Europe's new economy
forecast 2001
New connection
In what has betome a tradition for Rabobank close to year-end, our economie fore-
cast for the coming year was presented on 12 December. In the wake of the Nice
summit, the focus on Europe and the new euro-economy was timely. What's News
offers a very brief overview of our forecast for 2001
Euro focus
Competitive landscape
ICT advance
i
What'sNewS Issue 8- December 2000
the panel: Neervens, Smits, Van den Goorbergh and Mol
Few financial institutions stick
out their necks and publish
their take on what is happening in
the world economy. Rabobank is
one of those rare exceptions. Every
year, it publishes a so-called Fore
cast, which was originally a Dutch
publication, with heavy focus on
the Netherlands (for obvious rea-
sons). In recent years, however, Hung
Tran and his team have come up with a
sister publication which takes in global fi
nancial markets. It now appears alongside
the Dutch report generated by Wint Boon
stra and his people.
Presented by deputy chairman of RN,
Wint van den Goorbergh, our Forecast for
2001 is mixed. Says Van den Goorbergh,
'we're expecting a slowdown in growth
worldwide, but fundamentais are healthy.
We also believe the euro will continue to
recover ground against the dollar. Infla-
tion should decline gradually and we're
further expecting a reduction of interest
rates in both the US and FiMU bloc.' On
Europe, the bank is less bullish. According
to Van den Goorbergh, 'Europe is still in-
stitutionally unprepared for expansion. In
our view, additional convergence criteria
are needed before new countries join the
EU and enter EMU. The Maastricht crite
ria were never intended for econonties that
could be described as "emerging mar
kets".' Rabobank is more positive about
the currency itself. 'The euro may be un-
dervalued against the dollar,' he says, 'but
already it has more than earned its keep.
The complete lack of volatility on Euro-
pean capital markets and the lack of rnon-
etary tension within the EMU bloc speaks
volumes.' On the down side, the euro's de-
preciation on currency markets have done
little to bolster the European Central
Bank's image. 'Obviously,' he says, 'there's
room for improvement.'
The Forecast presentation is always well
attended, especially by clients. lts attrac-
tion as an event has everything to do with
the fact that it is more than a 'photo op-
portunity' for Rabobank. Guest speakers
of considerable calibre are always part of
On 27 November, RI's unique Inter
net Treasury Portal, the RaboTrea-
suryWeb, went live. On offer to RI's cor-
porates, the new site meets clients'
corporate treasury information needs
real-timc and online. Features include:
real-timc currency rates
real-time interest rates
the latest news front the financial
markets
research analyses from the specialists
in RI's dealing roont
easy web access to RI's Internet-
trading application RaboDealAs-
sist.
Through RaboDealAssist, corpo
rate clients can trade foreign ex-
change and ntoney market products
over the web. Traded products are:
FX spot
FX forward
FX swap
loans
deposits
the program. The new economy focus this
year meant both 'old' and 'new' were rep-
resented on the panel. ABP (one of the
world's top pension funds) chairman John
Neervens and Jerome Mol, CEO of Go
rilla Park, which funds and support high
tech start-ups, both spoke on the possibil-
ity of a potential 'golden age' for Europe.
The recognition that technology, and
specifically ICT, will bring about change
in every aspect of life was the hot issue.
According to Mol, Europe is still running
behind the US, but the competitive land
scape is improving dramatically. No less
than EUR 12 billion have been invested in
high-tech start-ups alone in the FiU this
year. 'One of the reasons is that Europe's
success in technology is bringing about an
immense change in mentality,' he says.
'Once, the US led the world in developing
new technological applications. Today,
you just have to look at the forerunner in
ICT advances - mobile communication -
and you see that European companies lead
the field.' His presentation and the subse-
quent discussion had little to do with re-
gional chauvinism. It is all about a sense
of urgency and purpose that will carry Eu
rope through a period of transition to a
European single currency and beyond.
For more information on the Forecast
and Visie op 2001contact either Hung
Tran in London or Wint Boonstra in
Utrecht.
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