Hi,
No doubt a minority view for now, but in evaluating the Euro's prospects, we think constantly in the context of "sick Old Europe", but we underestimate the potential of the size of the "new" EU economy, which with all its problems, is still a large, and mostly self-trading economy, without the size of the huge trade gaps and external debts to parties outside the EU (as the case for USD).
Add to this, the sizable momentum provided by the following:
- emerging power of neighbouring Russia and its satellite states as the leading energy and strategic commodities supplier to the Region and indeed, the whole world,
- strategic 'rich' foreign investors (surplus running central banks, corporates) increasingly wanting to diversify their holdings from USDs to a wider portfolio,
- the almost certain but substantial decline in the price of energy after the Iraq issue is resolved in a couple of months providing instant relief to EU citizens (huge 'tax' break), and I believe most importantly
- when the Brits finally decide to get 'off the Thatcherite pot' and jump into the rough and tumble Continentals' bandwagon, at least directionally, by, I believe, year-end 2003 leading to an even bigger, more credible Euroland
we could see a much more convergent, and positive outlook to the Euro than is widely published today.
Selva |
