Financial TimesFinancial Times

The euro’s drama is not an existential crisis

By Alan Beattie

27 Jul 2022 · 3 min read

Editor's Note

By now, we are all aware that the war in Ukraine and the recovery from the pandemic has had an impact on the euro. This article discusses just how serious that impact is.

The currency has become more resilient with every trauma it has survivedAlmost everyone in the financial markets remembers 10 years ago yesterday when Mario Draghi, then European Central Bank president, said he would do “whatever it takes” to save the euro. Some will also recall the first time the euro dipped below parity with the dollar in December 1999, less than a year after the currency had been launched on a crest of frothy boosterism claiming it would soon challenge the dollar for global supremacy.

On both occasions there was great hullabaloo, in retrospect much more justified for one episode than the other. The “whatever it takes” speech was genuinely important in stopping the eurozone debt crisis spiralling out of control. It led to the Outright Monetary Transactions bond-buying programme, which kept sovereign debt spreads down despite never actually being used.

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