Originally published February 17 2015
Euro plummets as EU edges toward collapse
by J. D. Heyes
(NaturalNews) A number of financial analysts and experts believe that the euro is in grave danger of becoming extinct as a result of several converging geopolitical events that are threatening the European Union itself.
As reported by The Economic Collapse blog and other news sources, the dollar had been rising against the euro in recent weeks, a rise hastened by Switzerland's recent decision to un-peg its currency, the franc, from the euro, and by the European Central Bank's decision to implement a policy of quantitative easing which, like the Federal Reserve's QE policy, amounts to printing currency out of thin air and injecting it into the economy.
Britain's Telegraph newspaper noted that, over the next 18 months, the ECB plans to inject more than a trillion euros into the EU economy, at about 60 billion per month.
"The combined monthly purchases of public and private sector securities will amount to �60bn euros," said ECB President Mario Draghi recently, in announcing the policy. Most of the money will be used to buy debt.
"They are intended to be carried out until end-September 2016 and will in any case be conducted until we see a sustained adjustment in the path of inflation," he added, which means the package will amount to at least �1.1 trillion.
More uncertainty for Europe coming
In recent days, the euro has rebounded somewhat but initially it fell on the news, dropping to its lowest level against the dollar -- $1.13 -- in 11 years, The Economic Collapse reported.
As further noted by Michael Snyder at The Economic Collapse:
The speed at which the euro has been falling in recent months has been absolutely stunning. Less than a year ago it was hovering near $1.40. But since that time the crippling economic problems in southern Europe have gone from bad to worse, and no amount of money printing is going to avert the financial nightmare that is slowly unfolding right before our eyes.
The next challenge for the EU -- and the euro -- could come soon, and from a familiar source: Greece.
As reported by The Wall Street Journal (WSJ) and other news outlets, the far-left Syriza party has won a majority of seats in the country's parliament, meaning it will control the government. The party's young leader, Alexis Tsipras, who is now the country's prime minister, has vowed to end Greek austerity, despite a deal made with the EU a couple of years ago in order to secure bailout funding when the country teetered on financial ruin.
"Today the Greek people have written history," he said in a victory speech, according to the WSJ. "The Greek people have given a clear, indisputable mandate for Greece to leave behind austerity."
That would put Greece on a collision course with Germany and other EU nations that underwrote the bailout.
Minutes after Greek polls closed, the minister of Germany's powerful central bank, Jens Weidmann, pushed back against Tsipras' statement.
"It is clear that Greece will remain dependent on support and it's also clear that this aid will be provided only when it is in an aid program," he said in an interview with television broadcaster ARD -- meaning, a needy Greece will only receive further financial help if its leaders stick to their austerity bargain with the EU.
"Greece is two years ahead of the curve"
In exchange for a �240 billion ($269 billion) bailout, Germany insisted that Greece boost taxes and cut spending. But in the end, many Greeks backed Syriza.
"Europe is self-destructing," Polyxeni Konstantinou, a 56-year-old public-sector worker voting in central Athens, told the WSJ. "I voted for Syriza because I hope that it will help change the tragic circumstances that now govern Europe. Will Syriza be able to achieve everything it says? Probably not. But whatever it does achieve, then that will be good for Europe."
European analysts say that what has happened in Greece is just the beginning; other nations grappling with financial problems will wait to see how the Greek vote turns out, but radicalism across the continent is coming, they believe.
"Greece is two years ahead of the curve" when it comes to politics, Bill Blain, chief strategist at Mint Partners, a brokerage firm, told the WSJ. "Other countries' [radical parties] are all going to have their day fairly soon and it's really about markets trying to anticipate how other countries will follow Greece."
Sources:
http://theeconomiccollapseblog.com
http://www.telegraph.co.uk
http://www.reuters.com
http://www.wsj.com
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