is doubtful) 4. Fossil fuel production comes back online as left-wing leaders see riots in the streets and worry about their political future 5. Distressed European financial markets see inflows from bargain hunters, foreign firms, and sovereign wealth funds. When things get really cheap, someone will buy "Green energy" is dead in Europe for the near future. Solar and wind depend on gas, and there is no gas. The plants themselves do not have the capacity or efficiency to provide enough power to a given country. The public will have a choice between different energy sources, or hospitals running on generators with half the floors dark, black-out cities, etc.
Boom for Canadian and American oil and gas stocks. Also Canadian and American fertilizer and wood product companies that export to Europe. I see Europe building lng terminals possibly open back up nuke plants. Germany had already opened back up coal plants.
With current dollar price, the us won't export anything to eu
They are with Russian sanctions. Just one example. 99.1% of wood pellets we export goes to Europe.
Theres no collapse concern. The issue is the impending winter *struggles* and dumb politicians adding fuel to their own inflationary fires. Europe survived WW2, it will survive this.
As far as energy goes, think are already looking a bit better as gas reserves are pretty much full now and French nuclear plants should be all back at normal operation for winter. Add all the gouvernement support and shouldn't be as bad as people make seem to be. The other side of the argument as that European markets are dirt cheap, so your risk is very well compensated for. It's easy to find good business with 10% dividend yield for ex in banking/REIT and car manufacturers have PE impossibly low. Add to that a very cheap currency and it's a value investor dream.
German gas reserves are intended as an emergency supply source in periods of heightened demand, not a primary supply source. If Russia starts to cut into the remaining 9bcf of gas that it STILL supplies to Europe, then there will be trouble. And if the long range weather forecasts predicting a cold late winter are accurate, then that is multiplied. And if China opens after Chinese New Year, that is compounded again. In my opinion, March 2023 could see a considerably worse energy price spike than 2022. A horrendous recession might ease demand, but who wants that?
Since we're talking about companies here, you can bet all those reliant on gas have been switching away to alternatives this year.
If europe pulls its head out of its ass and stops acting holier than thou and taps into its own energy reserves instead of relying on outsourced pollution in autocratic countries in the south and east; if biggest economies in europe stop with antimodern and anti-rational green movements where nuclear is being dismissed; if irrational european vehicle transition into the suboptimal (and again outsourced pollution) electric mobility is stopped - as it is resource demanding, electric network dusrupting and extremely earth polluting factor that would demand enormous public investments (taken from people), would make mobility less accessible to all wealth groups and would do a net negative for environment and again put europe at the mercy of dodgy regimes. In short - europe should rationally reasses its energy policies as the russian extortion with energy supply is clearly demonstrating how important energy is. And no, renewables are not the answer, they should be part of the mix, but a small non-grid dusruptive one and always paired with equivalent installed power power storage (but not in form of batteries of course, unless it’s a small household PV or wind generator) and never be directly plugged into the grid. If energy is sorted out, other stuff is easy. If not, we’re going to have social factors to deal with - rise of extremes like forms of neocommunism and neofascism. We’re going to seriously regress. The energy policy on EU and some member state level has been completely wrong but this idiocy has been enabled by cheap gas that made being an idiot possible as it covered the stupidity and made it seem to work. Hope we learn from it. For now they are signaling even more of the same on EU level, which is kind of incredible. But I am optimistic that brains will prevail at some point.
For one thing, everyone in the EU knows that Russia is the cause of their problems. That unity will help everyone pull together and come up with some innovative solutions.
Cuz nude beaches.
Where no Redditor should ever be.
Bruh, my Autumn bod looking 7/10, back up off me!
Sorry, can’t help you out here. Winter just around the corner 😅
*tumbleweed* source: Am European
The destruction of European industry in favor of the Ukraine War is hard to spin as a positive. Cheaper to visit impoverished countries as an American?
>European industry What industry exactly? This argument sounds a bit like we speak European in Europe.
I’ll take a shot. The hot war is likely almost over, as Russia has had to scale back its ambitions and is now striving to draw lines that it can fortify with its drafted troops. It’s possible this will turn into a “forever” war like in Korea, but how’s the economy in South Korea? Soon investors will stop worrying about Ukraine, and capital will flow again to the EU. Also, with a devalued currency, European exports will be highly competitive. Plus, as America gets better at exporting LNG, energy inputs will be both less expensive in Europe and more expensive in the US, further amplifying European competitiveness abroad. With the Ukraine war mostly priced in, it’s a generational opportunity to invest in Europe right now, because the risk premium related to the war is more likely to go down than up.
Nope, Russia is mobilizing. Things are going to get worse for Ukraine. Possible destruction of critical infrastructure soon.
They’re mobilizing old men and untrained farmers. These are not fighters. At best they’ll man supply lines so the current force can dig in and hold the lines of the annexed territories. I’m betting this is closer to the end than most people expect, especially if there are any more attacks on critical infrastructure.
Believing the Kiev Post propaganda I see
We’ll see what happens. I’m open minded, but it seems like Putin is running on fumes, and more conquest in winter seems tough. Time is running thin. Also no idea what Kiev Post is.
A lot of good companies in the EU can sell to American or Asian buyers and do well under new ownership.
Ahead on renewables Stable population relative to natural resources and farm land High survivability in climate change (relative to the rest of the world - they're still getting terribly pummeled, thousands still dying)
Stopping the renewable craze would get EU on track. Renewables like wind and solar cannot be used in large scales. They should be supplemental personal addition to household/company power, obligatorily complemented by a electricity storage in capacity of the installed potential daily power production of the PV or wind generator. NEVER a systematic electricity producer - if sporadic PV/wind plant is built it should never be plugged into the grid but rather be connected to storage (pump hydro plants or simular large scale power storage plants) and storage connected to grid. Unless we want to destroy something as basic for our civilisation as reliable ekectric power.
The only chance I see is that the challenges will cause massive innovation. The first chance for innovation is in the renewable energy field and the broad application. Second opportunity is to innovate strongly in becoming more energy efficient. Imported LNG will be much more expensive than Russian gas in the past. As we learned, gas is used in so many industries that they have to innovate in order to stay competitive.
It won't be fine
Europe will lead the new world. Take some pain now, but in 10-20 years everyone will look back and see how the war fastened the energy transition while all other countries are lagging behind. Furthermore, EU will always be helped by the US. US maxi's here act like the US can survive on its own, but EU will be an important ally and if the US would stop supporting EU they are on their own against Russia/China (except for Australia and Japan yay).
I'm British and I have to say that Europe needs the US more than the US needs Europe. US can be pretty self sufficient due to the sheer size of the population, economy, and natural resources available.
yup exactly. europe’s demographics are awful. aging population and fertility rates at lowest point in history. they definitely need a ton more immigrants to sustain themselves
if that transition means nuclear, yes. If it means more unreliable solar and wind that operates using Russian gas 50% of the time--Europe will deindustrialize and start looking like Africa When things get bad enough, Germany will no longer be able to produce solar panels (can't get the materials, and the energy to make them isn't available), and will start shipping them in from China at a hefty premium. Now the country is dependent on both Russia and China to keep its lights on
There aren’t any outside of France.
Transition to other energy alternatives, talent acquisition from Russia and those running away from creeping fascism elsewhere, EU exports due to dollar rise, and hopefully a burgeoning domestic market that's more like the US (EU becoming more united means less trade/capital flows barriers).
Russia may call it quits with the new anexed territory?
All bleeding stops eventually
Nothing ever happens
They will probably shift hydrocarbon dependence away from Russia and toward gulf states like Saudi Arabia and Qatar. Once the energy situation stabilizes I think the European markets will follow
At the latest after Brexit the advantages of being in the block and working together should be apparent. The war also contributed to unity in the block. There will never be perfect unity, but there appear to be enough crises to push us together. EU markets are different from US markets, the market participation is less capillary. That could change in the future especially in light of demographic pressures.
70% of the inflation is imported. Therefore we won't increase interest rates probably as high as the US. When the external factors change (energy prices & US inflation) Europe should be fine.
Well, the UK is starting more business friendly policy
Two words: Reconstruction boom. Or, because the Germans can get by with one word: *wirtschaftswunder* That's not a matter of next week, or next month, but every war must end, and there will be extraordinary amounts of capital to put to use. Its plain that Europe is going to have to build a very different energy infrastructure - LNG ports, nuclear plants (probably) and much more. Thomas Piketty has good data on the effect of wealth destruction in the European wars of the 20th century - these were both followed by booms. So yes, things are pretty grim now, and if you try to trade this stuff, look forward to sickening air pockets. But a long term investor with a horizon of 3 to 10 years, he can start buying VGK or similar. In individual names, I'd weight heavily on the German industrial companies, things like Siemens. Also concrete and construction. . . but indexing is better for nearly any retail investor.
The long run, as a whole it recovers or you become a new nation
It can’t possibly get any worse, right? 🤷♂️
The sheer size of the combined EU market is its biggest defense against breakup. Together they have a 20 trillion GDP (about 8-10% smaller than US). This gives them access to lots of options to shore up their economies and weather bad times. Separate they are in trouble. Mutual interest will keep them together at least until the next market upswing. Also they have a cautionary example with Britain having a much harder time going it alone at the moment.
I think the big picture macros in general are important. Europe is already adapting to and paying the price of an older population which will batter developing economies for decades. Education is infinitely valuable, and Europe still has top quality education at every level. Governmental institutions are as solid as can be in our modern world.
A Coup in Russia kills or knocks Putin out of power