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Tensions Starting To Build In E U

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FRANKFURT (AFX) - European Central Bank chief economist Otmar Issing
is warning against "tensions" in the European monetary union
, according to the pre-release of an interview to be published in tomorrow's Handelsblatt.
"Some of the member states have lost their competitive edge due to the continued rise in unit labour costs, and have thereby landed in a difficult situation," Issing said.
"These countries must do something to change their course, or it could result in great tensions," he said.
It is the first time the ECB admits the growing differences in competitiveness in the monetary union, Handelsblatt said.
Issing did however say that the monetary union, "is and remains a success".

With Ireland facing rampant inflation and hideous HPI requiring IR dampening other EU members require the opposite to stimulate sluggish economies. Could the Euro prove to be a nice experiment but unworkable in practice? As Mark Twain might say: "The rumours of the death of the dollar are profoundly exaggerated."

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Funny enough I kinda expected a statement like this might come out of the ECB.

I was thinking about their dilemma - they want to raise interest rates in June, possibly by as much as 0.5%, but don't want speculation in the euro to cause it to soar against other currencies.

Possible solution: raise interest rates but release sentiment like this that might temper a rush and overvaluation of the euro.

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I can't work out why the FX markets are so in 'love' with the Euro.

IMO the Euro is a fairly good bet to 'implode' as ,RB states ,tensions rise between member Countries.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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