In early December the European commission presented proposals to help Europe move forward in 2018. It has been a tumultuous few years since the 2007-2008 financial crisis. Southern European economies faltered in the wake of the recession, sparking a European debt crisis that has increased tensions between states.
More troubling for the fate of the European Union has been the rise of populism and nationalism that threatens to break it apart. This culminated in the 2016 Brexit vote. Britain, the second-largest European economy at the time, elected to leave the EU and stirred anxiety among its leaders.
However, the EU has bounced back in 2017. The French Presidential election saw Emmanuel Macron come to power. Macron is an upstart Europhile and his proposed economic reforms have already sparked more investment in France. Germany, the leading European power, continues to churn along at a solid pace. The Bundesbank, Germany’s central bank, has projected GDP growth of 2.5% for 2018.
The European commission has recommended the EU appoint a minister of economy and finance by 2019. After Britain’s exit, European leaders are looking for better integration on economic, defence, and migration policy.
Investors who would like to bet on Europe’s continued resurgence should look to the iShares Europe ETF (NYSE:IEV). The ETF has climbed 21.6% in 2017. Some of its top holdings include Swiss-based Nestle SA and Britain-based HSBC Holdings PLC. The European economy looks poised to build on its momentum in 2018, and this ETF will grow along with it.
