Europe issues to get worse before getting better: JPMorgan

The newsflow emanating out of Europe is likely to disappoint markets, says Adrian Mowat, Chief Asian and Emerging Equity Strategist, JPMorgan. In an interview to CNBC-TV18, he talks about his expectations from the key summit of Eurozone leaders in Brussels today where European leaders will have a working session followed by a Eurozone summit later in the day.

Unfortunately, Mowat says that the events in Europe are going to disappoint the markets. The last couple of weeks saw newspapers and wires giving out stories about potential agreements. Yet, as the time comes closer, the potential for an agreement is actually weakening which is likely to see further delays on decisions.

In trying to solve Europe, what is required is a central bank that has a growth as well as an inflation mandate. You need a central bank that is willing to help recapitalise banks. You have to get the capital into banks before you agree on a haircut on Greek debt and maybe some of the other peripheral debt.

The European Central Bank (ECB