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France won’t be the next casualty of the Eurozone crisis.

Though it’s teetering in some respects, it’s still one of the pillars of the European Union, says Luc de la Durantaye, vice-president of global asset allocation for CIBC Asset Management. He manages the Renaissance Optimal Inflation Opportunities Portfolio.

He adds the country’s civil servants are key players in developing European policy.

Read: France promises businesses $25-billion tax break

“Germany and France are leading the changes in Europe,” says de la Durantaye. “From that perspective, there’s still confidence France will take measures to consolidate its finances.”

In fact, it recently unveiled a competitiveness pact designed to help address its fiscal woes.

Read: France proposes 75% income tax

De la Durantaye says the European Central Bank’s open-market purchase seems to have acted as “a deterrent for speculators in Europe to push sovereign bond yield spreads higher.”

And despite a lot of skepticism in some quarters, he’s seen “spreads between French, Spanish, and Italian bond yields come in relative to German. The absolute level of yields has also continuously declined in Spain, Italy, and France.”

Read: Investors focus on Spain

Though the situation in Europe remains challenging—due to the need for debt reduction in a low-growth environment—de la Durantaye is confident the global landscape will start to improve in coming years.

He says the measures in place are working, but warns they’ll “muddle towards a resolution and it’ll take time.”

Read:

Austerity makes old valuations useless

Global recovery to remain polarized

8 reasons to believe in the Eurozone

Will a banking union save the Eurozone?

The Eurozone won’t collapse

Eurozone should adhere to strict conditions before ECB buys bonds

Good news out of Europe…for once

France’s left turn wreaks havoc on markets

Originally published on Advisor.ca

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