The Euro has devalued by more than 10% during recent months. Theoretically this should help Eurozone Exporters because their goods are becoming cheaper to buy !
In addition to this Mario Draghi of the European Central Bank has announced a Trillion EURO Investment Plan over the next 18 months ! He intends to purchase short term asset backed loans from Eurozone banks !
This would enable banks to lend fresh money to Industry for investment. That could reduce unemployment and increase the current Volume of Production.
Draghi hopes that in this way not only companies in the EUROZONE will benefit but others in the EU as well. Will they escape from the current depression ?
One must point out that the current interest rates for Loans have never been so low in living memory !
The uncertainty is whether Banks will make the loans and whether Industry is ready to make the investments to stimulate business !
Flooding World Financial Markets with an increased volume of EUROS and then permitting the parity of the EURO to decline, so that EUROZONE products are cheaper to buy, could become a dangerous gamble !
Once the parity of a currency declines, higher import costs and wage increases follow and it then becomes very difficult to reverse the trend !
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