After years in the doldrums, as evidenced by the recent bout of purchasing managers’ indices Europe is showing some signs of macroeconomic recovery, leading to a welcome boost in sentiment for European stock markets and strong investment performance in the year to date. The fact remains, however, that the region remains beset by relatively poor growth dynamics compared with the rest of the developed world.

This year's share price recovery could easily herald a false dawn. A big problem is that Europe has a long way to travel to address problems in its banking sector, which remains undercapitalised, hampering credit formation, hence economic growth.