The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2020 Euromoney, a part of the Euromoney Institutional Investor PLC.

Economic stability: The old world desperately needs a deal at the G20

Amid the threat of competitive devaluations, the US and the eurozone need help from the new emerging market powers.

As the European single currency swung between $1.30 and $1.20 last month, Euromoney toured banks whose currency strategists were publishing estimates of it going to $1.15 or lower. In private conversation, it’s soon obvious that many indeed expect the European currency to head for parity with the dollar or even fall through it, especially if the present single-currency bloc holds together, and any system of fiscal transfers between states – which Angela Merkel has so far denounced as an "irresponsible" model – does emerge.

With the US, the UK and the eurozone governments all in the same boat, struggling with high debts, fragile recovery and low growth, the threat of competitive devaluations hangs heavy in the air.

For now all the concerns over sovereign debt sustainability are focused on Europe. The US appears to have done its job.

Take out a complimentary trial

Take out a 7 day trial to gain unlimited access to and analysis and receive expertly-curated updates direct to your inbox.


Already a user?

Login now


We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree