> Why would the euro be in real trouble.
How about zero net economic growth for 20-25 years and no prospect of that trend changing?
Countries in the Eurzone who have seen negative real economic growth since 2007 or 2008:
Belgium, the Netherlands, Austria, Finland, France, Germany, Greece, Italy, Portugal, Slovakia, Slovenia, Spain
The only growth economies over the past decade are smaller: Estonia, Lithuania, Latvia, Ireland
In 2008 Germany's GDP per capita hit $45,400. In 2019 it was $46,500. That's a massive real negative contraction given the debasement of the Euro and even a tiny bit of real inflation per year. That's the most potent economy in all of Europe and certainly in the Eurozone. The outcomes for France, Italy and Spain are that much worse over that span of time. Now Germany is facing a big hit to their advanced industrial foundations, as China and electric cars eat into the things they do particularly well. Germany will suffer de-industrialization (which they've held off longer than anyone else) and they have no replacement plan for that situation. Will Germany somehow come up with a massive, global tech economy to rival the US and China? There's no evidence of trend in the past decade. How does the Eurozone fare well without Germany moving it forward? It doesn't.
In the time the Eurozone has stagnated the US went from a GDP per capita of $48,300 to $65,000 and the US economy will again recover from the pandemic faster than Europe's economy, broadly, will; for the exact same reason it did with the great recession. That will add further weakness to the Euro by contrast.
Here's what that stagnation looks like: https://i.imgur.com/ep9kSOw.jpg
Besides that giant problem, Germany is going to again face enormous pressure around the way they inflate the value of the Euro at the expense of Italy, Spain, Portugal, Greece (making them not-as-competitive on exports). As with the non-recovery after the great recession, that problem will again be amplified and felt as these economies attempt to recover from the pandemic recession. They all know it's unfair that Germany gets to free-ride on a cheap currency (cheap for Germany, expensive for Italy & Co), producing the world's largest trade imbalance.
So the Eurozone is already on year 12-13 of negative growth. They were just beginning to inch above the great recession line of 2007-2008 in nominal terms. Now they've been reset by a minimum of five years, given how slow the major Eurozone economies have been growing. More likely, it's going to be a lost 20-25 years in total, stretching from 2007 to 2027 or 2032 approximately. And then at some point the next recession will hit, and on it goes.
The Euro is not going to do well accordingly.
How about zero net economic growth for 20-25 years and no prospect of that trend changing?
Countries in the Eurzone who have seen negative real economic growth since 2007 or 2008:
Belgium, the Netherlands, Austria, Finland, France, Germany, Greece, Italy, Portugal, Slovakia, Slovenia, Spain
The only growth economies over the past decade are smaller: Estonia, Lithuania, Latvia, Ireland
In 2008 Germany's GDP per capita hit $45,400. In 2019 it was $46,500. That's a massive real negative contraction given the debasement of the Euro and even a tiny bit of real inflation per year. That's the most potent economy in all of Europe and certainly in the Eurozone. The outcomes for France, Italy and Spain are that much worse over that span of time. Now Germany is facing a big hit to their advanced industrial foundations, as China and electric cars eat into the things they do particularly well. Germany will suffer de-industrialization (which they've held off longer than anyone else) and they have no replacement plan for that situation. Will Germany somehow come up with a massive, global tech economy to rival the US and China? There's no evidence of trend in the past decade. How does the Eurozone fare well without Germany moving it forward? It doesn't.
In the time the Eurozone has stagnated the US went from a GDP per capita of $48,300 to $65,000 and the US economy will again recover from the pandemic faster than Europe's economy, broadly, will; for the exact same reason it did with the great recession. That will add further weakness to the Euro by contrast.
Here's what that stagnation looks like: https://i.imgur.com/ep9kSOw.jpg
Besides that giant problem, Germany is going to again face enormous pressure around the way they inflate the value of the Euro at the expense of Italy, Spain, Portugal, Greece (making them not-as-competitive on exports). As with the non-recovery after the great recession, that problem will again be amplified and felt as these economies attempt to recover from the pandemic recession. They all know it's unfair that Germany gets to free-ride on a cheap currency (cheap for Germany, expensive for Italy & Co), producing the world's largest trade imbalance.
So the Eurozone is already on year 12-13 of negative growth. They were just beginning to inch above the great recession line of 2007-2008 in nominal terms. Now they've been reset by a minimum of five years, given how slow the major Eurozone economies have been growing. More likely, it's going to be a lost 20-25 years in total, stretching from 2007 to 2027 or 2032 approximately. And then at some point the next recession will hit, and on it goes.
The Euro is not going to do well accordingly.