European news. 50 top-managers from the largest companies in Germany and France intend to place the advertisement of international European currency in European newspapers. The reason of this costly action is claimed to be a striving to maintain jobs.
When simple words do not help, bosses of the largest groups of companies will start an advertising campaign. They have decided that it is best to make it universal and involve as much press as possible. About 50 heads of the largest German and French companies have placed in newspapers an appeal to politicians to save the poor countries of European Union.
“The crash of Euro would become an unpleasant step back for the whole Europe”, financial experts inform.
In his interview in the Bild newspaper the Chairman of the supervisory board of ThyssenKrupp AG Gerhard Cromme, one of the company’s initiators, reminded: “Since Euro appeared, about nine million jobs appeared in Euro zone due to the stability of the currency.” All these jobs are to be maintained. However, the question about jobs and people’s welfare is mostly likely put on the back burden by Cromme and his colleagues.
Euro brings income to the enterprises
Number one concern is completely different interests: this refers to billions of income due to taxes, which settle in the pockets of the heads of the groups of companies via export into certain countries of Euro zone. In such a way, up till now, mostly Germany jointly with its enterprises was gaining substantial benefit from Euro via charges. Since Euro was introduced, the yearly level of inflation here has reduced almost two times in comparison with the times of German marks.
Almost two thirds of the whole export of German enterprises is directed into Euro zone. Economists have calculated that income from export has risen by 15 percent since Euro was introduced. Due to the common currency, inconvenient for calculation and costly risks, which are connected with exchange rate relationships, are outdated.
What do groups of companies lose from the spreading crisis?
What European crisis, which is evoked by high foreign debt, can turn into for companies can be observed on the example of trade with Greece.
- Import volume. Import of the misstepped country for the first time during the first three months of the present year has dropped by 3.7 percent, in other words, by half a billion Euro. This yet can be tolerated. The price of goods with a “Made in Germany” mark, which has been sent to Greece during the same time period, has also considerably dropped. The overall volume of export into Hellas has dropped by 12.6 percent to the level of 1.3 billion Euro. Moreover, judging from current events, this drop is yet to be continued.
- Export volume. At present, it has not considerably influenced the export industry of Germany. Revival due to the increase of export into the countries that do not constitute EU the overall German export in the first quarter of 2011 has reached the level of 260.8 billion Euro. In comparison with last year it has risen by 18.8 percent. Shipment of goods to Turkey has risen by the whole 56% and amounted to 5.2 billion Euro.
- Rescue of Greece. In comparison with this, cooperation of enterprises with Greece is of minor importance. However, the dangerous condition can be worsened if the crisis, like fire, will flop to other countries of Euro zone.
In order to prevent this, bosses have started this large-scale campaign. However, their public appeal to rescue Greek economy by additional billions from citizens’ taxes sounds not very convincing. Their advertising text does not inform what they are going to invest their own money or the money that their groups of companies direct for the rescue of Greece.
What have the leading financial experts addressed the government with?
“We, German and French entrepreneur, who bear responsibility for the turnover of 1.5 trillion Euro and 5 million of workers worldwide, are concerned about the future of Euro as well as about the mutual European economic and currency union. (...) Euro has proved itself as the second in terms of importance currency after dollar and strengthened the importance of European economic strength. At the same time as it was introduced, there has also appeared a common market with a single currency and no fluctuations of exchange rates. This market has provided us all with job and created our welfare. (...) In order to eliminate the possibility of crisis emergence, which we are currently experiencing, we have to strengthen the initially agreed stabilization rules as well as to ensure their observation. Suggestions of excluding some countries from the list of EU members or splitting the union into northern and southern communities are a totally wrong way. (...) We address politicians with a clear appeal to contribute by all means to the creation of conditions, in which Euro will be stable and competitive. This is the basis of European welfare in future.”
The Editorial Board of “Market Leader” magazine, jointly with experts of Forex Academy and Masterforex-V stock exchange, holds a questionnaire in traders’ forum: how effective will the first large-scale advertising of currency in the world become and will the attempt to stabilize Euro succeed?
• very effective – this will become the additional step towards strengthening Euro;
• partially effective – there will be some results of their efforts, but this will not be enough;
• not effective – money into the wind.
