The Euro's recent troubles are very similar to a Formula One race…it all looks under control until trouble strikes. writes CNN anchor and correspondent Richard Quest in an exclusive column to domain-b.
I spent the past weekend in Monaco watching the Grand Prix. The tiny principality, encircled by France, obviously uses the Euro as its currency.
Not that many people here actually get much time to caress the money as it flies out of wallets during the F1 weekend. These little pieces of paper go up in smoke as fast as the racing cars burn gasoline. It set me thinking that the Euro's recent troubles are very similar to a Formula One race…it all looks under control until trouble strikes.
The Euro is starting to look like a car with 16 drivers, all running on different fuels and following individual maps with no one really sure who is at the wheel. You think I am being unfair?
It has only been a week since the European Union and IMF put together their trillion-dollar plan for Eurozone countries and the markets have now given their verdict. The bailout will prevent attacks on European government bonds, but it will not rescue the single currency (nor has it brought the stability that was intended).
The Euro rallied to about $1.30 after the deal was announced. It has since slipped back below the waves with the prospect of further falls ahead.
All of this was entirely predictable. As soon as the European Central Bank said it would buy bonds from countries like Greece it put a floor under the Euro debt market. One commentator acidly noted all that has happened is a transfer of debt from countries in southern Europe to the Eurozone as a whole. At the same time the ECB has seen its credibility sink with the currency, as the bank takes firm policy stances, only to jettison them when the situation deteriorates.