Word: europeanize
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Dates: during 1990-1999
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...euro will become a serious challenger to the dollar as a medium of global commerce. Although Europe and the U.S. represent roughly similar economic blocs, with comparable populations, incomes and exports, the dollar accounts for 62% of the world's currency reserves, in contrast to 20% for the European currencies, and is used to buy and sell nearly half the world's exports. That's about to change. "There will be a reallocation, because the dollar is currently overused with respect to the size of the American economy," says Bruno Leresche, head of asset management at Paribas, a leading French...
...Already, European officials and business leaders fear that an overvalued euro could hinder their exports, while higher interest rates and slower growth in the U.S. would deprive the world economy of its most dynamic engine. "We all need to see the U.S. growing," says Jean-Pierre Hellebuyck, European equity strategist at insurance group AXA Asset Management. "Europeans can't afford to see the collapse of the dollar...
...biggest winners in all this could be the U.S. investor who bets on the euro's boost to European growth. "For the American investor," says J. Paul Horne, equity-market economist with Salomon Smith Barney in London, "the euro zone will be one of the few places in the world with risk comparable to that in the U.S. and with the kinds of structural changes that we saw in the U.S. over the past five years: balanced budgets, increased competitiveness, productivity gains...
...moment, shares of European companies are priced as bargains, relative to those of American firms with comparable earnings growth. But the European market is likely to boom as new money flows in. And the probability of a weakening dollar means Americans who move money into Euroland now might lock in exchange-rate profits. "There is a case for diversifying your portfolio into a currency area that provides an alternative to the U.S.," says Merrill Lynch's Bowers. "But there's no shortcut: you still have to find good companies." In the current European climate, the most promising sectors include consumer...
...stocks account for nearly half the equity value in Europe. Leresche's advice: "Choose a fund that has euro-denominated investments but a Europe-wide view." He recommends the Luxembourg-based Parvest fund, which boasts relatively low fees, superior long-term performance and stable management. Other experts on the European market recommend Fidelity's Europe fund, the Lipper Premium Euro Equity Fund and the Scudder Greater Europe Fund...