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Sunday 23.09.2018 | Name days: Vanda, Veneranda, Venija
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Expert: European Central bank fears inflation more than strong euro

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Baltic news, News from Latvia, BNN-NEWS.COM, BNN-NEWS.RU, Olga Ertuganova

Olga Ertuganova

European Central bank’s critical stance towards inflation risks and euro base rate climb in March added to strengthening euro, which is not a good signal for exporters in eurozone, because their goods and services gain in other currencies, according to Olga Ertuganova, Latvijas Krājbanka senior analyst.

Undoubtedly, weaker euro would motivate export and the overall development of the European economy, she points out.

However, for the time being, the European central bank is more concerned about inflation than strong euro exchange rate and its impact on a number of European economies, the expert adds.

Asked to comment upon Vesa Kanniainen, professor of economics at the University of Helsinki, statement that the euro should be devalued, she stresses the professor believes the euro devaluation and Germany, France and Spain’s banks recapitalization and nationalization would be the key move to tackle the fiscal crisis.

However, it should be pointed out, we are speaking of the euro dropping against its main currency competitors, because practically it is impossible to devalue it, as it is a floating currency.

Business news portal BNN already reported, according to Vesa Kanniainen, professor of economics at the University of Helsinki, the single European currency euro should be devalued, while such countries as Greece and Portugal should be excluded from the eurozone, considers Vesa Kanniainen, professor of economics at the University of Helsinki.

He believes countries facing heavy debt crisis should be given the opportunity to restructure their debts or declare their bankruptcy, reported the television channel YLE News.

Moreover, the expert is convinced the eurozone’s problems can be solved only by nationalizing banks in Germany, Spain and France.

 


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