Euro

The euro is nearly level with the dollar. It should not matter in theory, because of the relatively low share of the US in EU trade. But it does in practice. Some predict that the euro will fall below parity. There is a straightforward explanation for this: the war in Ukraine and unpredictable Russian gas supplies to Europe make the dollar a safe haven for investors. On top of this, US interest rates offer a higher return on investment. But it is not only the dollar. Looking at the broader picture, the European Central Bank’s measure of the euro’s real effective exchange rate against 42 partner countries confirms this trend

Ursula von der Leyen dispensing vaccines, with a halo over her head perhaps? Emmanuel Macron riding a tank to symbolise the continent’s strategic autonomy? Or various commissioners whose names no one can quite remember setting carbon targets, fining Google and Apple, and dishing out grants for roads, bridges and tunnels?  It remains to be seen just what the European Central Bank comes up with for its planned re-design of the euro banknotes. One point is perfectly clear, however: the makeover will reveal the currency’s true colours as a vehicle for European integration rather than an effective instrument of economic policy. In fact, if the ECB really wanted to redesign the

The US is booming. The UK is set to grow at the fastest pace in half a century. China is expanding again at a blistering pace. Stock markets are rising. And commodity prices are racing ahead.  Across most of the world, economists are starting to worry about a runaway boom, stimulated by too much easy money. This, they fear, could easily run out of control. There is one exception, however: the eurozone. As of today, the zone is officially in a double-dip recession. The vaccine downturn has arrived. And while the consequences remain unpredictable, one thing is clear: they won’t be good. The reality is that the eurozone was already the