The Eurozone Currency Crisis: 4 Key Considerations for Business Owners

The Eurozone Currency Crisis: 4 Key Considerations for Business Owners

In our discussions with midmarket companies, we’ve noticed that most executives shrug their shoulders when the topic of the eurozone comes up. In fact, one CEO recently scolded us for our question: “Why should I care? I have no sales in Europe and it won’t impact me or my business.” Yet we believe, despite the EU recently delaying the issue around the fate of Greek debt, the outcome of the euro will have profound and long-lasting consequences for world markets, the global economy and U.S. business interests. Foreign policy considerations aside, the collapse of the euro or the partial unraveling of the eurozone will mark a turning point for American businesses of all shapes and sizes. It will usher in a period of economic turbulence, the likes of which U.S. businesses have not seen since the 1970s, when the Bretton Woods exchange-rate system crumbled. The ‘quantitative easing’ quandary For sure, the eurozone has been lurching from one debt crisis to another since 2008. The credibility of the European Central Bank (ECB) and its current quantitative easing program is suspect in terms of both its timeliness and its ability to resolve the underlying issues that are causing massive imbalances in Europe. In January 2015, the ECB said it would purchase sovereign debt starting in March 2015 until the end of September 2016, by which time more than 1 trillion euros would have been created under a formal quantitative easing program. Skeptics around the purchasing program abound. To promote economic stability, the EU pushed member countries to adopt various austerity programs post 2008. Typically, these austerity programs focused on cutting governmental...
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