Alexandre Drabowicz: «The Perception of Europe is Changing»
With serious reforms underway in Europe, the global investor view on the region has seen the most significant improvement in recent times, according to Indosuez Wealth Management’s Alexandre Drabowicz, including from Asia.
Developments in Europe – most notably the historic constitutional amendment to Germany’s fiscal rule, which includes the addition of 500 billion euros ($587 billion) in infrastructure spending – have attracted a lot of positive attention in 2025. According to Indosuez Wealth Management’s chief investment officer Alexandre Drabowicz, global investors, including those in Asia, are rethinking the region.
«Since the war in Ukraine, Europe was uninvestable for many, many global investors. This is changing. The perception of Europe is changing,» Drabowicz said in a recent media luncheon attended by finews.asia.
«The first time when came to Asia two and a half years ago, the instruction was don’t talk about Europe. That is changing. We had a client lunch and we started to get real questions about Europe. So now, people start to think, well, maybe this time is different.»
Boost to Economic Growth
The effects of Germany’s infrastructure plans on European growth are expected to commence in 2026. While Indosuez has revised growth forecasts in other major economies like the US and China downwards in December 2024, it made an upward revision in the EU where it expects a 1.2 percent GDP increase in 2025 and a 1.4 percent increase in 2026, up 40 and 20 basis points, respectively.
«There is a kind of wake-up call happening in Europe. I wouldn't say we are overenthusiastic, but we are definitely warming up,» Drabowicz caveated, highlighting the lack of a single universal system on the continent.
«We said the only thing missing in Europe is what we call the savings and investment union because the financial markets remain fragmented. It's 27 countries. It's 27 markets. 27 regulators.»
Alternative to US Assets
In addition to pull factors from Europe, there are also push factors from the US driving investor interest, including concerns about the ongoing weakening of the dollar. At Indoosuez, the French private bank has a target of 1.25 for EUR/USD in 2026 and a continued positive view on gold.
«A lot of global investors want to be less dependent on the US, they want to be less dependent on the US dollar and they are looking at alternatives,» Drabowicz explained. «It's not to say that they are going to sell US. What they have in the US they will keep but their new investments will have to be more diversified.»
Despite improved investor sentiments, the bank has turned neutral on European equities as it believes the market has run its course for the time being. It is positive on emerging market equities due to tailwinds from a weaker US dollar. In fixed income, it finds emerging market debt in local currencies attractive, especially for US dollar investors.
