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The EU Summit and ECB meeting which transpired last week are likely to be the final supporting actions by Eurozone officials this year. The tack forward for Europe has been clarified; move ahead with the long and arduous process of fiscal unification, supported by a reactive ECB. The path ensures two outcomes; that there will be flare ups along the way which will negatively impact sovereign debt/currency markets, and that Europe’s economies will continue to slow as the mending process is drawn out. The way forward will be the German way forward, and the rest of Europe will need to accept it in the near term. Germany has the strongest and most robust economy in the Eurozone. German unemployment is low and the euro has already depreciated to levels which will support German export growth. For many years in a row, Germany runs a current account surplus based on German specialization in the manufacturing area and the benefits of a pegged currency, which is much lower than the Deutschemark would be as a standalone currency unit. The Germany economy would be in a much different place if the euro currency peg (pegged to the prospects of 17 nations and not […]
Clik here to view.
The EU Summit and ECB meeting which transpired last week are likely to be the final supporting actions by Eurozone officials this year. The tack forward for Europe has been clarified; move ahead with the long and arduous process of fiscal unification, supported by a reactive ECB. The path ensures two outcomes; that there will be flare ups along the way which will negatively impact sovereign debt/currency markets, and that Europe’s economies will continue to slow as the mending process is drawn out. The way forward will be the German way forward, and the rest of Europe will need to accept it in the near term. Germany has the strongest and most robust economy in the Eurozone. German unemployment is low and the euro has already depreciated to levels which will support German export growth. For many years in a row, Germany runs a current account surplus based on German specialization in the manufacturing area and the benefits of a pegged currency, which is much lower than the Deutschemark would be as a standalone currency unit. The Germany economy would be in a much different place if the euro currency peg (pegged to the prospects of 17 nations and not […]
