Be that as it may, no one – Mr Tenerelli included – thinks European countries, particularly those among the hardest hit, like Spain, will simply bounce back and revert to some pre-crisis ‘norm’ any time soon, if ever. There is still much work to be done and while Mr Tenerelli heaps praise on Angela Merkel – “I think she deserves a Nobel Prize for holding this thing together” – the pragmatist continues to see weak spots in Europe.
Greece, for example, is likely to require further EU funding and continues to have a “precarious regulatory framework in many industries”, he says. Noting, with a rueful chuckle, that he has lost money on Greek stocks, Mr Tenerelli says he continues to be “very sceptical” about the investment case for Greek equities. He has also been tentative about Italian stocks because, as he sees it, while “the Spanish were pushing through a lot of reforms, the Italians were dragging their feet and there’s a lot of political uncertainty”. That said, from a bottom-up perspective, there are some “very decent” Italian companies, which have continued to thrive during 50 years of chaotic government rule, he says.
It is perhaps through the lens of such tenacious companies that Mr Tenerelli rejects the notion that Europe is halfway through a so-called lost decade of economic growth. He points to Scandinavia, the Netherlands and Germany as being “tremendously competitive in the past decade” and suggests the reforms undertaken by countries such as Spain, France and Italy are at least tackling the structural economic problems they face, unlike the US.
Paraphrasing his hero, Angela Merkel, Mr Tenerelli says Europe accounts for a quarter of global GDP but has to finance 50 per cent of global social spending. “If we want to maintain that spend and our social system and be competitive in world markets, we have got to work like hell,” he says, “and that’s the reality, right?”
