The eurozone has recently been transmitting signals about positive changes. These changes are viewed as the first step towards the resolution of the financial and economic crisis in the area.
However, some experts assume that the eurozone is still too far from coming out of the crisis. Robert Zoellick, ex-President of the World Bank, is one of them. Not so long ago, he shared his opinion on the economic and financial prospects of the eurozone and the USA. Let’s have a closer look at his standpoint.
Winning Some Time
Robert Zoellick says that the situation in the eurozone has recently stabilized a little. This is confirmed by the absence of negative news as well as the current dynamics of the common European currency against other majors. The stabilization came as the result of the European Central Bank’s efforts. In particular, he assumes that the ECB managed to buy some time, thereby postponing a long-term decline. This time should have been used to work out really efficient anti-crisis measures, which are usually unpopular.
The famous economist says that it is too premature to mention any major changes because the EU will still have to implement a number of fundamental and structural reforms. The results are hard to anticipate. The major reforms will concern Spain and Italy as these countries have recently changed their governments. They will have to prove that they can run a crisis-ridden economy. Greece is a separate story. The Greek authorities say that have to work under severe populist pressure. Therefore, the crisis is far from being over, Mr. Zoellick says. He shares the same viewpoint with Mario Draghi, President of the ECB, who urges everyone to keep making new steps towards the resolution of the crisis.
Being a supporter of globalization, Mr. Zoellick offers to create a transatlantic free trade zone. The Vice-President of the USA has recently backed this idea. However, at this point, it is difficult to estimate the level of seriousness of this idea. At the same time, he assumes that the very idea can push European authorities towards implementing structural reforms and improving the competitiveness of European exports.
EURUSD: Near-Term Prospects
Mr. Zoellick’s words are definitely a bearish factor for the Euro currency. They a capable of causing a retracement move in the market of EURUSD. Another potential bearish factor is that the UK authorities may well hold a referendum on whether the country should stay in the EU or leave it.
At this point, EURUSD is trading within a wide price range between 1.371 and 1.3458, reports. The experts anticipate a period of consolidation after the recent rally.
