The Future of the Euro is in Question Now
The Germans are challenging ECB measures again, but this will put the future existence of the Euro into question
Comments From Ex-German Finance Minister, Wolfgang Schaeuble
- It is very possible the existence of the euro is now put into question
- Because every national constitutional court can decide for itself
- The situation makes nobody happy
- It is difficult if the German court cannot accept the ECJ decision
- But it is also not easy to refute the German decision
This is going to be a key risk factor to consider for the single currency in the bigger picture as we continue to navigate through these testing times. Although, I think that this virus outbreak, followed by the house arrest of the entire continent and the economic meltdown, will eventually lead to the collapse of the EU. Italy will be on the way out soon and France will probably follow. The ECB responded earlier to the German Constitutional Court as below:
The Governing Council remains fully committed to doing everything necessary within its mandate to ensure that inflation rises to levels consistent with its medium-term aim and that the monetary policy action taken in pursuit of the objective of maintaining price stability is transmitted to all parts of the economy and to all jurisdictions of the euro area.
The Court of Justice of the European Union ruled in December 2018 that the ECB is acting within its price stability mandate.”
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