Cover of MoneyWeek magazine issue no 769, 20 November 2015

France at war

19 November 2015 / Issue 769

The political fallout of the attacks in Paris is likely to be huge – but what does the upheaval mean for markets and economies? John Stepek explains. Read this week's cover story here.

• Do not invest in these rip-off funds
• The new space race has already begun
• Britain’s appalling pensions apartheid

Not a subscriber? Sign up now



John Stepek

Europe in crisis

Terrorist attacks, like natural disasters, are horrific wherever they occur. But when it happens closer to home, as with last week’s Paris attacks, it’s only human to feel the loss and the pain, and the fear of your fellows more keenly. That’s one reason why the Paris attacks have had such a huge impact in the West at a time when the number of deaths globally from terrorism has been soaring in countries like Nigeria and Syria. But beyond that, do the Paris attacks have any more significance for the economy and for markets than, say, the Madrid bombings in 2004 did? Or the London bombings of July 2005?

I look at the issue in our cover story this week, but the short answer is that, while markets usually treat terror attacks in a similar way to natural disasters – a brief spasm of fear and uncertainty, before a return to business as usual – I don’t think it’ll be quite the same this time. That’s not because of the nature of this attack itself, awful as it was – it’s more because of its timing, and the knock-on impact it has in highlighting the deep structural problems that are already putting Europe’s governance under incredible pressure.

At the start of 2015, mention Europe and all that anyone could talk or think about was Greece and how terrible it would be if the country ended up leaving the single currency. That crisis alone demonstrated how difficult it is for Europe’s institutions to unite to resolve what by most standards should have been a relatively simple dispute between close partners on how to deal with another troubled partner whose problems were years in the making and obvious for all to see.

Now, in the face of mass migration from Syria and beyond – which is a hugely complex issue, requiring serious planning and organisation to either stem the flow, or to help migrants settle and integrate, or both – Europe is stuck with a genuine crisis and it is clear that it simply doesn’t have the tools or the ability to cope.

• Read the full editor’s letter here: Europe in crisis