[quote]Euro dives on Italian call to quit currency
Fri Jun 3, 2005 8:06 AM BST,by Naomi Tajitsu
TOKYO (Reuters) - The euro suddenly spiked lower on Friday after an Italian minister said that Italy should quit the single currency and revert back to the lira.
Welfare Minister Roberto Maroni told the Repubblica newspaper that Italy should hold a referendum to decide whether to return to its old currency.
That sent the euro tumbling to $1.2220 from $1.2285 in a matter of minutes as the report added to concerns about the European Union’s outlook – politically and economically.
By 0647 GMT, the euro had recovered to around $1.2260, little changed from late U.S. levels.
The single currency slid to 132.30 yen from 132.62 yen on the report.
The euro’s fall also boosted the U.S. currency against the yen, which hit the day’s high at 108.25 yen.
Maroni also said that European Central Bank President Jean-Claude Trichet was one of the people chiefly responsible for the “disaster of the euro”.
Traders said the market had jumped on the interview to further sell the euro, which had hit an eight-month low earlier in the week after the Netherlands followed France in overwhelmingly rejecting the EU constitution.
Many traders said that political uncertainty and sluggish economic growth in the euro zone would continue to loom over the single currency.
“There aren’t a lot of reasons to buy the euro, so in time, we should be seeing more selling,” said Shigeru Komatsu, a trader at Sumitomo Trust and Banking.b[/b] today.reuters.co.uk/news/newsArt … -FOREX.xml[/quote]
Short euros…long on dollars…
[quote]In reality, a weak Europe is much more of a threat to America’s interests than a strong one. The no vote not only guarantees several more years of Eurodithering and introspection: it also makes it much less likely that Europe will be able to absorb Turkey, let alone Ukraine, anytime soon, if ever. The most sensible American response to Europe’s failure is to see it as an opportunity. An opportunity that is fraught with risks, to be sure, but one that would allow Europe to start down a more sensible path, and would let America nudge it in a more Anglo-Saxon direction. There are signs that a similar revolution is stirring in Europe. There is a good chance that Mr Chirac will be replaced in 2007 by Nicolas Sarkozy, who claims to be more of a fan of the free market; and an even better chance that Gerhard Schr
A domino effect? Some fear it…and rightfully so. Seven more countries are due to hold votes on the charter. The EU and Ireland have both said they might drop the vote altogether. And it seems like the defeats in France and the Netherlands have shifted votes in the other countries that have not voted yet. Denmark is set to vote soon, and polls in the country are showing a shift from slight opposition to convincing opposition. Another loss would be catastrophic for the charter…(especially if the island countries pulled out). According to the following article, a defeat in five countries would effectively “kill” the charter.
According to the rules, if one country votes against, the whole constitution goes into the bin. So it doesn’t really matter how all the next votes go, two countries have already rejected it.
As to whether this is the end of the EU, no way. What the voters rejected, was not Europe, not the EU, but the EU the way it is run now, aka by unelected, extremely-overpaid-by-taxpayers-money bureaucrats and technocrats completely out of touch with the lives of the European man-in-the-street.
If the European leaders learn their lesson and bother to find solutions to problems like unemployment and rising crime, then the referendum defeats will have done something good.
All this talk about the European Union facing the end is the fault of people like Chirac, who taught they could intimidate voters into voting yes by threatening armageddon if they voted no.
The point of the article I gave the link for was not only about the charter, which, in itself, is not essential to the existence of the EU. One of the things some people fear is an outbreak of protectionism in individual countries. For the EU to become stronger, individual countries will have to give up some soveriegnty. Currently, if a country decides its interests are above those of the EU, and doesn’t act in a way that promotes the common good of all countries in the Union, it weakens the bloc as a whole. Of course the rejection of the constitution does not spell the end of the EU, but it has the potential to set a dangerous precedent.
I am not an advocate either way, but I can see where some would be nervous.
Personally, I do not see what the big deal is. The charter failed. The EU will still be around. Let them go back to the drawing board and come up with something better. This is just a reality check and a useful one in getting these Brussels bureaucrats back in line.
I’ve read some pretty discouraging opinion pieces lately about the likelihood of Merkel actually being able to get much serious reform enacted. Seems like Germany is a little more mature than France on when it comes to this issue, but there still appears to be a great deal of resistance to facing up to the realities of the failed European welfare state.
Can’t remember if it was Economist or some other paper that had a piece the other day saying essentially: France has created policies which discourage work and encourage non-work. Now they find to their suprise that they have too little of the former and too much of the latter. The preferred solution of the French people? Even more of the same socialist welfare policies which created the unemployment in the first place.
Hopefully Germany can avoid coming to the same regretable conclusion…
Ah yes, scapegoat - had it in my head but did not trust my English
Nobody knows what Merkel wants right now. Her official statements are like “saving as much of the social system as possible”. Schroeder started reforms, but they must be carried out in a better way (without spending billions on them like for -new- HartzIV-institutions prensently) and people need the feeling of a restart.
Now the Chirac/Schroeder “delay reforms and sell them badly” crisis turned into a whole EU constituional crisis.
Let us face it, Fred could get the German citizenship. His almost-ex country needs him! Germans need leaders
Haha Can you imagine Frederick P. Smith V. and his triumphant return to creat Arbeit for the German Volk? What with the strains of Die Walkure or Siegfried in the background?
I have great confidence in Angela Merkel. It is always darkest just before the dawn. No one remembers how demoralized the British nation was before Margaret Thatcher. No one also recalls anymore how difficult it was for her to stand up the unions. She did. There was a lot of turmoil, but look at the UK today and look at Germany. It can and will be done in Germany. As to France, yawn, what they do is a matter of supreme irrelevance to me. I am however mighty pleased as you well can imagine that the two leaders who did so much to create a cynical, populist, anti-American front have reaped what they have sowed. If France decides to help, so be it, but I really want to see Germany back in the plus column. Then, think of what we would be able to manage. Think of the possibility of getting a democracy in Belarus, of stablizing and making the Ukraine prosperous, of getting all the Balkans into the EU of eventually doing so with Turkey, while leading stabilization and democratization efforts in the Caucasus. These are big plans but they are not entirely unattainable.
BUT remember how many people lost their jobs in the UK and how worried everyone was when Thatcher first started implementing her policies. The same will happen to Germany but postponing the visit to the dentist is not going to make the discomfort of dealing with rotten teeth any easier by pretending that the tooth does not need to be pulled.
