The world’s leading economists and financial experts have recently gathered in Davos to discuss the future of the common European currency. The experts say that it is financial stimuli, not austerity, that should be the means of fighting the eurozone crisis.
Nouriel Roubini is sure that Greece will eventually leave the eurozone and some eurozone members will follow it later. George Soros says Europe’s reaction to the crisis is wrong once again.
Will the Euro manage to survive the severe crisis?
Expert Opinion: What Is Wrong About Europe’s Actions?
The World Economic Forum in Davos (Switzerland) has just begun. There are 2600 participants, including politicians, bankers, businessmen, economists and big-scale investors. The major issue on the agenda is how to help the eurozone overcome its debt crisis.
The world’s leading financiers criticized the EU’s efforts to overcome the crisis:
George Soros:
According to the billionaire, the EU authorities did everything wrong, thus showing they do not understand the essence and the mechanism of financial markets.
Mr. Soros says Europe should start reforms instead of trying to solve the endless chain of debt problems. Moreover, the austerity measures implemented in most countries to make their budgets fit into the 3% limit may eventually lead to disintegration.
George Soros sees a way out of the crisis in creating a single financial authority with large powers to monitor the national budgets of all the EU members in order to prevent the 3% limit violation. The EU could have created such an institution in late 2011. However, Great Britain blocked the idea while being afraid to lose its sovereignty.
Another crucial step on the way out of the crisis is emitting common euro bonds. This idea was blocked by Germany. Angela Merkel says it is too early to take such a step.
He supported the idea offered by the Bank of Italy. It is essence is to allow the EFSF to buy short-term low-yield notes issued by countries with high public debt.
And finally, according to George Soros, political confrontations escalate the eurozone crisis, which may eventually lead to the disintegration of the EU and the end of the common European currency.
Nouriel Roubini:
Roubini says that Europe needs a massive financial expansion and a set of fiscal and political stimuli to overcome the crisis. This is the only way to save the eurozone, he says.
According to him, EURUSD should decline by 20-30% in order to help the weak European economy.
Morgan Stanley:
Steven Roach from Morgan Stanley shares Nouriel Roubini’s point of view, saying that Europe cannot fight the crisis only with the help of austerity measures. A fiscal expansion is needed.
Such countries as Germany set standards, which are too high for other eurozone members to meet them. It leads to internal confrontations within the currency union. Tough austerity measures lead to weaker economic performance. More efficient measures are needed, the world’s leading experts say.
EURUSD Prospects:
According to Eugene Olkhovsky, ’s leading expert in financial markets, the global economy is in danger because of the eurozone crisis. Most problems in the eurozone are still not solved as the instability keeps escalating, thus increasing the probability of another major crisis.
Technically, EURUSD keeps forming the bullish wave a(C )/C of Daily. According to the Department of Masterforex-V Trading System , the entire upswing from 1.2623 still can turn into wave 4 of Daily 3. The scenario will be canceled once the price breaks above 1.3245. The closest strong levels of resistance are 1.3230/1.3245 and 1.3333. In order to calculate the downward targets we need a reversal wave A with breaking the MF pivot 1.2937 and the MF sloping channel 1.2623/1.2927 (as shown below):
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What awaits the Euro currency?
