Good level of business activity and net income, in a context crisis

Unprecedented times. The global outbreak of Covid-19 has brought the world and its economy to a standstill, highlighting the importance of sustainable and resilient infrastructure (healthcare, water, power, telecommunications). Countries with fragile infrastructure have less capacity to handle crises, so they will need to increase their infrastructure investments. This is especially crucial in the context of health security and rapid urbanisation.

The agreement reached among EU leaders at the end of the longest European Council in history regarding a comprehensive package worth €1,824bn – including the Multiannual Financial Framework (MFF) and the Next Generation EU (NGEU) instrument – is a significant achievement and a net positive in the short term for EU assets.

A brief overview of our analysis on the effects of the Covid-19 crisis on the global economy and on investment opportunities. 

The Conference on the Future of Europe, planned earlier this year, will probably open in September in a very different context than initially expected. Who will chair it and whether a new treaty for the union will be on the agenda remains unclear, but the need to address repositioning Europe post the Covid-19 pandemic is clear. Indeed, the EU is suffering from a risk of fragmentation along several lines that could deeply undermine its ability to deal with the challenges to be seen in the next decade. The asset purchase programs (APP) of the European Central Bank, the emergency package via the ESM, and now the European Commission (EC) proposal ‘Next Generation EU’ are powerful tools to address these risks.

Weekly update from the investment teams on our Best Ideas and Flagship funds