The euro weapon

["Marvin Gandall" <marvin.gandall@xxxxxxxxxxxx>]

An article in the current issue of the conservative weekly Spectator
comments on mounting rumours that an international move is afoot to check US
unilateralism by replacing the dollar with the euro as the world’s reserve
currency.

If oil and other commodity producers start insisting on payment in euros
rather than dollars, the argument goes, other exporters will follow suit,
central banks will alter the composition of their reserves, the dollar will
start to collapse, and the US government will be forced to retrench by,
among other things, cutting back on its military adventures abroad and
seeking international economic cooperation.

But, as the Spectator’s Simon Nixon warns, it is a strategy fraught with
risk: an uncontrolled collapse of the already shaky dollar could plunge the
world economy into a deep depression.

The US economist Howard Wachtel, writing in Le monde diplomatique, notes the
historic European economic interest in supplanting the rival American
currency with its own, but is sceptical the euro can dominate because of
constraints within the EU’s financial system. In any event, it is doubtful
European leaders would – at least for now – seriously embark on a course of
euro supremacy for fear of the profound crisis this would engender in their
relations with the more powerful US.

Both articles reproduced at www.supportingfacts.com.

Please send an e-mail with “unsubscribe” in the subject line to
supportingfacts@xxxxxxxxxxxx if you don’t want to receive occasional e-mail
referrals to articles from us.



~~~~~~~
PLEASE clip all extraneous text before replying to a message.