The weekly "Il Rosso e il Nero" of the Italian asset management company Kairos proposes, this week, an analysis dedicated to political paralysis, in particular the German one of the last few days, and to the future developments of the European economy strongly conditioned by the will of Germany.
We read in Alessandro Fugnoli's article “in Europe we do what Germany wants and the Germans have the tendency, when things are going well, to expand a bit and to be pleased with the strength of their currency. Now in Germany the economy did very well in July and August and is now slowing down a bit. However, this is an expected slowdown, which should continue until the end of October and then give way to a gradual re-acceleration. Therefore, nothing prevents a further strengthening of the euro, at least from the German point of view”.
We are witnessing a cyclical improvement essentially due to the easing of fiscal policy and also to the increase in exports, but “it is difficult to think that Germany, in the next few years, will agree to further fiscal easing. It is also difficult to believe in a lasting recovery in domestic consumption. Remaining at this point only exports, a euro that is too strong will certainly not help. Furthermore, the European economy will only accelerate if the American one does the same. The distance between the United States and Europe, in terms of growth, will therefore remain unchanged. For this reason, in the medium term, we continue – says Fugnoli – to prefer the dollar”.
Read the Kairos site
