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Alan Brown: The future of the eurozone

Alan Brown believes that it is incumbent on guardians of other people’s money to be nimble and react to changing data and the evolution of markets. Tactical moves are as important as long-term strategy and sentiment; cussedness or the rigid adherence to any set of beliefs have little role to play in making investment decisions. In spite of this, it is possible to detect a hint of schadenfreude when Brown talks about the current woes of the eurozone. Since before the introduction of the single currency in 1999, he has been unwavering in warning that imposing a one-size-fits-all monetary policy on Europe’s diverse economies would entrench imbalances and eventually wreak economic havoc.

Having got the prognosis right, he now believes the ills afflicting the periphery are so intractable that there are only two possible cures: an accelerated move to full fiscal and political union, or a redrawing of the eurozone with several countries quitting the single currency.

Bond yields on peripheral debt are back at levels not seen since the period of pre-single currency convergence in the 1990s.