Euro vs. US dollar - Garner Ted Armstrong Evangelistic Association https://www.garnertedarmstrong.org Let No Man Take Your Crown Mon, 24 Dec 2018 14:44:13 +0000 en-US hourly 1 https://www.garnertedarmstrong.org/wp-content/uploads/2024/05/cropped-Screen-Shot-2024-05-16-at-1.06.13-PM-32x32.png Euro vs. US dollar - Garner Ted Armstrong Evangelistic Association https://www.garnertedarmstrong.org 32 32 ‘Let’s switch to euro’: Russia backs EU’s bid to shift away from dollar, economy minister says https://www.garnertedarmstrong.org/lets-switch-to-euro-russia-backs-eus-bid-to-shift-away-from-dollar-economy-minister-says/?utm_source=rss&utm_medium=rss&utm_campaign=lets-switch-to-euro-russia-backs-eus-bid-to-shift-away-from-dollar-economy-minister-says Mon, 24 Dec 2018 14:44:13 +0000 http://www.garnertedarmstrong.org/?p=8445 US dollar and Euro banknotes © Reuters / Dado Ruvic Since both Russia and the EU are not dollar-based, it would be more beneficial for both to switch to euro in energy resource trading, Russian Economic Development Minister Maxim Oreshkin … Read More

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US dollar and Euro banknotes © Reuters / Dado Ruvic

Since both Russia and the EU are not dollar-based, it would be more beneficial for both to switch to euro in energy resource trading, Russian Economic Development Minister Maxim Oreshkin said in an exclusive interview to RT.

One of the leading figures in charge of Russia’s economy, Oreshkin, sat down with RT correspondent Ilya Petrenko, to discuss a wide range of economic issues – from the current state of the ruble to cooperation with foreign players.

The minister believes Russia-EU economic ties are currently experiencing a real “renaissance,” adding that despite all the political “buzz” the number of bilateral projects is rapidly increasing. Meanwhile, Moscow fully backs the bloc in its recent initiative for wider use of the euro in the international arena, especially in the energy industry, said Oreshkin.

“If you look [at Russia’s relations with the EU]…you will see cooperation and support from Russia in the current plan of increasing the role of the euro which was recently introduced by the European Commission,” the minister told RT.

The EC issued its proposal to boost the common European currency on December 5 in an apparent bid to challenge the dominance of the US dollar. The Russian economic development minister stressed that while for Russia the share of the dollar in trade is declining, it seems irrelevant to continue trading with its EU partners in dollars, given that both Moscow and European states do not use it as a national currency.

Russia is not a dollar country, Europe is, you know, not dollar based… but for some reason we’re trading energy resources in dollars,” Oreshkin said. “So I believe we should think about switching at least to the euro as a more common currency both for Russians and the Europeans.”

During the interview, the minister also noted that the trade turnover between Russia and Europe saw “double digit” growth over the past two years – 23 percent in 2017 and 21 percent in 2018. At the same time, Moscow and its European partners are engaged in a vast number of projects, including large scale ones, such as the construction of new nuclear reactors in Hungary and Finland, as well as the Nord Stream 2 natural gas pipeline.

For more stories on economy & finance visit RT’s business section

Source: https://www.rt.com/business/447292-russia-euro-trade-vs-dollar/

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]]> Italian banks are reeling. A budget fight with Europe won’t help https://www.garnertedarmstrong.org/italian-banks-are-reeling-a-budget-fight-with-europe-wont-help/?utm_source=rss&utm_medium=rss&utm_campaign=italian-banks-are-reeling-a-budget-fight-with-europe-wont-help Tue, 23 Oct 2018 02:52:41 +0000 http://www.garnertedarmstrong.org/?p=7638 Italy is battling the European Union over government spending levels. The country’s banks may end up paying the price. The European Commission rebuked the Italian government on Tuesday over a draft budget that calls for a sharp spending increase in … Read More

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Italy is battling the European Union over government spending levels. The country’s banks may end up paying the price.

The European Commission rebuked the Italian government on Tuesday over a draft budget that calls for a sharp spending increase in violation of EU rules. Italy will have to back down or face fines.

The escalation caused Italian stocks to drop and government bond yields to rise, pushing up borrowing costs. The euro slipped against the US dollar.

Italian banks own huge amounts of the government’s $2.6 trillion of debt, and investors have punished the sector this year as the value of those bonds has dropped.

An extended budget battle between the country’s government and the European Union could cause bond prices to dip further, eroding the financial position of banks.

“Italian banks are directly exposed … through their holdings of Italian government debt,” Fitch Ratings warned last week. “Many of the country’s banks hold large amounts of Italian sovereign debt relative to their capitalization.”

Italy’s banks have been struggling for years with high costs, low returns and over 200 billion ($229 billion) worth of bad loans. Fitch analysts said that the sector has gotten better at dealing with bad debt, but they warned that progress could stall if investors are scared off by the government’s economic plans.

“We can get into a situation where things were slowly getting better, to one in which banks are again under pressure,” said Federico Santi, an analyst at the Eurasia Group.

Shares in Banca Monte dei Paschi di Siena (BMDPY), the world’s oldest lender, are down a staggering 62% since January. Intesa Sanpaolo (IITSF) has lost 29% in the same period, while UniCredit (UNCFF) is down almost 28%.

The stock declines reflect investor fears over the strength of the banks and the election of a government formed by populist parties who have at times questioned whether the country should continue to use the euro.

Italy has spent tens of billions of euros in recent years propping up the banks, which has in turn put more pressure on the government’s finances.

Declining bond prices weaken the balance sheets of banks that hold government debt. Banks that get into trouble may then require bailouts that stretch government finances further.

“It’s the infamous doom loop between the government and banks,” said Santi.

Investors are also worried about the risk of contagion because roughly one fifth of Italy’s government bonds is held in other eurozone countries.

“Linkages through the banking system tie Italy closely to its European partners,” said Holger Schmieding, chief economist at Berenberg bank.

Investors will be watching carefully to see how Italy responds to the EU ultimatum. While the country has three weeks to revise its budget, Standard & Poor’s will update its rating of government debt on Friday.

“It is tempting to try to cure debt with more debt, but at some point the debt [becomes] too heavy and at the end of the day, you end up having no freedom at all,” Valdis Dombrovskis, vice president of the European Commission, said during a press conference on Tuesday.

Source: http://www.erienewsnow.com/story/39343616/italian-banks-are-reeling-a-budget-fight-with-europe-wont-help

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