The euro is at its lowest since 13 years

Source

Two reasons:
* The US economy is healthy and is expected to raise its rates in June, while the EU is printing money to support its apathetic economy.
* On the other hand the German economy has trade surplus and therefore invests outside of the EU, which further weakens the euro.

As for the consequences it will boost our exports and fuel our economies, but it will be at the expense of our purchasing power.


But more importantly it reveals that the eurozone still is the sick man of the world, and that the national interests within the eurozone keep diverging rather than converging.

I just realized that I provided a 2015 link for the 12-years low. Anyway the situation has continued to worsen and we did hit a 13-years low.

Auvergnat said:

Source

Two reasons:
* The US economy is healthy and is expected to raise its rates in June, while the EU is printing money to support its apathetic economy.
* On the other hand the German economy has trade surplus and therefore invests outside of the EU, which further weakens the euro.

As for the consequences it will boost our exports and fuel our economies, but it will be at the expense of our purchasing power.


But more importantly it reveals that the eurozone still is the sick man of the world, and that the national interests within the eurozone keep diverging rather than converging.

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While I would not say that the US economy is healthy, it has certainly handled the Clinton bubble better than the EU. But you are quite right that the climbing interest rates expected for the US at a time the EU seems to be bracing for another wave of Euro-problems and the EZB is probing the bottom of the barrel of tricks it can preform, the Dollar should tend to be stable,while the Euro should sink further.

This would sure be a great time to visit Europe, well Southern Europe, at least!

And so what? It is great for an exporting economy like Europe.

PeteEU said:

And so what? It is great for an exporting economy like Europe.

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Europe is not an exporting economy. Germany is. Almost all others have trade deficits, mostly because of their trade balance with Germany.

But, yeah, good for the economy, bad for customers. However it says a lot about the systemic problems of the eurozone and that is certainly not good for the economy.

Auvergnat said:

Europe is not an exporting economy. Germany is. Almost all others have trade deficits, mostly because of their trade balance with Germany.

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Europe is an exporting economy.

But, yeah, good for the economy, bad for customers. However it says a lot about the systemic problems of the eurozone and that is certainly not good for the economy.

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Yes it is bad for customers because our fuel prices go up more than they should. Also tech and such things become more expensive relatively. But if it means more jobs, then fine we can live with it.

I know you are anti-European and hate your own country but is there no limit on your hatred for France and Europe?

Seen overall, the EU traditionally does have a trade surplus. Looking at individual member states provides a different picture though.

As such (2015) Germany has the biggest surplus (no doubt all those B2Bs catering to niches:lamo), with Netherlands, Italy, Ireland, Belgium, Czech Republic, Denmark, Hungary, Poland, Sweden, Slovenia and Slovakia following in surplus.

One need of course see the size of country (population) and size and nature of individual economy.

On the deficit side of trade balance Finland had the lowest, followed in ascending order by the rest, with France coming in second-"worst" before UK.

Of course that in no way reflects individual economic health at all, it merely reflects the import/export ratios.

Also much is conducted within the EU. I believe Germany's exports to within the EU still amount to over 60 pct of its total exports.

France, as an example, significantly decreased its trade deficit in 2015 to the lowest in 10 years, the improvement having been primarily down to infra-EU trade. As such it is the 3rd largest source of imports into Germany after China and Netherlands (2nd largest destination of German exports after the US).

On the currency issue itself, I've always felt!!!! total parity with the dollar to be most reflective of realities, some of the €-highs of past years having been ridiculous.

Auvergnat said:

~................. Almost all others have trade deficits, ......................~

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define "almost all others". With 13 states having shown an overall surplus in 2015.

But, yeah, good for the economy, bad for customers. However it says a lot about the systemic problems of the eurozone and that is certainly not good for the economy.

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You gonna make up yer mind?

Chagos said:

You gonna make up yer mind?

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There was no contradiction: currency is a self-healing mechanism.

A cheaper currency will improve our economy but it shows how sick our economy is in the first place. Good news: we are sending you to the emergency service on a Sunday night and you will get relief. Bad news: it means you are really sick.

Seen overall, the EU traditionally does have a trade surplus. Looking at individual member states provides a different picture though.

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You need some historical perspective: until recently the vast majority of the eurozone had a trade deficit. This is only because eight years of depression have eroded the value of the euro that our imports decreased and our exports increased, that our trade balances temporarily return to equilibrium.

If you look at the long trend, the EU has constant trade deficits. Germany is the one exception that bends all statistics with its monstrous trade surplus. But if our situation ever improves, the EU will return to trade deficits.

As I said this situation only exists because we have big problems, and it will only last as long as they will last. Nothing has been solved during those eight years, things kept deteriorating.


The first problem is that European countries still have very different needs and it worsens. Germany's giant trade surplus can only exist because of our trade deficits with them, and their surplus is making the euro too expensive for our exports, which further aggravates our problems. Their model simply cannot be reproduced, there is not enough global demand. In a sane market we would have all different currencies and the deutschmark would be too expensive and slow down their exports.

The other problem is that the euro became a reserve currency and this is creating an artificial demand for the euro that hampers our export competitiveness, just like the USA but to a lesser extent. This is adding insult to injury.

Auvergnat said:

There was no contradiction: currency is a self-healing mechanism..................

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Alone the blatant absurdity of such a statement precludes any further discussion of economic matters with you. As was to be expected, the gish gallop with which you follow this requires no further address but simple dismissal.

As shown in other threads dealing with economics, where there are many points to criticize on and of the EU, you appear to not know a single one of them.

I will, however, concede that my statement of EU traditionally having a trade surplus constitutes an error.

My bad!