This is not good news for the EU, if I were a citizen of a member nation I would be petitioning my government for withdrawal from the EU before this gets ugly.
It would be one thing if the EU nations had all given up their national sovereignty and formed a formal "federal" style of government with a true center of power, but giving up economic soveriignty to a group in brussels that does not have to directly answer to the peoples of the member nations just seems like lunacy to me.
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The EU's emergency assistance plan has done little to bolster confidence in the euro, a concern highlighted by U.S. While House Economic Adviser Paul Volcker. On Thursday Volcker said European debt troubles could undermine the single currency.
The euro slid as low $1.2358 on electronic trading platform EBS, the lowest since October 2008. It last traded at $1.2370, 1.3 percent weaker.
"The euro hasn't derived any benefits from any budget cuts from Spain and Portugal," said Chris Turner, head of FX strategy at ING, which forecasts the single European currency will be at $1.15 in six months.
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Safe-haven buying also boosted prices of U.S. Treasury debt and the value of the U.S. dollar, which climbed to its highest level in a year against a basket of currencies.
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(Reuters) - The euro slid to an 18-month low versus the dollar and global shares fell sharply on Friday over fears that Europe's fiscal austerity plans may derail economic recovery.
Gold prices hit an all-time high as the European financial situation spurred the appetite for safer investments. The precious metal erased gains later but still ended the week about 2 percent higher.
Safe-haven buying also boosted prices of U.S. Treasury debt and the value of the U.S. dollar, which climbed to its highest level in a year against a basket of currencies.
Stocks and oil prices plunged despite data showing U.S. retail sales and industrial production rose in April. The S&P 500 and the Nasdaq fell nearly 2 percent while U.S. crude oil prices slumped nearly 4 percent.
European authorities announced a rescue plan of nearly $1 trillion for Greece and other indebted euro zone countries this week involving tough spending cuts, but investors were skeptical about weak public finances.
"If you look long-term, everyone is worried about what these austerity measures will mean in terms of growth," said Kathy Lien, director of currency research at GFT in New York.
The Dow Jones industrial average .DJI ended down 162.79 points, or 1.51 percent, at 10,620.16, while the Standard & Poor's 500 Index .SPX lost 21.76 points, or 1.88 percent, to 1,135.68. The Nasdaq Composite Index .IXIC slumped 47.51 points, or 1.98 percent, to 2,346.85.
Shares of credit card companies tumbled a day after the U.S. Senate voted to limit fees charged on credit and debit card transactions. Visa Inc (V.N) lost 9.9 percent to $77.26 and MasterCard Inc (MA.N) shed 8.5 percent to $212.45.
The MSCI world equity index .MIWD00000PUS plunged 2.4 percent, while the FTSEurofirst 300 index .FTEU3 dropped 3.4 percent.
Banks took a beating in Europe, with the STOXX Europe 600 banking index .SX7P falling 5.2 percent. Spanish banks Santander (SAN.MC) and BBVA (BBVA.MC) fell 9.0 percent and 7.6 percent, respectively.
U.S. crude oil fell 3.75 percent to $71.61 a barrel, the lowest close since February 5.
EURO BATTERED
The EU's emergency assistance plan has done little to bolster confidence in the euro, a concern highlighted by U.S. While House Economic Adviser Paul Volcker. On Thursday Volcker said European debt troubles could undermine the single currency.
The euro slid as low $1.2358 on electronic trading platform EBS, the lowest since October 2008. It last traded at $1.2370, 1.3 percent weaker.
"The euro hasn't derived any benefits from any budget cuts from Spain and Portugal," said Chris Turner, head of FX strategy at ING, which forecasts the single European currency will be at $1.15 in six months.
"People are either concluding that these cuts will be unsuccessful and debt sustainability remains a key issue, or they will be successful in aggressive fiscal tightening and that these economies would slow aggressively and the European Central Bank has to keep interest rates low," he added.
Gold prices, which often climb in times of turmoil in financial markets, soared to a record high of $1,248.95.
But investors started selling the metal when it failed to break above the psychological level of $1,250. Part of the sales also came from investors who needed to sell gold to cover for losses in stock markets, traders said.
The precious metal later traded practically flat at $1,230.05 an ounce.
The safe-haven appeal of U.S. Treasuries also rose dramatically, with the price of the benchmark 10-year note up 21/32, with the yield at 3.4571 percent.
Investors' anxiety toward riskier assets also has been reflected in the movement of cash between markets this week.
Money market funds, perceived to be among the least risky investments, attracted new money this week for the first time since January as investors moved back into cash, data from EPFR Global showed.
At the same time, the amount of money pulled from risky, high-yield bond funds hit a five-year high, while equity funds in emerging markets also suffered.
A lot of European money has been spent helping the UK's economy. Toyota and Nissan plants were planned to be in mainland Europe, but the EU moved them to Sunderland and Derby because they wanted to regenerate those areas. Also Liverpool and Glasgow being selected as European key cities led to a lot of tourism in those areas.
Also free movement of people and labour and capital. Agriculture subsidies so that our farmers actually have competitive jobs. A charter of human rights. Free trade means lower prices for some goods (mainly cars).
Plus it's the same price to use my mobile in Europe as it is at home.
Obviously there are downsides:
Agricultural policy has inflated food prices a bit
Cost of bureacracy (a necessary evil?)
For me the benefits outweigh the disadvantages. You hear a lot of people complaining that 'Brussels is taking away our human rights' or some old bollocks like that, but given that the UK is one of the worst countries in the EU human rights abuses, and the EU charter of human rights gives a lot more freedom than a lot of current laws in the UK, I think it's a good thing.
The following users say "It is so good to hear it!":
Well you would certainly be a better judge of that than I would as I am not familiar with UK laws. Let me ask you this, how does the EU charter of human rights compare with America's Bill of Rights? I am seriously interested BTW not trolling you. Perhaps I should read the EU charter of human rights. Do you have a link handy?
So ratfink, in a UK court do you have the protection of the EU charter of human rights over British/UK law? For example if under UK law you did not have a given right but under the EU charter of human rights you did are UK courts bound by the UK's membership in the EU to rule based on the EU charter of human rights in a situation where UK law conflicts?
Weeeeeelllllllllllllll as of 2009 (Lisbon Treaty), the laws of the member states must comply with the laws of the Charter. But the UK opted out on a few issues - stuff like how easy it is for workers to go on strike.
I think Poland has (or had) opted out over indirectly discriminating against homosexuals. Pretty disgusting really. Only a couple of other member states had opt-outs, usually just one I think.
The following users say "It is so good to hear it!":
^And what about Spain? They are in the same boat as Greece and Portugal as far as having to pull austerity measures. The EUR has fallen 7 cents in the last week against a rising USD. 7 cents is a huge drop in 1 week m8.
^And what about Spain? They are in the same boat as Greece and Portugal as far as having to pull austerity measures. The EUR has fallen 7 cents in the last week against a rising USD. 7 cents is a huge drop in 1 week m8.
spain recently posted a .2% gain in economic growth... while thats not ALOT they did not SHRINK - they have the capability to recover and pay off debts...
the bailout money hasnt been cleared yet.... for all we know they can pull the plug and simply kick out greece and maybe portugal.
there is nothing to be said about the intrinsic value of the euro by looking at it from a one week window ... the reason for such a steep decline is simply speculation... traders are making $$$ off this. - check the value in half a year - portugal and greece are <5% [or so] of euro gdp... it will recover ...
spain recently posted a .2% gain in economic growth... while thats not ALOT they did not SHRINK - they have the capability to recover and pay off debts...
the bailout money hasnt been cleared yet.... for all we know they can pull the plug and simply kick out greece and maybe portugal.
there is nothing to be said about the intrinsic value of the euro by looking at it from a one week window ... the reason for such a steep decline is simply speculation... traders are making $$$ off this. - check the value in half a year - portugal and greece are <5% [or so] of euro gdp... it will recover ...
I hope your right but I don't think that is the plan.
Euro at 18-month low on debt woes
Re: Euro at 18-month low on debt woes
