Categorized | General Stuff

The Euro Is a NIGHTMARE for International Businesses at the Current Exchange Rate

Posted on 18 March 2014 by Andrei

I’m sure other European domainers can confirm that for example selling domains for dollars and buying goods in euros is a nightmare at the current exchange rate of almost 1.4. Now if you earn money in EUR, you probably like the current situation but let’s face it, most European domainers work with dollars because… well, because everyone else uses dollars as well.

As an economist, I can’t help but shake my head at Europe’s ridiculous policy when it comes to the EUR. On the one hand, you have a huge Europe-wide problem with deflation (the opposite of inflation). On the other hand, you have a huge problem with competitiveness, especially in the periphery.

In other words, businesses (but domainers as well) desperately need a weaker currency to stand a chance at being competitive and inflation is hardly a threat (in fact, the real threat in Europe’s case is deflation, the exact opposite of inflation), yet the ECB (Europe’s central bank) seemingly isn’t allowed to do the right thing.

I said “isn’t allowed” because there are a lot of very good economists at the ECB (including Draghi) who know what needs to be done, yet there is so much political pressure that the ECB is pretty much paralyzed and EU countries suffer. Therefore, despite the fact that the ECB should be independent, there is just so much political pressure that it’s fairly safe to conclude that the people behind it aren’t allowed to implement the strategies they consider appropriate.

The EU is supposed to be about integration, about unity and all in all, it’s a noble project in my opinion. But the Euro in its current form and with the current central banking policies is literally suffocating countries, especially those from the periphery and this is jeopardizing the entire European project.

It’s not yet too late to do something about it but if the ECB doesn’t take measures to weaken the EUR soon, the consequences could be disastrous in my opinion and it would be a shame because again, I consider the European Union project noble but a good idea cannot turn into something great unless it is executed properly!

1 Comments For This Post

  1. Francois Says:

    I confirm!

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