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The Hague - Last week’s decision by the European Central Bank (ECB) to start buying bonds worth €60bn per month will likely push the euro’s value down to parity with the dollar or even below.
This is the prediction of several monetary experts in Europe, as reported by the German quality daily Die Welt.
The Greek election, won by the left-wing populist party Syriza, will probably add somewhat to the weakening of the euro, especially if this leads to Greece leaving the eurozone.
READ: Greek leftist leader vows end to austerity
Since the inception of the euro in December 2002, the unit has mainly strengthened. In recent weeks this has changed, and the rate of weakening will probably increase, experts predict.
According to the Deutsche Bank, the euro will sink to the same level as the dollar by September or October. The analyst George Saravelos predicts that the euro will cost 95 US cents in two years, and experts at the credit agency Goldman Sachs say that this may even deteriorate further to 90c by the end of 2017.
The basic reason, experts say, is the fact that the US Federal Reserve has put the brakes on the creation of dollars. Across the Atlantic, ECB president Mario Draghi’s decision to start buying bonds to the tune of billions amounts to large-scale printing of money. In other words, the American and European monetary policies are drifting apart.
Draghi’s decision is a defeat for the northern Europeans, notably the Germans, Dutch and Scandinavians. It is well known that German Chancellor Angela Merkel, and Jens Weidmann, president of the Bundesbank, were against Draghi’s initiative, as was Klaas Knot, president of the Nederlandsche Bank (the Dutch reserve bank).
But Merkel shied away from resisting Draghi too much for fear of the ghosts of the past – German domination of Europe – being thrown at her.
This is the prediction of several monetary experts in Europe, as reported by the German quality daily Die Welt.
The Greek election, won by the left-wing populist party Syriza, will probably add somewhat to the weakening of the euro, especially if this leads to Greece leaving the eurozone.
READ: Greek leftist leader vows end to austerity
Since the inception of the euro in December 2002, the unit has mainly strengthened. In recent weeks this has changed, and the rate of weakening will probably increase, experts predict.
According to the Deutsche Bank, the euro will sink to the same level as the dollar by September or October. The analyst George Saravelos predicts that the euro will cost 95 US cents in two years, and experts at the credit agency Goldman Sachs say that this may even deteriorate further to 90c by the end of 2017.
The basic reason, experts say, is the fact that the US Federal Reserve has put the brakes on the creation of dollars. Across the Atlantic, ECB president Mario Draghi’s decision to start buying bonds to the tune of billions amounts to large-scale printing of money. In other words, the American and European monetary policies are drifting apart.
Draghi’s decision is a defeat for the northern Europeans, notably the Germans, Dutch and Scandinavians. It is well known that German Chancellor Angela Merkel, and Jens Weidmann, president of the Bundesbank, were against Draghi’s initiative, as was Klaas Knot, president of the Nederlandsche Bank (the Dutch reserve bank).
But Merkel shied away from resisting Draghi too much for fear of the ghosts of the past – German domination of Europe – being thrown at her.
