Sarkozy addresses the nation to try and get all European countries moving forward together.
There have been more and more rumours that the end of the Euro is near. Last night the French president Sarkozy gave a speech stating that the Euro could not continue unless all 17 nations pull together by preparing their budgets in common, narrow competitiveness gaps and face tougher automatic penalties for rule breaking.
The French want the European Central bank to become the lender of last resort as this will help their credit rating but Germany do not seem keen on this idea as they know deep down that even a central bank cant keep throwing money at a country that is bankrupt. With borrowing costs rocketing for countries like Italy and Greece I think it is inevitable that we will see a break up of the Eurozone as throwing more funds at the problem is not resolving the issues. It may come to a stage where a break up will be seen as positive for the global economy and the sooner this happens the world can move on from this debacle.
He said that he would meet with German Chancellor Angela Merkel on Monday to discuss steps to ensure the euro is saved. It will be interesting to see how the markets react to his comments and if Germany and France can finally come up with a resolution. With the pound over a cent away from the recent highs we could see sterling move back down to the lows that we saw at the beginning of November. Please email me at bma@currencies.co.uk so we can discuss any future requirements you may have and what implications may be around the corner.
