As the euro’s value sinks, the dollar-euro parity could affect your plans: whether you are investing in foreign markets or just planning a spring vacation in the south of France.
The strong greenback against plunging euro prices means there could soon be a one-to-one exchange rate between the currencies. And the magical state of parity is a significant marker not only because it reduces the cost of exchanging money—but also because it is a rare occurrence.
The last parity moment was in November 2002. Parity also occurred when the euro was introduced in 1999, and in 2000. So why now? The two currencies getting cozy signifies an ongoing trend in changing money supplies and disparate central bank policies between the United States and the European Union.
Read more at:
Dollar-euro parity: What a one-to-one exchange means
Showing posts with label euro. Show all posts
Showing posts with label euro. Show all posts
1/1/22
Euro banknotes are set for their first full redesign in 20 years
The European Central Bank (ECB) will select a new design for euro banknotes by 2024.
The eurozone currency was first introduced in 1999, with coins and banknotes being launched in 2002.
"After 20 years, it’s time to review the look of our banknotes to make them more relatable to Europeans of all ages and backgrounds," ECB President Christine Lagarde said in a statement.
Read more at: Euro banknotes are set for their first full redesign in 20 years | Euronews
The eurozone currency was first introduced in 1999, with coins and banknotes being launched in 2002.
"After 20 years, it’s time to review the look of our banknotes to make them more relatable to Europeans of all ages and backgrounds," ECB President Christine Lagarde said in a statement.
Read more at: Euro banknotes are set for their first full redesign in 20 years | Euronews
12/1/20
Euro area annual inflationstable at -0.3%
Euroareaannual inflationis expected to be-0.3% in November 2020, stable compared to Octoberaccording to aflashestimate from Eurostat, the statistical office of the European Union.Looking at the main components of euro area inflation,food, alcohol & tobacco is expected to have the highest annual rate in November (1.9%,compared with 2.0% in October), followed by services (0.6%, compared with 0.4% in October),
non-energy industrial goods (-0.3%, compared with -0.1% in October) and energy (-8.4%, compared with -8.2 in October.
Read more at: 2-01122020-AP-EN.pdf
Read more at: 2-01122020-AP-EN.pdf
8/7/20
USA: Trump White House Accelerating Toward a Dollar Crisis
Trump
administration is considering the expansion of the trade war to
finance, which could destabilize the US dollar and derail the
post-pandemic global economy.
After its failure in the COVID-19 containment and the expected -53 percent plunge of real GDP growth in the 2 quarter, President Trump’s re-election campaign is in serious trouble. To deflect the blame, his administration has launched a series of provocative measures against China thereby fueling elevated bilateral tensions.
Worse, the White House is reportedly considering moving from a bilateral trade war to an effort to exclude China from the dollar-denominated international payment network. In Beijing, that would be seen as the weaponization of the US dollar.
Created in Brussels in 1973 – after the rise of US deficits, weaker US dollar, and its decoupling from the gold standard – the dollar clearing and settlement system (Society for Worldwide Interbank Financial Telecommunication, SWIFT) is ostensibly a non-profit organization. Yet, its first CEO was a former executive of American Express and its data centers are in the US, Netherlands, and Switzerland.
According to critics, the SWIFT’s status changed after 9/11, when the Bush administration, true to its unipolar stance on US security and defense, seized the payments network as an added tool in “coercive diplomacy.” In the Trump era, coercive diplomacy has been expanded in US economic engagements.
In the interdependent global economy, international trade and finance are two sides of the same coin. Cross-border trade transactions rely on an effective international payments system and a robust network of financial institutions issuing credit.
That infrastructure remains built around US dollar, which the Trump administration would like to leverage to contain China’s rise.
In the postwar era, the Japanese yen's might peaked in the mid-1980s, when Tokyo agreed to a managed trade deal in New York City's midtown Plaza Hotel. The controversial pact led the US, France, West Germany, the UK and Japan to depreciate US dollar relative to the Japanese yen and Deutsche mark by intervening in the currency markets.
Through the Trump years, China has resisted protectionism and trade wars. But as a defensive measure, Beijing may now be forced to prepare against the risks of being cut off from the US dollar payment system.
Under the US dollar payment system, China remains vulnerable to potential US sanctions.
As long as China holds $1.1 trillion in US treasury bills and large investments that remain denominated in US dollars, exposure remains high. Over time, Beijing can diversify away from some of these bills and investments, while internationalization of the renminbi would reduce reliance on the US dollar.
China is preparing for currency swap facilities as part of the Belt and Road Initiative (BRI) and in the Regional Comprehensive Economic Partnership (RCEP) with many Southeast Asian countries.
Similarly, according to a recent report, sovereign wealth funds expect China to remain in the economic driving seat, despite the Trump administration’s cold wars.
Thanks to the long-term potential of Chinese economy and finance, renmibi’s role as a global reserve currency and its rising attractiveness for international transactions, the time is right for accelerated internationalization. As China is now the first major economy to defuse the COVID-19 impact and is rebounding, global demand for renminbi assets is rising.
Read the full report at:
Trump White House Accelerating Toward a Dollar Crisis
After its failure in the COVID-19 containment and the expected -53 percent plunge of real GDP growth in the 2 quarter, President Trump’s re-election campaign is in serious trouble. To deflect the blame, his administration has launched a series of provocative measures against China thereby fueling elevated bilateral tensions.
Worse, the White House is reportedly considering moving from a bilateral trade war to an effort to exclude China from the dollar-denominated international payment network. In Beijing, that would be seen as the weaponization of the US dollar.
Created in Brussels in 1973 – after the rise of US deficits, weaker US dollar, and its decoupling from the gold standard – the dollar clearing and settlement system (Society for Worldwide Interbank Financial Telecommunication, SWIFT) is ostensibly a non-profit organization. Yet, its first CEO was a former executive of American Express and its data centers are in the US, Netherlands, and Switzerland.
According to critics, the SWIFT’s status changed after 9/11, when the Bush administration, true to its unipolar stance on US security and defense, seized the payments network as an added tool in “coercive diplomacy.” In the Trump era, coercive diplomacy has been expanded in US economic engagements.
In the interdependent global economy, international trade and finance are two sides of the same coin. Cross-border trade transactions rely on an effective international payments system and a robust network of financial institutions issuing credit.
That infrastructure remains built around US dollar, which the Trump administration would like to leverage to contain China’s rise.
In the postwar era, the Japanese yen's might peaked in the mid-1980s, when Tokyo agreed to a managed trade deal in New York City's midtown Plaza Hotel. The controversial pact led the US, France, West Germany, the UK and Japan to depreciate US dollar relative to the Japanese yen and Deutsche mark by intervening in the currency markets.
Through the Trump years, China has resisted protectionism and trade wars. But as a defensive measure, Beijing may now be forced to prepare against the risks of being cut off from the US dollar payment system.
Under the US dollar payment system, China remains vulnerable to potential US sanctions.
As long as China holds $1.1 trillion in US treasury bills and large investments that remain denominated in US dollars, exposure remains high. Over time, Beijing can diversify away from some of these bills and investments, while internationalization of the renminbi would reduce reliance on the US dollar.
China is preparing for currency swap facilities as part of the Belt and Road Initiative (BRI) and in the Regional Comprehensive Economic Partnership (RCEP) with many Southeast Asian countries.
Similarly, according to a recent report, sovereign wealth funds expect China to remain in the economic driving seat, despite the Trump administration’s cold wars.
Thanks to the long-term potential of Chinese economy and finance, renmibi’s role as a global reserve currency and its rising attractiveness for international transactions, the time is right for accelerated internationalization. As China is now the first major economy to defuse the COVID-19 impact and is rebounding, global demand for renminbi assets is rising.
Read the full report at:
Trump White House Accelerating Toward a Dollar Crisis
5/18/20
EU - Coronavirus latest: France, Germany propose vast recovery fund
Angela Merkel and Emmanuel Macron propose a major European rescue fund, to come from an increased long-term EU budget
Read more at:
Coronavirus latest: France, Germany propose vast recovery fund | News | DW | 18.05.2020
Read more at:
Coronavirus latest: France, Germany propose vast recovery fund | News | DW | 18.05.2020
3/23/20
Europe Is Unprepared for the COVID-19 Recession by Yanis Varoufakis - by Yanis Varoufakis
The Eurogroup of eurozone finance ministers is struggling to agree on a
macroeconomically significant coordinated fiscal response to the
enormous recessionary effects of the COVID-19 pandemic. The result, I
fear, will be heroic announcements heralding impressive numbers that
disguise the irrelevance and timidity of the agreed policies.
The first indication of this comes from the recent announcement of the German government’s financial aid package to the private sector. While the international media referred to it as a €550 billion ($600 billion) bazooka, close inspection suggests it is no more than a water pistol.Comprising tax deferments and large credit lines, the German package reveals a serious misunderstanding of the nature of the crisis.
And it is the same misunderstanding that turbocharged the euro crisis a decade ago. Now, as then, companies and households are facing insolvency, not illiquidity. To arrest the crisis, governments must go “all in” with stupendous fiscal expansion. But that is exactly what the German package was meant to avoid.
Finance ministers from countries in deeper economic trouble than Germany (for example, Italy and Greece) will undoubtedly try to push for the necessary fiscal expansion. But they will hit the brick wall of opposition from the German finance minister and his loyal supporters within the Eurogroup.
Soon the “southerners” will fold their tent, their acquiescence sealing yet another fiscally insignificant Eurogroup package that the oncoming recession will steamroll.How can I be so sure?
Because I’ve been there. I represented Greece at the Eurogroup meetings in 2015, where the defeat of our government’s desperate struggle to avoid more loans at the expense of deeper recession was decided. The methodical manner in which those Eurogroup meetings closed down any avenue to a rational debate on the appropriate fiscal policies holds the key to understanding why the Eurogroup will also fail to mount an effective fiscal defense against the pandemic-induced shock.
One insight from those crucial Eurogroup meetings five years ago stands out: any finance minister from a struggling country who dares oppose the Berlin line, or to propose solutions that benefit the majority of Europeans rather than the financial sector, is in for a hard ride.
Read more at: Europe Is Unprepared for the COVID-19 Recession by Yanis Varoufakis - Project Syndicate
The first indication of this comes from the recent announcement of the German government’s financial aid package to the private sector. While the international media referred to it as a €550 billion ($600 billion) bazooka, close inspection suggests it is no more than a water pistol.Comprising tax deferments and large credit lines, the German package reveals a serious misunderstanding of the nature of the crisis.
And it is the same misunderstanding that turbocharged the euro crisis a decade ago. Now, as then, companies and households are facing insolvency, not illiquidity. To arrest the crisis, governments must go “all in” with stupendous fiscal expansion. But that is exactly what the German package was meant to avoid.
Finance ministers from countries in deeper economic trouble than Germany (for example, Italy and Greece) will undoubtedly try to push for the necessary fiscal expansion. But they will hit the brick wall of opposition from the German finance minister and his loyal supporters within the Eurogroup.
Soon the “southerners” will fold their tent, their acquiescence sealing yet another fiscally insignificant Eurogroup package that the oncoming recession will steamroll.How can I be so sure?
Because I’ve been there. I represented Greece at the Eurogroup meetings in 2015, where the defeat of our government’s desperate struggle to avoid more loans at the expense of deeper recession was decided. The methodical manner in which those Eurogroup meetings closed down any avenue to a rational debate on the appropriate fiscal policies holds the key to understanding why the Eurogroup will also fail to mount an effective fiscal defense against the pandemic-induced shock.
One insight from those crucial Eurogroup meetings five years ago stands out: any finance minister from a struggling country who dares oppose the Berlin line, or to propose solutions that benefit the majority of Europeans rather than the financial sector, is in for a hard ride.
Read more at: Europe Is Unprepared for the COVID-19 Recession by Yanis Varoufakis - Project Syndicate
1/24/20
Global Economy: Global stocks steady as caution on China virus continues; euro hits seven-week low after ECB announcement
Stocks made a barely positive start in early Asian trade on Friday after
the world's health body called it a little too early to declare a
coronavirus outbreak a global emergency.
Read more at:
https://uk.reuters.com/article/us-global-markets/global-stocks-steady-as-caution-on-china-virus-continues-euro-hits-seven-week-low-after-ecb-idUKKBN1ZN02O
Read more at:
https://uk.reuters.com/article/us-global-markets/global-stocks-steady-as-caution-on-china-virus-continues-euro-hits-seven-week-low-after-ecb-idUKKBN1ZN02O
7/12/19
Italy: Will Matteo Salvini wreck the euro?
HE’S ALMOST here...he’s arrived! He’s arrived!” bawls the mayoral candidate, as a sea of blue and white flags declaring Prima L’Italia,
Italy First, wave in the summer evening air of the ancient Umbrian hill
city of Orvieto. And as the cheers and the shouts of “Mat-te-o!
Mat-te-o!” swirl around the medieval buildings, the man the crowd is
really here to see walks onto the stage: Matteo Salvini in chinos and an
open-neck shirt, sleeves rolled up, slightly tubby, as ordinary-looking
as any of the adoring fans jammed into the little square.
They call him Il Capitano. No Italian can fail to hear an echo of Mussolini’s nickname, Il Duce. Critics see neo-fascist overtones everywhere—from the fact that Mr Salvini recently published a book using a publishing house with links to a far-right outfit, CasaPound, to the observation that he has been seen in a jacket made by a designer the CasaPounders favour. His personality cult, driven by dozens of daily tweets and Facebook posts, expertly crafted to show him as a man of the people, on the side of the little guy against the elite, comes in for similar suspicion.
Read more at: Will Matteo Salvini wreck the euro? - Il Capitano
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They call him Il Capitano. No Italian can fail to hear an echo of Mussolini’s nickname, Il Duce. Critics see neo-fascist overtones everywhere—from the fact that Mr Salvini recently published a book using a publishing house with links to a far-right outfit, CasaPound, to the observation that he has been seen in a jacket made by a designer the CasaPounders favour. His personality cult, driven by dozens of daily tweets and Facebook posts, expertly crafted to show him as a man of the people, on the side of the little guy against the elite, comes in for similar suspicion.
Read more at: Will Matteo Salvini wreck the euro? - Il Capitano
The Digest Group
Almere-Digest
EU-Digest
Insure-Digest
Turkish-Digest
For additional information, including advertising rates - e-mail: Freeplanet@protonmail.com
6/8/19
Euro expanding its global Reach: Possible Draghi successor wants to increase the euro’s global use
The Governor of the Banque de France, François Villeroy de Galhau, told a conference in Paris on 4 June that increasing the global use of the euro would bolster “European financial sovereignty”.
Villeroy de Galhau, who is a frontrunner to succeed Mario Draghi as
the head of the European Central Bank in October. argued that since
the2008 financial crisis and the 2012 Eurozone crisis. the international
use of the euro as a major reserve currency has sharply declined.
European Commission President Jean-Claude Juncker has repeatedly vowed to turn the euro into a global reserve currency by replacing the dollar with the single currency when concluding deals tiedmto energy imports.
Read more at: Possible Draghi successor wants to increase the euro’s global use
1/28/19
EU fighting crime: Eurobanks stop issuing 500 Euro notes in fight against crime
Cash out: Eurozone banks stop issuing €500 note in fight against crime
Read more at:
1/15/19
EU - Economy - EURO: 20th. Anniversary of the EURO
European parliament marks 20th anniversary of euro
Note EU-Digest: A success story - 20 years EURO (€) currency. Remember those days before the EURO when driving by car from Holland to France, via Belgium and Germany, and having to exchange Dutch guilders to Belgian francs, German marks and French francs, paying the bank a percentage for each currency exchange they made, and also stopping at each border for custom controls. It is difficult to understand how some people want to go back to those "old days" before the EU and the € .Yes indeed #LoveTheEuro and #LoveTheEU
Note EU-Digest: A success story - 20 years EURO (€) currency. Remember those days before the EURO when driving by car from Holland to France, via Belgium and Germany, and having to exchange Dutch guilders to Belgian francs, German marks and French francs, paying the bank a percentage for each currency exchange they made, and also stopping at each border for custom controls. It is difficult to understand how some people want to go back to those "old days" before the EU and the € .Yes indeed #LoveTheEuro and #LoveTheEU
1/14/19
Russia-Economy: Russia ditches dollar, opts for euro and yuan
A report by the Bank of Russia
published late on Wednesday (9 January) reveals that the country dumped
$101 billion in US holdings from its reserves, shifting into euros and
yuan last spring amid a new round of US sanctions.
According to Bloomberg who broke the news, the report reveals a dramatic acceleration in a policy Russia has been pursuing for several years of reducing exposure to assets that could be affected by US sanctions.
Read more: Russia ditches dollar, opts for euro and yuan – EURACTIV.com
According to Bloomberg who broke the news, the report reveals a dramatic acceleration in a policy Russia has been pursuing for several years of reducing exposure to assets that could be affected by US sanctions.
Read more: Russia ditches dollar, opts for euro and yuan – EURACTIV.com
8/16/18
Currency Markets: Is US dollar on its way out as world′s lead currency? - by Lars Halter
If the stability of a currency is entirely linked to the confidence
in the issuer of the currency, then it does not look good for the US
dollar. In Washington, US President Donald Trump appears to be busy
fighting against the rest of the world.
His administration has kick-started a fierce trade conflict with China and other countries by slapping tariffs and engaging in protectionist rhetoric.
In recent weeks, Trump has also picked up quarrels with Russia and Turkey. But the two are beating back by hitting Washington where it hurts. Both Moscow and Ankara are questioning the global role of the US dollar.
Despite periodic tensions in US-Saudi relations, the pact has survived. And as demand for oil rose rapidly in the subsequent decades, the demand for US dollar also climbed. An increasing number of cross-border transactions began to be settled in the American currency.
That is still the case today. The International Monetary Fund (IMF) estimates that around 62 percent of the world's currency reserves are held in dollars. By comparison, the euro makes up about 20 percent of the currency reserves, followed by the yen and the pound sterling, which account for less than five percent.
The US dollar also plays a crucial role in forex transactions, with the currency accounting for 85 percent of the international currency exchange.
The US Federal Reserve has always supported the dollar's role as the leader of the world's currencies and provided sufficient liquidity, which has been a factor in ensuring its dominance.
Although the US central bank has so far been pursuing a steady course, the White House's recommendations and demands about interest and exchange rates create uncertainty as to whether one can always rely on the political neutrality of the Fed.
Furthermore, no one wants to bet on Trump's economic policies. His actions too often contradict his rhetoric: he speaks of large trade agreements, but has so far only withdrawn the US from them. None of his promised new deals has materialized. A trade dispute with China, uncertainty with regard to his dealings with Russia and a dispute now with Turkey, which is causing a plunge in the value of the lira. In the current economic climate, the dollar doesn't seem to be a safe bet.
Against this backdrop, the question remains: which currency in future could give the dollar a run for its money?
Russia and Turkey have announced that they want to return to national currencies in international trade — they want to avoid the detour via the dollar.
If other countries agree, the dollar could become less dominant in global trade in future, say some observers. Still, the US currency will likely remain the strongest individual national currency as long as the US enjoys greater investor confidence than that enjoyed by other countries.
Read more: US dollar on its way out as world′s lead currency? | Business| Economy and finance news from a German perspective | DW | 16.08.2018
His administration has kick-started a fierce trade conflict with China and other countries by slapping tariffs and engaging in protectionist rhetoric.
In recent weeks, Trump has also picked up quarrels with Russia and Turkey. But the two are beating back by hitting Washington where it hurts. Both Moscow and Ankara are questioning the global role of the US dollar.
Despite periodic tensions in US-Saudi relations, the pact has survived. And as demand for oil rose rapidly in the subsequent decades, the demand for US dollar also climbed. An increasing number of cross-border transactions began to be settled in the American currency.
That is still the case today. The International Monetary Fund (IMF) estimates that around 62 percent of the world's currency reserves are held in dollars. By comparison, the euro makes up about 20 percent of the currency reserves, followed by the yen and the pound sterling, which account for less than five percent.
The US dollar also plays a crucial role in forex transactions, with the currency accounting for 85 percent of the international currency exchange.
The US Federal Reserve has always supported the dollar's role as the leader of the world's currencies and provided sufficient liquidity, which has been a factor in ensuring its dominance.
Although the US central bank has so far been pursuing a steady course, the White House's recommendations and demands about interest and exchange rates create uncertainty as to whether one can always rely on the political neutrality of the Fed.
Furthermore, no one wants to bet on Trump's economic policies. His actions too often contradict his rhetoric: he speaks of large trade agreements, but has so far only withdrawn the US from them. None of his promised new deals has materialized. A trade dispute with China, uncertainty with regard to his dealings with Russia and a dispute now with Turkey, which is causing a plunge in the value of the lira. In the current economic climate, the dollar doesn't seem to be a safe bet.
Against this backdrop, the question remains: which currency in future could give the dollar a run for its money?
Russia and Turkey have announced that they want to return to national currencies in international trade — they want to avoid the detour via the dollar.
If other countries agree, the dollar could become less dominant in global trade in future, say some observers. Still, the US currency will likely remain the strongest individual national currency as long as the US enjoys greater investor confidence than that enjoyed by other countries.
Read more: US dollar on its way out as world′s lead currency? | Business| Economy and finance news from a German perspective | DW | 16.08.2018
10/11/17
Europe: How Markets View European Unity Vs. Disintegration - by Erik Norland
 |
| EU-US: It is high time for a divorce |
Whatever one thinks of Brexit, the prospects for deeper
European integration and the legitimacy of the various national
independence movements, the currency markets' view is unambiguous: they
strongly favor deeper political integration:
- When exit polls mistakenly called the Brexit referendum for the "Remain" voters, the British pound (GBP) rallied from 1.45 to 1.50 versus the U.S. dollar (USD) before crashing, first to 1.32 and later to as low as 1.18 versus the USD when the "Leave" victory became apparent. The euro fell 3% versus the USD on the day of the Brexit referendum and fell nearly 10% versus the USD within six months.
- Euro rallied 2% versus the USD in the week after Dutch voters dashed the hopes of Geert Wilder's eurosceptic Party for Freedom.
- Euro soared more than 10% to a two-and-a-half-year high in the weeks after Macron won the French presidential election on a platform advocating domestic economic reform and deeper European integration.
- September's German election results halted this advance after it became apparent that not only did AfD enter the Bundestag, as expected, but that Angela Merkel underperformed the polls by about 5-6% and would have to create an unwieldy coalition with the enthusiastically pro-European Greens and the Free Democrats, who oppose deeper economic integration.
- Catalonia's independence referendum led to a 1% one-day decline in the euro, further offsetting gains from the Macron victory. Ninety percent of Catalans voted to leave Spain in the referendum on October 1 that the Spanish state considers illegal and attempted to repress with force, leading to nearly 900 injuries.
When will the European Union, in particular the EU Commission, EU-Parliament and member states wake up to the fact that a strong united Europe, with an independent foreign policy is not in the interest of the US, whatever they might say to the contrary.
You also do not have to be an Einstein to recognize that the US Foreign Policy has usually been based on a"divide and conquer" doctrine, with the Trump Administration now openly championing this doctrine.
Obviously a fractured EU. would give the US a wide open playing field in Europe, with very little resistance from individual countries, to oppose major US policy decisions in a variety of areas, which could have a negative effect on the well-being of European citizens.
Yes indeed EU citizens, the motto: "United we Stand, Divided we Fall" is more important today than ever before.
Read more: Europe: How Markets View Unity Vs. Disintegration | Seeking Alpha
10/8/17
EU: Give the regions more EU power to save the euro and defeat populism – Giles Merritt
Elections across Europe show Europe’s political parties to be
increasingly defined by how nationalistic they are. Confronting this and
reinstating progressive politics is essential, and can best be done by
giving more power to Europe’s regions, urges Giles Merritt.
Giles Merritt is Founder and Chairman of Friends of Europe.
He notes: "If EU integration is to be blocked by nationalist pressures, then Europeans must resign themselves to losing clout and competitiveness in the global economy. An awareness of this is producing fresh ideas for streamlining the EU’s structures and countering its unpopularity, notably from European Commission President Jean-Claude Juncker and Emmanuel Macron. So far, none of these ideas address the most obvious reason for people’s disaffection – their sense of being governed by distant powers ".
Read more: Give the regions more EU power to save the euro and defeat populism – EURACTIV.com
Giles Merritt is Founder and Chairman of Friends of Europe.
He notes: "If EU integration is to be blocked by nationalist pressures, then Europeans must resign themselves to losing clout and competitiveness in the global economy. An awareness of this is producing fresh ideas for streamlining the EU’s structures and countering its unpopularity, notably from European Commission President Jean-Claude Juncker and Emmanuel Macron. So far, none of these ideas address the most obvious reason for people’s disaffection – their sense of being governed by distant powers ".
Read more: Give the regions more EU power to save the euro and defeat populism – EURACTIV.com
8/21/17
ECB concerned stronger euro could derail economic recovery
European Central Bank (ECB) governors are concerned that a further hike
in the value of the euro, making exports less attractive and imports
cheaper, could derail the economic region’s recovery. In minutes
from their meeting on 19-20 July 2017, released on Thursday, they said
there is a "risk of the exchange rate overshooting in the future". Some
concerns were also voiced about "policy uncertainty in the United
States".
Read more: ECB concerned stronger euro could derail economic recovery
Read more: ECB concerned stronger euro could derail economic recovery
1/27/17
EU-US Relations: Eurozone closes ranks after US attacks on the euro
Eurozone finance ministers closed ranks to defend the euro after the man tipped to be the US ambassador to the EU, Ted Malloch, said the currency “could collapse” within 18 months.
Read more: Eurozone closes ranks after US attacks on the euro | Euronews
Read more: Eurozone closes ranks after US attacks on the euro | Euronews
12/5/16
Italy: Mateo Renzi Loss of no impact on EU as Euro hits two-week high - by T.Cunningham, B. Henderson, H. Yorke
The euro has jumped to its highest level in more than two
weeks in volatile trading as markets shrugged off the outcome of the
Italian constitutional referendum.
The single currency tumbled to a 21-month low overnight, dropping by as much as 1.4pc to $2.0505 against the dollar, after Italian Prime Minister Matteo Renzi conceded defeat in a referendum over his plan to reform the constitution and said he would resign.
However, in mid-morning trade the euro jumped back above $1.07 against the dollar in mid-morning trade as investors bet against an immediate snap election. It climbed by as much as 0.48pc to $1.0715, its highest level since November 17.
Note EU-Digest: the big plus for the EU was the defeat in Austria of the Conservative Populist party last night - as to Italy it seems like business as usual.
EU-Digest
The single currency tumbled to a 21-month low overnight, dropping by as much as 1.4pc to $2.0505 against the dollar, after Italian Prime Minister Matteo Renzi conceded defeat in a referendum over his plan to reform the constitution and said he would resign.
However, in mid-morning trade the euro jumped back above $1.07 against the dollar in mid-morning trade as investors bet against an immediate snap election. It climbed by as much as 0.48pc to $1.0715, its highest level since November 17.
Note EU-Digest: the big plus for the EU was the defeat in Austria of the Conservative Populist party last night - as to Italy it seems like business as usual.
EU-Digest
8/25/16
Britain: UK dug herself a deep hole with Brexit as the pound starts to reach par with the euro or even lower
Globalist “Brexit means Brexit” – is the slogan of the new British Prime Minister, Theresa May. She returns from a holiday of walking in the Swiss Alps to face the policy nightmare bequeathed to her by her predecessor David Cameron.
If the new British leader bothered to change any money at Zurich’s Kloten Airport, she would have found that the British Pound is on track to have the same value as the euro.
That is how far and how fast the English currency has lost value since the Brexit vote.
Meanwhile, the other principal woman leader in Europe, Angela Merkel, has set off on a sequence of meetings with EU leaders ahead of a full gathering of all EU heads of government – minus Britain’s Mrs. May – in Bratislava on September 16th.
Mrs. Merkel has acknowledged that she considers the outcome of the Brexit vote “irrevocable.”
That statement, certainly made out of respect for British democracy, should not mean that nothing could change in the interpretation of the vote over the next months and years.
What Merkel and other EU leaders should avoid at any cost is to create a self-fulfilling inevitability that is not justified.
When Mrs. Merkel and her fellow EU leaders meet, they have a crucial decision to make. Do they hurry to push Britain out of the UK on the assumption that the plebiscite vote, in which 63% of the British electorate did not vote for Brexit, was and is the last word?
Or do they leave some time for the British to realize that the successful Brexit campaign was built on a bunch of demagogue-ish 1930s type of populist lies — like the claim that 75 million Turks were about to join the EU and would arrive in England?
Or the lie that the UK could keep access to the EU Single Market and that Brits would be able to live and work freely in Europe, even as London introduced controls to stop Europeans living and working in Britain.
No question, those lies, perpetrated by Boris Johnson and others, did win the plebiscite. But it is also fair to say that most English voters that were pro-Brexit have not yet had a chance to comprehend fully the economic consequences of losing unfettered access to the EU’s single market of 500 million middle class consumers.
here are two stages to Britain fully leaving the EU. Under the EU Treaty’s Article 50, a member state that wants to leave has to announce its intention.
After the announcement has been made, there are two years of technical talks on such details as to who pays the pensions of the British officials who will be dismissed and what happens to the European Medicines Agency or the European Banking Authority — both located in London.
The next stage commences once Article 50 talks are over. Jean-Claude Piris, the EU’s former chief lawyer reckoned it will take at least eight years to iron out any kind of satisfactory UK-EU deal on trade access and the rights of British citizens living in Europe.
Pascal Lamy, the former WTO director general and EU Commissioner also dismissed the idea that a final EU-UK trade deal is achievable without years of negotiation.
It has taken the EU and Canada eight years to agree to a relatively modest trade deal that now has to be ratified by all 28 EU national parliaments.
Bit by bit, the extent of the Brexit lies is now coming home to the British public. This does not invalidate the plebiscite but robs it of any moral authority to be the unchangeable voice of the nation".
Note EU-Digest: Now the British Public has seen what disasters Brexit is causing they might want to call for a second referendum?
EU-Digest
If the new British leader bothered to change any money at Zurich’s Kloten Airport, she would have found that the British Pound is on track to have the same value as the euro.
That is how far and how fast the English currency has lost value since the Brexit vote.
Meanwhile, the other principal woman leader in Europe, Angela Merkel, has set off on a sequence of meetings with EU leaders ahead of a full gathering of all EU heads of government – minus Britain’s Mrs. May – in Bratislava on September 16th.
Mrs. Merkel has acknowledged that she considers the outcome of the Brexit vote “irrevocable.”
That statement, certainly made out of respect for British democracy, should not mean that nothing could change in the interpretation of the vote over the next months and years.
What Merkel and other EU leaders should avoid at any cost is to create a self-fulfilling inevitability that is not justified.
When Mrs. Merkel and her fellow EU leaders meet, they have a crucial decision to make. Do they hurry to push Britain out of the UK on the assumption that the plebiscite vote, in which 63% of the British electorate did not vote for Brexit, was and is the last word?
Or do they leave some time for the British to realize that the successful Brexit campaign was built on a bunch of demagogue-ish 1930s type of populist lies — like the claim that 75 million Turks were about to join the EU and would arrive in England?
Or the lie that the UK could keep access to the EU Single Market and that Brits would be able to live and work freely in Europe, even as London introduced controls to stop Europeans living and working in Britain.
No question, those lies, perpetrated by Boris Johnson and others, did win the plebiscite. But it is also fair to say that most English voters that were pro-Brexit have not yet had a chance to comprehend fully the economic consequences of losing unfettered access to the EU’s single market of 500 million middle class consumers.
here are two stages to Britain fully leaving the EU. Under the EU Treaty’s Article 50, a member state that wants to leave has to announce its intention.
After the announcement has been made, there are two years of technical talks on such details as to who pays the pensions of the British officials who will be dismissed and what happens to the European Medicines Agency or the European Banking Authority — both located in London.
The next stage commences once Article 50 talks are over. Jean-Claude Piris, the EU’s former chief lawyer reckoned it will take at least eight years to iron out any kind of satisfactory UK-EU deal on trade access and the rights of British citizens living in Europe.
Pascal Lamy, the former WTO director general and EU Commissioner also dismissed the idea that a final EU-UK trade deal is achievable without years of negotiation.
It has taken the EU and Canada eight years to agree to a relatively modest trade deal that now has to be ratified by all 28 EU national parliaments.
Bit by bit, the extent of the Brexit lies is now coming home to the British public. This does not invalidate the plebiscite but robs it of any moral authority to be the unchangeable voice of the nation".
Note EU-Digest: Now the British Public has seen what disasters Brexit is causing they might want to call for a second referendum?
EU-Digest
3/12/16
The euro zone is marching along nicely, with ECB leading the way - by ERIC REGULY
 |
| euro-zone hanging in there |
Every
few years, indeed, every few months, the euro zone is written off as a
failed experiment. Every monetary union since the Roman empire has blown
up or simply faded away and the euro zone will be no exception, its
detractors insist; just give it time. Nineteen countries running at 19
different speeds, with jobless rates ranging from 5 per cent to 25 per
cent can’t possibly stick together.
The European Central Bank’s response on
Thursday to waning inflation and growth seemed to prove the detractors
right. Almost eight years after the 2008 financial crisis, the euro zone
remains such an indolent economic sloth that the ECB actually invented a
way to pay the banks to make loans to businesses and consumers. The
novel scheme was part of yet another stimulus package, one that knocked
interest rates to zero and boosted the ECB’s quantitative easing bond
purchases to €80-billion ($118-billion) a month, that was flung on top
of piles of stale stimulus packages that basically didn’t work.
The
ECB’s new and seemingly desperate attempt to juice up the economy was
an overreaction, although not massively so, and the euro zone is not as
utterly hopeless as the headlines suggest. The euro zone may look like
it’s dancing drunkenly through a field of land mines, never more than a
stumble away from destruction. But the dance is not the suicide run it
seems to be.
Take the Sentix Euro
Break-up index. The index shows how investors rate the probability of a
breakup of the euro zone (such as Greece hitting the road) within 12
months. The latest reading was 19.9 per cent, which looks pretty high.
In comparison to previous peaks, it’s not. In 2012, at the height of the
euro zone crisis, the index hit 70 per cent. Last summer, when Greece
again taunted the euro zone with its exodus, the index reached 50 per
cent. From the investors’ point of view, the breakup scare, while far
from absent, is now relatively low.
More
evidence that the euro zone is not doomed comes from the fairly strong
growth rates in some countries and the rocket-like performance in a few.
Ireland, which sued for a bailout in 2010, is taking on Celtic Tiger
status again. Its gross domestic product grew a stunning 9.2 per cent,
year-over-year, in the last three months of 2015, outranking India and
China. Spain, the euro zone’s fourth-largest economy, grew 3.2 per cent
in 2015. It, too, had been a basket case during the crisis.
Portugal,
another bailout victim, eked out growth of 1.5 per cent last year.
Greece, now grinding through its third bailout, remains the lone euro
zone country in recession (Finland entered a technical recession last
year, defined as two consecutive quarters of contraction, but is
expected to bounce out soon). Italy is expanding painfully slowly, but
managed to report good news on Friday: Industrial production in January
jumped 1.9 per cent, month-on-month.
Over
all, euro zone growth is not great, but it’s improving. The ECB expects
growth of 1.4 per cent this year and 1.7 per cent in 2017. No crisis
here. So what made the ECB president haul out the bazooka this week? His
stimulus package was more aggressive than economists had expected.
In
a word, inflation. Or more precisely, the lack thereof. In February,
inflation turned negative, at minus 0.2 per cent compared with a
0.3-per-cent rise in January. Mr. Draghi wants headline inflation at
close to, but not beyond, 2 per cent. But the figure seems arbitrary.
There is no compelling rationale to argue that inflation of, say, 1.5
per cent or 2.5 per cent is inherently evil, and falling inflation rates
are not always terrible to behold.
In this case, they are largely owing
to the collapse in energy and commodity prices in the last year and a
half, which have given consumers extra spending power. If energy and
seasonal food prices are excluded, “core” inflation actually rose by 0.7
per cent in February.
Inflation, in
other words, hasn’t disappeared. The ECB expects more or less flat
inflation this year, rising to 1.3 per cent in 2017 and 1.6 per cent in
2018, and those figures could prove conservative if oil prices, which
have climbed by almost 50 per cent since January, keep rising. Mr.
Draghi’s big, fat stimulus package seems more like an insurance policy
than a panic response to a new crisis. There is no new crisis.
To
be sure, the euro zone and the wider European Union face serious
problems, from Britain’s potential departure from the EU to the refugee
crisis. But Britain probably will vote to stay put and, even if it goes,
the euro zone’s integrity would not be compromised since Britain
doesn’t use the euro. The refugee crisis has not killed the EU’s
passport-free zone, known as Schengen, in spite of endless predictions
that it would. The loony populist parties of the far right and the far
left have yet to form governments (Greece’s far left Syriza party wasn’t
loony enough to ditch the euro). There is no war in the EU countries.
Growth
and inflation are not dead. On the whole, the euro zone is in much
better shape than it was three or four years ago, even two years ago.
The new stimulus package is bound keep things moving in the right
direction. For that, you can thank the ECB.
Read more: The euro zone is marching along nicely, with ECB leading the way - The Globe and Mail
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