Once again, Greece is weighing on the euro. German advisers are talking about creating an insolvency process that would allow for a country’s exit from the 19-nation currency region if that country is threatening the eurozone. The news is contributing to the euro’s struggles today.
A panel of independent advisers in Germany recommend creating a mechanism by which insolvency allows a eurozone currency to exit the monetary union. While the panel stopped short of saying that Greece should be the first country to be subject to this process, members did warn that Athens needs to implement agreed upon reforms.
The idea that an exit from the eurozone shouldn’t be met with fierce resistance in all cases is weighing on the euro, and is part of the reason that the 19-nation currency is struggling against its major counterparts today. The advisers point out, much as a recent IMF report did, that sovereignty needs to be given up by member states whose economic situation puts the eurozone at risk. A tighter monetary union might be in the works. At the very least, tighter rules governing struggling countries could be coming.
At 15:51 GMT EUR/USD is down to 1.1036 from the open at 1.1088. EUR/GBP is down to 0.7076 from the open at 0.7126. EUR/JPY is down to 136.4790 from the open at 136.6770.
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