Why is the euro growing? Let's try to understand

Residents of Russia closely follow changes in the bi-currency basket (even those who do not have currency savings), because they understand how much their life is related to these two indicators. But the economy, unfortunately, is not algebra and geometry: there is no clear and unambiguous answer. The oddity is that the ruble is falling only against the euro. To the dollar, since July, our national currency has grown by 1.5-2%.

Who loosens the deck?

When asked why the euro is growing and the dollar is falling against the ruble, it's easy to answer. Even the most lazy could not help but notice from the news reports that the great power in the face of the United States has put so much effort into it, what is surprising is not that the rate is falling, but how slowly this happens. But why the euro is growing (2013), perhaps, the American situation will not give an answer.

In connection with Russia's accession to the WTO, the high ruble rate for the Russians themselves will be a tragedy. But an expensive euro will not be profitable for the consumer basket of Russians. As practice shows, our population likes to buy imported goods at a low price. And this at first glance seems profitable. After all, many imported goods are much cheaper than local ones due to low export duties. Therefore, importers will benefit from the high exchange rate of the national currency, flooding the country with cheap foreign goods. And what the domestic producer produces will remain in warehouses.

Where it leads?

Enterprises will begin to close - our partners. Or our own factories, having lost the competitive struggle with cheaper and high-quality imported goods, will also close. There is a rhetorical question: "To whom to give credits, to whom to build houses?"

Economic protectionism, on a reasonable scale, has always been useful for a country that uses its own producer protection tool. Therefore, the state, to the best of its ability, supports the low ruble rate, so that the economy does not collapse.

Capricious currency

Simply put, the answer to the question: "Why is the euro growing?" Extremely simple. The EU countries artificially overestimate the rate of the currency, so that its own economy did not collapse during the crisis. The name of this phenomenon is devaluation. Most likely, our Central Bank is expensive to maintain the ruble, but everyone knew what would be Russia's entry into the WTO. Recently, oil prices have stabilized, there are no sharp leaps in the dynamics - this is an obvious plus. But such fluctuations also affect why the euro is growing.

If we go from the opposite point of view, a strong Euro-currency is not so beneficial to the Eurozone itself, for the same reason that we do not need a high ruble rate. And then it becomes not quite clear why our civilized neighbors do not take measures. The only currency that behaves predictably, this pound sterling - is growing slowly in relation to all currencies. Now it is understandable why the far-sighted British did not want to change their pounds to the euro.

Why is the euro growing slowly?

This is facilitated by the growth of the public debt of Germany, the main donor of the Eurozone. Plus, the main scooter of the Eurozone is France. The state simply raised taxes (everyone remembers how Gerard Depardieu became a Mordovian farmer?). A control shot was the increase in VAT in Italy (up to 22%). In hot Italy, not all people are as patient as Russians. Recall that in the economic history of Russia simultaneously applied VAT - 20% and sales tax - 5% (total 25%). The savvy of Russian bankers sometimes surpasses the Jewish one, since by 25% they decided to indirectly wind another 1%. In fact, we obtained more, because VAT was first added to the price (20%), and the sales tax was calculated on the resulting amount (5%), and instead of net 25% we paid 26%.

Neighbors also suffered

But the question of why the euro is growing is not only in Russia. The Ukrainian hryvnia also feels negative dynamics for itself. This was influenced by the statement of the head of the Federal Reserve System (Federal Reserve System ) Ben Bernanke that measures to stimulate the dollar exchange rate are transferred to November-December. A lever that lowered the dollar and simultaneously played on the increase of the euro was the increase in gold prices (3.5%).

It is worth remembering that economic laws are a set of factors affecting the world market, and one of them will never be decisive for global changes. It remains only to observe the further development of events in the economy and in the world.