Former IMF economist and Wall Street strategist David Woo says…
The fully recovery of the euro exchange rate to pre-Ukraine war level is a testament of the dramatic reduction of Europe’s energy dependence on Russia over the past 18 months.
Massive fiscal subsidies and transfers have masked the long-term cost of this reduced dependence and allowed the European Central Bank to raise interest rates to a 22-year high. Yet, it would be a mistake to think that Europe’s energy crisis is over. The increase in the relative energy costs faced by Europe compared to the Americas and Asia is seriously undercutting the competitiveness of Europe’s industries. Companies are leaving Germany and heading for China and the US. Examples include BASF in China, Siemans in Singapore, and Volkswagen in Canada. The Deindustrialization Europe is happening and could one day undo the Euro. The decision by European politicians like Olaf Scholz to blindly follow the US regarding the Ukraine war is incomprehensible. Who blew up the Nord Stream pipelines? Watch:
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