Flatlining growth and youth unemployment threaten Europe, EPRA delegates hear

The IMF is reporting positive global growth but this isn’t coming from Europe which has flatlined, according to Ian Shepherdson of Pantheon Management at this year’s EPRA conference, being held in London.

Deflation fears are now forcing the European Central Bank to act and start putting money into the economy, he added.

While capital markets are open for business, European banks are not increasing their lending fast enough, and with about half of Europe’s businesses set up as small and medium enterprises which are largely bank lending dependent, this could cause problems for listed real estate companies which rely on them for income as tenants.

This situation isn’t going to change any time soon, he predicted, adding that a strong US recovery isn’t going to fix the Eurozone’s problems. 'The biggest existentialist threat to the Eurozone is not the reforming periphery, it’s France. The country has made no effort to make structural reforms or regulate its employment laws,' he said.

Speaking alongside Shepherdson, Amlan Roy of Credit Suisse gave an alternate viewpoint: 'The biggest threat to Europe: youth unemployment. Technology has taken jobs away and we think Europe can sort out its problems with monetary policy, but we can’t. We need well-balanced monetary and fiscal policies.'