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June 01, 2005
Hans Eichel: Previous Reports Of The Euro's Death Were Greatly Exaggerated
Yesterday (hat tip a Fistful of Euros), from Bloomberg:
The [euro] also weakened after Germany's Stern magazine reported German Finance Minister Hans Eichel and Bundesbank President Axel Weber discussed a possible failure of European monetary union...
The euro retreated from as high as $1.2341 after the magazine said Eichel and Weber, who represents Germany on the ECB's policy committee, discussed the euro's potential failure with economists. The magazine quoted Joachim Fels, chief fixed- income economist at Morgan Stanley, who Stern said took part in the meeting.
Today, from Forbes.com:
German Finance Minister Hans Eichel does not believe the EU monetary union will collapse and he is not interfering in the monetary policies of the European Central Bank, a spokesman for Eichel told AFX News.
The spokesman was reacting to a Stern magazine report which cited sources as saying Eichel's ministry has blamed the euro for the continuing weakness in Germany.
Eichel does not see the danger of a collapse of the monetary union. That is an absurd assumption reported by Stern, the spokesman said.
Eichel believes the monetary union is a success. As in the past, we do not interfere in monetary policies' in the euro area, he added.
UPDATE: Edward provides yet more insight at afoe, here and here, and says "I think this story may run and run over the months to come."
June 1, 2005 in Europe, Exchange Rates and the Dollar | Permalink
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Listed below are links to blogs that reference Hans Eichel: Previous Reports Of The Euro's Death Were Greatly Exaggerated:
» He Would Say That Wouldn't he from A Fistful of Euros
For those who are not old enough to remember, these are the immortal words of Christine Keeler. Now throwing a link quickly back across the Atlantic, Dave Altig at Macro blog picked up my ECB post and added a response... [Read More]
Tracked on Jun 1, 2005 8:49:52 AM
» He Would Say That Wouldn't he from A Fistful of Euros
For those who are not old enough to remember, these are the immortal words of Christine Keeler. Now throwing a link quickly back across the Atlantic, Dave Altig at Macro blog picked up my ECB post and added a response... [Read More]
Tracked on Jun 1, 2005 8:54:18 AM
» He Would Say That Wouldn't he from A Fistful of Euros
For those who are not old enough to remember, these are the immortal words of Mandy Rice Davies. Now throwing a link quickly back across the Atlantic, Dave Altig at Macro blog picked up my ECB post and added a... [Read More]
Tracked on Jun 1, 2005 11:15:05 AM
Comments
Posted by:
edward |
June 01, 2005 at 08:36 AM
I've just linked-back to you. Two pairs of eyes are better than one :).
Posted by:
edward |
June 01, 2005 at 08:49 AM
One of the three has got a big mouth. When I was granted a meeting by Trichet a number of years ago in another crisis era, to discuss some of my views, I certainly kept the meeting and the discussion confidential. What a shame.
Posted by:
godement |
June 01, 2005 at 12:43 PM
The title should be "Previous Reports Of The Euro's *Health* Were Greatly Exaggerated."
There are endless reasons for the euro to survive, not the least of which is that the alternatives are worse.
The real issue is why so many people were chattering and betting so heavily that the euro would rise so far above all other currencies in too short a span of time.
The other issue is the persistent tradeoff between speculative demand and economic demand for one currency over another. We gain no insight or enlightenment by keeping the two distinct forms of demand lumped together. How to separate them may be an impossible task, but we do need to resist making any long-term economic projections when foreign exchange rates can be artificially moved a significant distance by the vast amounts of private speculative capital available for such... "investement."
-- Jack Krupansky
Posted by:
Jack Krupansky |
June 01, 2005 at 02:31 PM
The interesting thing is that no-one is denying that this meeting took place. Possibly it was a lecture by Fels, where he outlined his already well know difficulties. Fels is refusing to comment.
The significant thing is that this is even coming on the radar. The euro is alive and well, but Eichel and Weber clearly feel the need to be briefed on a plan 'b' should the day ever arrive.
I think we need to take this a day at a time, and just see how long it takes the EU bankers and politicians to put the ship upright again.
On the denials, this reminds me of Christine Keeler during the Profumo affair: well he would say that, wouldn't he! :)