Rajoy’s proposal of fiscal integration should be the aim of all Europe

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By Tania Suárez, in Madrid | Most financial commentators have focused its attention on the comments that the Spanish president Mariano Rajoy made last Saturday. He emphasized the importance of creating a European body whose main objective would be to control of the finances of the different States, i.e. a fiscal integration. According to macroeconomic experts at Morgan Stanley, such measures of fiscal integration should be the aim of Europe to really get out of the current crisis.

From Morgan Stanley, they explain that measures such

as the long term refinance operation and the intervention of the European Central Bank are mainly for the short term. Analysts also say that those measures may improve the feeling in the short term, but they will not solve the problem in the medium/long term.

Morgan Stanley reiterated their negative perspective for equity. The market valuations (Europe is at 9.2x PE for 12 months) and the current feeling levels are becoming more attractive. However, these experts are still worried about the macro-economic slowdown, and also about the European political situation.



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