Reasons why the EU and its the greater european region has good prospects and the Asian mirage is heading for a fall

If you read the financial press there is currently an obsessive focus on the problems of europe, the invincibility of China, with the US assumed to be part of the winners club of nation. This is a myopic vision. For one high commodity prices will be a permanent bugbear of China that will put an ever increasing strain on its growth. Basically Chinese growth has peaked and will continue to fall gradually. China will end up in slow growth before achieving anything like first world status. Its extreme demographics are also harbingers of possible unrest with massive implications for investors there. Asian growth is based on

Andrea Moneta, chief executive of Aviva a huge insurance conglomerate, argues that most people continue to underestimate the potential of Europe and tend to forget that it is by far the world’s largest market for financial products. Europe and its financial backyard such as Russia included, has a population of more than 800m people and is growing. About 40 per cent of the world’s personal wealth is held in Europe. Europeans have personal financial assets of $62,000bn and this is expected to increase by a further $12,000bn during the next five years. And 13 per cent of Europeans’ wealth is invested in life assurance and pensions.

Aviva expects life assurance and pension assets currently totalling $8,100bn in Europe to grow by $1,700bn in the next five years, outstripping other regions such as North America and Asia.
Europe is thus not only a huge market with promising growth opportunities but has the added advantage of a stable regulatory environment, says Mr Moneta, who before joining Aviva 18 months ago was a senior executive at UniCredit. In terms of political, regulatory and even currency risks, Europe still enjoys a lower risk profile than many other regions round the world. All in all, says Mr Moneta: “We see Europe as a good growth story without taking big bets in Asia.”

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