Earlier this week, the Euro bashers were out in force: the single currency was supposedly about to come to grief, the IMF would have to be summoned to help with the fallout from the Greek crisis, and more Eurozone economies would follow, as in a line of falling dominoes.
It hasn’t happened. Instead, EU leaders have agreed to help Greece with its debt problem, with the detail more than likely to emerge at next Monday’s meeting of finance ministers. But then, if you read the kind of account coming out of the Murdoch Times, you might think that catastrophe was imminent, given the headline “Markets target Euro as doubt swirls over Greek rescue”.
Rupe, bless him, has never loved the EU, and so his media empire wastes no opportunity to put the boot in: the Times article attempts – rather too dramatically – to overstate the movement of the Euro against the US Dollar. In its fourth paragraph, it can be seen that the actual range being discussed is of two-thirds of a percentage point. Even the Maily Telegraph is more measured in its coverage.
Of course, we’ve been here before. When the Euro came into being back at the turn of the Millennium (well before notes and coins started circulating), it was dubbed the “toilet currency” by more avaricious speculators, who proceeded to take short positions in the currency, with the effect that one pound, during Spring that year, would buy around 1.7 Euro.
But the Euro recovered, and has since hit a high of almost 1.6 US Dollars. Even as it is supposedly under pressure, that rate is still around 1.36, well above the 1.18 at which it set out back in January 1999. I suspect that it will still be around for many years to come.