Silver lining for European exporters amid Greek debt panic
The changed currency balance is also being seen as a chance to boost Europe's trade with the rest of the world.Brussels – Market panic over strained Greek, Portuguese and Spanish budgets has generated a silver lining for exporters in Europe's under-pressure euro currency zone, analysts said.
A sustained fall in the strength of the euro -- from levels where national leaders were panicking at the thought of China and the United States of hovering up sales -- has given renewed hope.
The euro, which is shared by 16 economies across continental Europe led by Germany and France, fell on Friday to 1.3586 dollars -- its lowest level against the US currency in more than eight months.
Still only just above 1.37 dollars on Monday, the slide remains deeply worrisome because it reflects fears over deteriorating debts for weak eurozone countries, and investors' decisions to buy safer assets.
But, after months of growing political disquiet during which China overtook Germany as the world's top exporter, the changed currency balance is also being seen as a chance to boost Europe's trade with the rest of the world.
The weaker euro "is probably one of the beneficial outcomes of what is happening at the moment," said Howard Archer, chief economist for IHS Global Insight, a research consultancy in London.
The fall was "bound to be a boon to European exporters," he added.
"While Germany may be pretty irked by what's going on in Greece, its exporters are still probably licking their lips."
Following a meeting of international economic powers in Canada on Saturday, France's Finance Minister Christine Lagarde offered similar optimism.
"We have always complained about the (US) dollar being too strong," she said, adding: "This is clearly an improvement."
European employers were already warning back in 2007 that the euro was too high at over 1.40 dollars. In the summer of 2008, it rose above 1.60 dollars.
The chief executive of Airbus parent company EADS, Louis Gallois, warned in 2008 that the high value of the euro was threatening European manufacturing.
The euro "is in the process of suffocating a good portion of European industry by eating away at its export markets," he told the daily Le Figaro.
Falling later that year, the euro then crept back upwards right through 2009 -- causing increasing consternation that Europe's fledgling and fragile recovery, miles off the pace in either China or the United States, could be derailed.
Eurozone growth was just 0.4 percent in the third quarter of 2009, whereas the United States already posted 5.7 percent growth in the fourth quarter and the International Monetary Fund predicts 10 percent for China in 2010.
AFP / Expatica