Europe is going through an evolution. Obviously the economic union has forced restructuring in the way governments and companies do business. They are entering a globally competitive world and they have to offer competitive products. With mergers, you will see some real global powerhouses emerging. The danger is that by raising rates too much they could force Europe back into a recession, but I don't think it will come to that.
Japan is another key market.
We have seen a great deal of restructuring after 10 years of economic stagnation in Japan. On a valuation basis, we find Japanese equities quite attractive right now. As government stimulus packages work and interest rates remain low, we are starting to see self-sustaining growth in corporate profitability. We still need to see further efforts on the part of the Japanese government on restructuring. The other big question mark is how soon we will see consumer spending start to pick up strongly.