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Inside investment: Learning to love the euro

Eurozone stress has been felt most acutely in the so-called periphery, but investors should look at the core of the European Union.

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Five hundred years ago Martin Luther nailed his ‘Ninety-Five Theses’ to the door of All Saints’ Church in Wittenberg. The good people of this modest city in Saxony could not have known that this act by a troubled Augustinian friar would convulse Europe for centuries. Luther’s complaints in 1517 against the excesses of contemporary Catholic practice marked the start of the Protestant reformation. 

The Thirty Years War that followed engulfed almost every nation on the continent, but most of the pain was inflicted on Germany. Some populations in its city states were decimated. After two more catastrophic wars in the 20th century, all Europeans should be thankful that current German politics is rather staid. There are no former clowns, serial philanderers, crypto fascists or reality TV personalities leading political parties with any chance of power. 

The federal elections in September pit Angela Merkel, a chemist by training, against Martin Schulz, a former bookseller. Schulz’s most recent job has been president of the European parliament. Of late European elections and ill-conceived referendums have been the triggers for investors to signal their concerns about the prospects for the euro.