Just who’s talking about threats to the Euro?
After I found the Der Spiegel article today, describing the migraine that Greece and its money woes are giving to the European Union leadership (previous post), I scanned more headlines at the newspaper’s website. I found this from earlier this week: “European Union Sees Threats to the Euro.”
The brief article paints an ominous future ahead this year for the Euro monetary system, predicting that the currency may continue its recent several-weeks slide downward against the dollar:
“…the euro stands at $1.41 and many analysts are now warning that it may be in for a long slide. Some are even concerned that the cohesiveness of the euro zone might be endangered altogether — with the European Union itself chief among the worry-warts.”
If I’d read this in a USA newspaper rather than an European one, I might take it with a grain or two of salt. Why? Because, having now inhabited both the two continents, and regularly followed the major news media of each, I’ve come to expect a predictable dose of media bias when one is reporting on the other. It’s been quite a slap to my rosy idealism of all fair and balanced, etc.
But this Euro gloom and doom is coming from a major German newspaper. Not to mention that the article is sourcing a recent report from the internal EU agency, Directorate General for Economic and Financial Affairs. So these baleful sounds have substance. Such as:
The report… went on to voice concern that differences among euro zone countries “jeopardize confidence in the euro and threatens the cohesiveness of the euro area.”
Financial turmoil in Greece is of particular concern, with the country running a public sector deficit of 12.7 percent in 2009, more than four times higher than the three percent target called for by European Union rules. But there are several other problem children within the 16-member euro zone, including Spain, Ireland and Portugal, with Italy also raising eyebrows.
Worrisome, definitely.
It seems Greece owes a little money
Greece is bankrupt, Nouriel Roubini said today, speaking during an interview at the World Economic Forum in Davos (“Roubini At Davos: Greece Is Obviously Bankrupt” Jan 27, 2010). He advised the country to ask China to rescue it, and added that the European Union may also be forced to help in order to hold off a threat to the Euro monetary system itself.
None of this is news to the leaders of the European Union who have been stewing over what to do about an economically wobbling Greece for some time, according to an analysis in Der Spiegel last month, “Should the EU Save Athens from Bankruptcy?” (by Wolfgang Reuter, Dec 14, 2009).
Reuter explores how the situation presents the EU and its leaders with an urgent new governance question. He reports in detail on some of the high-level discussions. Central theme:
“…Everyone was asking the same question: What happens when a country, even a member of the European monetary Union, goes bankrupt? Can the EU allow this?…”
Another very interesting money pot to watch boil, as if there aren’t enough already.
