Hi. We're here with Carl Tannenbaum, chief economist of Northern Trust. Carl, great to see you.
Good to be with you.
There was concern going into the year of the elections in Europe, and the effects that might have on markets. Was that much ado about nothing?
There certainly was a lot of attention to the series of elections that we've had in Europe so far in 2017. The concern was is that, after outcomes in the Brexit voting and here in the United States, that populist movements, who are hostile to trade, to commerce, and to immigration, would win the day, and turn Europe away from its core principles. Fortunately, the balloting in both Holland and France turned in the other direction. And so the future looks a little brighter.
Is there anything on the horizon that might bring that populist movement and concern back to the forefront?
We're not completely out of the woods. The Italians will have to go to the polls sometime in the next year. Their economy has been faltering, and they do have a very strong populist party that could garner a lot of attention. But more fundamentally, the forces that led to the rise of populism elsewhere are still there. Income inequality, concern about trade and immigration. And these are still things that European policymakers will have to address.
Meanwhile, how has the European economy been doing amid all this concern?
This is a great lesson in the resilience of both markets and economic actors. While all of this political hullabaloo is going on, we actually had very good economic results. Leading indicators are looking good. And in addition, market performance, equity market performance, across Europe has been far better than most people expected.
Any challenges ahead for the economy in Europe?
Well, certainly the Brexit negotiations, which involve both the United Kingdom and the continent of Europe, are going to be heating up. The initial volleys have been very, very acrimonious. And you still have a persistent problem with indebtedness, especially among the southern European countries. The northern Europeans are going to have to come together with a lasting solution so that that debt and the European experiment proves sustainable.
Carl, thanks for your time.