Euro is the Victim of Greece Worries

• 04.20.2015, 22:05
•  Europe,  America,  World

The euro fall on Monday because of the fears that Athens and its debtors can not reach an agreement. The currency fell down to $1.080 from $1.081 in New York and in Tokyo from 128.38 yen to 128.49 yen, Presstv reports.

The president of European Central Bank’s Draghi and the Managing Director IMF’s Cristian Lagarde informed at IMF – World Bank spring meeting that Greece needs to provide comprehensive information about how its economic and reform plans will impact country’s finances. Greece is seeking to receive the last part of its bailout – 7.2 billion euros from European Union, but Draghi alerted that it can be done until the agreement towards the reform is not reached between the EU and Greece. Both of them - Lagarde and Draghi said, although the new Greek leftist government tries to adjust polices under the country’s bailout, they should demonstrate the effect on the budget and debt. ECB understood that it needs much work to do in order to shape a new budget and to see how the new reform plans impacts on the economy. Both sides are looking to do a deal before the April 24 meeting of Eurozone Finance Ministers and Greece government. There is a concern that Greece and 19 Eurozone Finance Ministers will reach an agreement.

The situation is mixed up with political and economic issues, which has its strong impact on the euro currency. Last week US also suggested Greece to be very detailed in terms of economic reforms while it is presenting to its debtors. Greece by this approach can make clear that reforms based on fiscal policy damage the whole economy. Also it should clarify how the new budget is shaped. In terms of falling euro the advice of Draghi to traders is to sell the currency. The bond buying program already helped the euro to slip down causing dollar’s appreciation. Revaluation of the dollar is a treat for US economy and for any economy whose export is based on dollar. Overall, Europe gains when the euro falls, the only negative impact of instability between Greece and Eurozone is insecurity in Greek stock market.