Euro Continues To Struggle With Meeting Between France And Germany In Focus
The euro began the week below $1.29 as the region’s economy continued to sag.
The common currency traded at $1.2826 at 6:00 GMT ahead of a meeting between German Chancellor Angela Merkel and her French counterpart Manuel Valls.
The two nations are set to discuss how France can implement the necessary structural reforms to lower its budget deficits. The Wall Street Journal reported that German officials have said that the object of the meeting is to confirm that French lawmakers can commit to the necessary reforms after years of missing eurozone budgetary requirements.
French officials have said they will not be able to meet eurozone deficit requirements until 2017, two years later than the set deadline. Nations like Portugal, Ireland and Spain will be watching the outcome of the meeting as they have all been forced to undergo strict austerity measures in order to meet eurozone requirements.
If France continues to miss deadlines, other nation’s that have suffered through unpopular cuts will likely see it as a double standard, further aggravating a growing nationalist movement.
Several countries throughout the eurozone have seen a rise in support for radical nationalist parties whose agendas include doing away with the euro.
The recent referendum vote in Scotland, although unsuccessful, may have reignited support for such nationalist parties across the eurozone. Sky high unemployment coupled with continuously disappointing economic data has many losing faith in the direction the region is heading.
The European Central Bank announced two stimulus packages over the summer which it says are designed to boost banks’ lending to businesses. However, the effects of these packages have yet to be observed in the region’s economic indicators.
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