Europe ETFs: Focusing On Economic Reforms | ETF Trends

Reforms in the European Union’s economic system have come to a standstill after new problems emerged in some member states. Politics there are shifting right, but will these politicians aid the economy and related exchange traded funds (ETFs)?

E.U. economics commissioner Olli Rehn stated that they will “propose a legislative package which will include credible enforcement mechanisms based on two principles: sanctions will need to be semi-automatic and they will need to be triggered early enough in the process so they are essentially preventive,” reports Arthur Beesley for The Irish Times. However, member states can’t come to an agreement on how to implement the reforms. [Europe ETFs: The Cup is Half-Full.]

The OECD has issued a statement that the Portuguese government should reduce its budget deficit since the higher borrowing costs may hamper economic recovery. Additionally, political instability in Belgium is eating away at market confidence in the country as the country is still unable to form a government since elections. [An ETF Play for a Struggling Europe.]

The current political climate in Europe is starting to lean more toward the right as economic uncertainty grips the continent, writes Michael D. Mosettig for PBS NewsHour. So far, the more conservative elections trend can be seen in the Hungarian, Latvia and the Czech Republic, with conservatives campaigning on austerity, while Socialist parties are seeing a drop in their numbers.

The conservatives want to break off talks with the International Monetary Fund and rely more on their own domestic reforms, while others are objecting to payments into rescue packages for Greece and other weaker E.U. economies.

For more information on Europe, visit our Europe category.

  • iShares S&P Europe 350 Index Fund (NYSEArca: IEV)
  • PowerShares FTSE RAFI Europe Portfolio (NYSEArca: PEF)
  • Vanguard Europe Pacific (NYSEArca: VEA)

Max Chen contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.