Main focus of Monday, May 17, 2010

Financial markets tremble over the euro

The euro fell below 1.24 dollars on Friday for the first time in 18 months, putting a strain on global financial markets. The press writes that Europe's currency is becoming less dependable as it loses in value, but cautions at the same time against excessive concern.

Les Echos - France

The crisis of the euro is also causing headaches in the US, writes the business paper Les Echos: "Does America only get interested in Europe when Europe is faring poorly? ... Traditionally it's Europe's excessive weaknesses that trouble the United States. Today these weaknesses are ... monetary and economic in the face of rampant speculation. ... What if the collapse of the euro prefigured that of the entire Western financial and monetary system, shattering all of America's efforts over the last months and nipping the tentative economic revival in the bud? And what if Greece's collapse heralded that of California which - notwithstanding the obvious differences in size and situation - remains a definite possibility? (17/05/2010)

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La Stampa - Italy

Fluctuating exchange rates are nothing unusual in times of crisis, the liberal daily La Stampa writes, and urges the EU countries to redouble their efforts to formulate a common strategy: "The crisis of the euro is being exaggerated. There was a time when its exchange rate wasn't much higher than it is now and people were worried that it was too high. ... A short term devaluation is normal and a low exchange rate can have a positive effect for the Eurozone if the individual EU countries do indeed pass austerity packages. ... Since last week Europe has been sending the message that it intends to combat the crisis with renewed vigour and improved coordination of economic and fiscal policy. The will to achieve greater economic and political cohesion comes late and for now it remains more an intention than reality. Europe therefore needs to make it clear that it is taking the matter seriously, both in Brussels and within the individual countries." (17/05/2010)

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Latvijas Avīze - Latvia

The Eurozone may be facing a wave of drastic economic measures that could considerably lower its level of prosperity, the daily Latvijas Avīze writes: "Many of us who live in the former East Bloc cherished the dream of one day living like Western Europe. A proof of this desire was the term 'Euro-modernisation' which appeared in a growing number of advertisements: any self-respecting company offered this kind of modernisation according to European standards. But today this dream could be fulfilled in a very different way because some new EU members like Slovenia and Estonia are rushing ahead while the old EU members are falling back. A growing number of them now need this kind of comprehensive modernisation, even though most of them don't have a precise plan or clear estimates of the costs at present - and also don't know whether the moving of a wall will cause the entire construction to collapse."  (17/05/2010)

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