Increases In Euro Breakup Talk Weighed Down The Currency
German officials are debating what was unthinkable to the euro’s architects that a currency union designed in its founding treaty to be unalterable may not be the case. German’s Finance Minister said on 12 March that expulsion from the euro may be the ultimate penalty for serial violators of debt rules. Under current European Union (EU) law, however, ejection is “legally next to impossible”, the European Central Bank (ECB) said in December, as changing the treaty requires unanimity among the EU’s 27 governments. Markets have rendered a mixed verdict on the euro’s resistance to the crisis. The currency fell below US$1.24/euro for the first time since November 2008 from a record high of $1.60 in July 2008 but still leaves it above the starting rate of $1.17.
The World Economy... - 17/5/2010
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