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๐ช๐บ Eurozone on the verge of reforms: currency moves in sync with the risk
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๐ Euro hints at a recovery in the first quarter, although the markets are lacking a foundation for this process. At end of December ECB officials began talking about a possible rate hike by the end of 2022, but the official position has not changed yet.
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ECB's policy normalization will be very cautious โ the markets remember well the consequences of the debt crisis a decade ago. Main speculative factor for euro in 2022 will not be the ECB's policy, but the prospects for structural reform in Eurozone. The French President, together with the Italian Prime Minister, proposed to adjust the fiscal rule on the annual budget deficit for the participating countries (no more than 3%). In addition,
Macron and Draghi are trying to persuade the new German government to create a new "EU rescue fund", within which the debts created during the pandemic will be paid jointly by all EU countries.
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New chancellor has not yet responded to the initiative โ this is a too complicated topic for him. But just in case, Scholz supports his finance minister, who opposes a new redistribution of German taxpayers' money in favour of the southern EU countries.
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France will preside over the EU in the first half of next year, and therefore some of the ideas on governance reforms can be adopted. To do this,
Macron needs to win the presidential elections in April, but, alas, he has little chance.
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For a whole year, euro tried to grow on Covid optimism: the President of the European Commission, Ursula von der Leyen, said that 78% of the adult population in the EU had already received both vaccinations against coronavirus. And now the current European demand for the purchase of risk, analysts associated with fact that Omicron strain is considered less lethal, that is, victory over the pandemic is already near.
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What does this mean for the euro rate, you will have to ask the dollar, or rather, the Fed. And the answer will not please the Euro-optimists.
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Profits to yโall!