Why Has Bulgaria Adopted the Euro as Its Currency? With Palki Sharma

Recommendable! There are still a few EU member countries without the Euro as currency.

«Der Euro ist die Lira von heute»: Die Einheitswährung ist auf Talfahrt gegenüber Franken und Dollar

Schlagzeile des Tages! Sie scheint aber etwas übertrieben zu sein (siehe Grafik unten)

Schwäche des Euro: Die Gründe für den Rückgang zu Franken und Dollar "Der Euro zeigt sich deutlich schwächer gegenüber Franken und Dollar. Wie sich der Rückgang der europäischen Gemeinschaftswährung erklärt – und was dies für Sparer und Anleger bedeutet."

Will French Elections Trigger Another Euro Crisis? with Palki Sharma

Recommendable and concerning! France deep in government debt!

Chart of the day

Deutschland hat seine Währung aufgegeben im Glauben dass die Maastricht Vorgaben eingehalten würden! Deutschland selbst hat die Regeln insgesamt 9 Jahre nicht eingehalten.

Wie oft die EU-Länder auf Maastricht „pfeifen“ – Agenda Austria

Standortbestimmung: 10 Jahre „Griechenland-Rettung“

Sehr empfehlenswert! Gute Uebersicht zu was alles falsch gelaufen ist in den letzten 10 Jahre mit EU, Euro und Griechenland.

Die SED Kanzlerin Merkel ist eine der Hauptschuldigen. Sie hat u.a. den Bruch der no bail out Klausel (Nichtbeistandsklausel (Artikel 125 AEUV)) zugelassen!

Standortbestimmung: 10 Jahre „Griechenland-Rettung“ – Prometheus

European Court Of Justice Deferred Again To Big Government

Posted: 12/11/2018

For lack of time, I will not go into details here, but refer the reader to e.g. Source 1 and to do some research. The facts of this case have been well covered in the media for a number of years.

On December 11, 2018, the European Court of Justice decided it was OK for the European Central Bank to purchase Euro trillions of various government bonds over several years. Unfortunately, the Federal Reserve central bank also engaged in similar purchases.

This is just another example how the highest possible court (in this case the European Court of Justice) in a legal dispute about government policies rubber stamps government policies.

Clearly, this massive purchase program of government bonds is a form of government financing, which obviously contravenes the no bail out clause in European agreements about the single currency.

One can also safely assume that these justices have very limited understanding of economics.

Sources:

1. The ECB’s PSPP programme for the purchase of government bonds on secondary markets does not infringe EU law. It does not exceed the ECB’s mandate and does not contravene the prohibition of monetary financing (official press release; 12/11/2018)
2. EUGH-URTEIL : EZB-Anleihenkäufe sind rechtens (12/11/2018)

Chinese Currency Tops Euro In Trade Financing

Big Economic News Of The Week

This week (12/2/2013) it was reported e.g. here (German language) that the Chinese Renminbi surpassed the Euro in international export/import financing at 9% v. 7% for the Euro.

Bromides

In the German newspaper article above, the journalist is not remiss to mention that the US Dollar and the Euro still dominate financial transactions and the the Renminbi is primarily used in the Asia-Pacific region.

Wait and see! :-)

Lasting Large Government Bond Yield Spreads In The Euro Zone

Larger Spreads Are Good News

I think large spreads of government bond yields of southern Euro Zone countries like Greece, Italy, Spain, and Portugal versus Germany will remain for the foreseeable future which is a good thing. Finally, the capital markets are working again as they should by more realistically pricing risk. Profligate politicians will be reminded that credit has a price.

The Mirage Of Tight EMU Spreads From 1999 To 2007

If my memory serves me well then those spreads narrowed dramatically with the introduction of the Euro in January of 1999 and stayed within a tight range of roughly 50 basis points in the following years until 2007. In hindsight, this was clearly unrealistic. Just because a monetary union came into being all the risk factors that had affected individual member countries for decades all of a sudden did not seem to matter anymore. Incredible.

Higher Spreads Less Indebtedness

For instance, had Greece to pay a more realistic, higher interest rates on the issue of new government bonds it probably would not have accumulated as much debt, because Greece would have been unable to pay its obligations.