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27 Jan, 2012 - Euro must fall 30% to save Europe – Roubini
Euro must fall 30% to save Europe – Roubini
Nouriel Roubini, the American economist who had anticipated the collapse of the US housing market and the worldwide recession in 2008, is now warning that the Euro needs to see a sharp fall of at least 30% to bring it in line with the US dollar, in order to save the 17-nation periphery.
During the World Economic Forum in Davos, Roubini said that only a sharp fall in the Euro could restore the stability and competitiveness in Europe.
“What is necessary is for the value of the euro to fall sharply – at least a 30% depreciation, close to parity with the dollar. Unless you restore stock and flow, the euro-zone is doomed”, he said. Roubini also added that if the Euro-zone just implements austerity measures by cutting spending and raising taxes, the recession is going to get worse.
dVfx Manager James Stanton also commented that, "If the Euro drops by 30% against most major currencies, you will see substantial investment into the stagnating European markets. With more people investing in the Euro-zone, more foreign investment will be made."
The Euro is trading at $1.31 against the US Dollar, as at the time of writing.
For a more detailed currency outlook or to find out how economic and political news could affect your currency transfers, speak to a deVere FX Manager today.
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