Posts Tagged ‘euro’

Extent of euro influence

Wednesday, October 10th, 2012

Since the euro is one of the main Forex instruments, it is crucial to know to what extent this estimable currency is influential.

At present, the euro is an official currency for the majority of EU nations. 7 countries out of 27 are even planning to replace their national currency with the euro in 2014-2015. Denmark, Sweden and Great Britain do not seem to be willing to join the euro area so far. There can be various reasons for it, but they are mostly psychological rather than economic.

The euro reaches out far beyond the Eurozone borders. Vatican, Monaco and San Marino concluded formal agreements with the EU to adopt the euro as an official currency. The euro also serves as an official currency in Andorra, Montenegro, the Republic of Kosovo and two British-administered areas on Cyprus, even though they adopted the single European currency unilaterally.

What is more, the euro is used in some countries of Africa and Pacific Island countries.

“Take It Or Leave It” Soros – Germany

Thursday, September 20th, 2012
Take it or leave it
The euro crisis’ conclusion is fast approaching and the situation is intensifying by the minute.
As the crisis situation escalate, the famous multimillionaire investor George Soros adviced Germany to either lead over the common currency or just quit it.
According to the veteran investor, Germany should now take the reins on euro’s carriage to either  overcome the situation or fall into a drastic ending along with it. ”Germany must take full responsibility for the Europe. Either throw in your fate with the rest of Europe, take the risk of sinking or swimming together, or leave the euro, because if you left, the problems of the Eurozone would get better,” he commented.
According to some experts, the euro crisis will be ended once a single financial regulator will established. A single financial regulator may provide guidance for economic growth especially for the PIGGS country who are on a financially unhealthy diet.
Germany, which still has an unresolved dispute with France, who is also a leading player, is trying to amend on their current situation despite their unsynchronized  goals. The history long dispute may have a shimmering hope after two huge aeronautical companies from each country is trying to form a merge and is seeking to a friendly relationship to both governments. The combined company seeks a help from their respective countries to back up their aeronautical campaign which will also lead to a pan-European corporate champion.
The euro crisis’ conclusion is fast approaching and the situation is intensifying by the minute.
As the crisis situation escalate, the famous multimillionaire investor George Soros adviced Germany to either lead over the common currency or just quit it.
According to the veteran investor, Germany should now take the reins on euro’s carriage to either  overcome the situation or fall into a drastic ending along with it. ”Germany must take full responsibility for the Europe. Either throw in your fate with the rest of Europe, take the risk of sinking or swimming together, or leave the euro, because if you left, the problems of the Eurozone would get better,” he commented.
According to some experts, the euro crisis will be ended once a single financial regulator will established. A single financial regulator may provide guidance for economic growth especially for the PIGGS country who are on a financially unhealthy diet.
Germany, which still has an unresolved dispute with France, who is also a leading player, is trying to amend on their current situation despite their unsynchronized  goals. The history long dispute may have a shimmering hope after two huge aeronautical companies from each country is trying to form a merge and is seeking to a friendly relationship to both governments. The combined company seeks a help from their respective countries to back up their aeronautical campaign which will also lead to a pan-European corporate champion.
Stephen Stevenson

Eurozone’s Unwitting Executioner

Friday, August 31st, 2012

While Eurozone leaders are desperately trying to breathe new life into Greece’s junk economy plugging the leak with massive loans, the real threat to the euro is swelling in the North. It bears the name of Finland. The point is that the Land of Thousands Lakes expressed readiness to leave the Eurozone in case Spain’s and Italy’s debt crises exacerbate. They say better lost than found, but there is something which makes this saying misfit the situation. The point is that Finland is the only country with the AAA credit rating in the entire euro area. The Finnish economy has been commonly recognized as the most stable and competitive in the world for five years already. Apparently, it goes without saying that Finland would be a painful loss for the currency bloc. However, at a closer look, the stance of the Finnish government does make sense. Finland toils not only for itself, but for at least two other states, if not three. Greece’s cry for help was followed by that of Spain; now Italy is just about to queue up for a bailout. Moreover, eurosceptical Sweden and Norway neighbouring Finland state that a non-euro economy tends to develop faster. In addition, Finland’s main importers and raw material supplies are non-Eurozone countries, so leaving the currency bloc will hardly affect the economy of Finland. What is more, the Finnish government will be able to save the money which is now pouring into the economies of Greece and Spain in exchange for debt obligations of very doubtful liquidity. Finnish Finance Minister Jutta Urpilainen said, “Finland will not hang itself to the euro at any cost and we are prepared for all scenarios”. She also added that Finland will not pay for others. Minister for Foreign Affairs of Finland Erkki Tuomioja announced that the country has a plan to follow in case the euro collapses. It should be reminded that Finland signed a deal on securing collateral in exchange for its commitment to Greece’s second bailout. If saving the euro requires sharing the debt burden, Finland may well impede this scheme. And yet, this scenario seems to be unlikely with the Finnish Parliament growing increasingly determined to exit the euro area. Experts and economic observers have even introduced a new term for it — Fixit (Finland exit). Fixit is much more likely to happen than Grexit (Greece exit). It is not hypotheses or conflicts among Finnish political parties that make the likelihood of Fixit so clear, but real data. According to the IMF, next year the overall Eurozone debt will peak at 91% of GDP, while that of Finland will only equal 53% of GDP, which is the lowest level of debt except for Estonia and Luxembourg. Finland’s contribution to financing the debts of troubled countries is the same as Germany’s support. But being the Eurozone thought leader, the German government knows what it pays for and objectives it pursues, whereas Finland acts more like a benevolent patron backing its poor cousins and getting nothing from them but stocks of barely alive banks. Germany fully understands it and does its best to come to an arrangement with Finland. However, reaching any agreement appears to be a challenge, as Finland needs indemnity such as assets or shares in certain economic sectors of its half-live dependants. There is a risk that the “deal of the century” will span for a really long time, right up to the point when the Netherlands will also feel like joining it, which will not benefit Germany. So, it is highly possible that Germany’s sluggishness will lead to a partial or full Eurozone collapse, rather than to any fruitful arrangement.