The euro is deeply flawed. During the GFC, the single currency deepened the crisis, and impaired the speed of recovery of real estate markets in Europe.
Within the euro zone, cap rate uncertainty fundamentally reflects, in part, the structural problems of the euro itself. And this uncertainty particularly affects exit cap rate risk, especially for opportunistic and value-add investments. Even so, the euro zone today provides fertile investment opportunities, but only if investors understand the risks that its currency presents.
The euro zone currency union is modeled after that of the US. However, their structures, functions and performances are very different. The states in the US and the nations of the euro zone both feature fixed exchange rates, free capital flows, and no sovereign monetary autonomy. In the US, the states relinquished control over their money supply to the Federal Reserve, whereas each of the nations of the euro zone forfeited monetary control to th
