Given the outlook for long-term interest rates, how resilient is the valuation of European equities to a slowdown in euro-zone growth?

We believe there will be a "Japanisation" of the euro zone: for several cumulative reasons, euro-zone long-term interest rates will remain low for a long time. We therefore raise the following question: given this outlook for long-term interest rates, how resilient is the valuation of European equities to a slowdown in euro-zone growth? We show that in principle, the valuation of European equities should weather a decline in euro-zone growth down to 0%.