Introduction

Cyclical recovery or secular healing?

That’s the big question behind the European Union’s economic bounce after its ‘lost decade’: the toughest period since its inception in 1957.
Last year, its economy finally joined the growth party as part of the most synchronised global expansion since the 2008 financial crisis. It lifted the spectre of secular stagnation, manifested by spiralling debt, runaway deficits, ageing demographics, rising unemployment and anaemic growth.

The 2016 Brexit result was a vote of no confidence on the part of one nation’s citizens. Such an anti-globalisation backlash has been vivid in other member states too; as is the distrust of politicians and political institutions.
Anti-migration sentiment has been all too virulent – as shown by the latest election results in some member states.
However, with the recent economic revival, there is some anticipation that the EU’s political and business leaders will take action to create fresh dynamism to improve business competitiveness and citizens’ wellbeing.
For European pension plans, this is an important issue: the majority of them tend to have a strong home-region bias in their investment choices.