The European media quoted the President of the European Central Bank Jean-Claude Trichet, in response to those asking whether the euro will survive, by saying: stop listening to the Americans, adding: before the euro was adopted, they used to accuse us of failing to adopt a unified currency, that this is technically impossible, and that the euro will not be worth more than toilet paper...and now, they expect the European currency to implode. In truth, Trichet's retort reflects the covert war waged by the United States against both strong and weak currencies, in order to consolidate its domination over the world economy, in parallel with its strong military position. In reality, the creation of a single European currency more than a decade ago shook up the dollar, not only in terms of attracting a portion of the world reserves equivalent to nearly a third of their total value, but also because the euro offered a sanctuary for the reserves of countries opposed to American policies, in particular the oil producing countries among those. The euro achieved economic strength for the euro zone, save for when the conditions of member states deteriorated as a result of the repercussions of the American financial crisis on both sides of the Atlantic or when economic information was rigged with the help of U.S financial institutions on the behalf of countries desiring to accede to the euro zone. On the outside, the euro saved modern Europe. Prior to its adoption, crises used to fiercely devaluate the currencies of crisis-ridden countries by up to 25 percent, as in the case of the Spanish peseta, and 40 percent in the case of the Finnish Mark. The unified currency also precluded collapses as a result. Moreover, the euro zone's institutions helped [the member states] benefit from the unified single market for the European currency and from bulk savings, when 15 years ago, this market was a dwarf in comparison to the U.S market. In addition, the euro contributed to the stabilization of oil prices at the European level, as these prices are denominated in the dollar. Furthermore, low interest rates on the euro cannot be overlooked, as this is a key factor in growth without which countries with minimal competitiveness could not have achieved any growth. According to pundits, the euro has prevented the collapse of many financial institutions during the last crisis, something that the dollar could not provide to the American financial institutions. However, these interests which are beneficial to a group of 16 countries, faced criticisms in the United States by laureates of the Nobel Prize in economics, and also by European economists, in particular in France, who questioned the viability of the unified currency and its ability to survive. As a result, investors were prompted to refrain from the European currency, as they became doubtful of the possibility that the Greek rescue program will succeed, and subsequently, in the ability of the euro zone to assist the economically battered countries. In truth, the European Union and the euro zone were on the defensive on two fronts: the first front involves supporting the unified currency by offering assistance to those member states that are in need for help, but under terms that give the union and subsequently the euro zone oversight rights with strict conditions, while the second involves speculators in capital markets. On the first front, the EU and the euro zone approved a one trillion dollars bailout plan, while Germany alone decided to confront the second front consisting of capital markets where consulting firms and investors cooperate to engage in the “naked” (short) purchasing of financial instruments. The fact of the matter is that such cooperation leads to artificial changes in the value of financial instruments that serve the goals of the competing investors and increase their profits. As a result, the Greek sovereign bonds were stretched thin, with returns on the latter exceeding 10 percent. In the rear lines facing the euro lie the financial markets that benefited from the crisis in Greece, the most economically vulnerable member of the euro zone. These markets were excluded after the euro zone and the IMF intervened to assist Athens with a rescue package that exceeded 120 billion Euros, at a moderate interest rate which is lower than that offered by investors/competitors. But then almost automatically, those damaged by this rallied to circumvent the bailout. They abandoned their positions in the European currency, causing a decline in the value of the euro and in international confidence in this currency. In truth, speculators as such achieve two goals through circumventing the bailout: one, rendering the Greek rescue package insufficient to repay its debts owed in the dollar, since the rescue package was denominated in the euro when it was worth 1.4 dollars, and then it dropped to around 1.2 dollars. The second goal, meanwhile, is to undermine confidence in the entire euro zone. What is remarkable is that the value of the European currency deteriorated after the Greek bailout package was approved, when it would have been more logical for it to deteriorate during the period when Germany had not yet decided upon its stance vis-a-vis bailing out Greece, which lasted for almost a month. It is noted that the exodus from the euro-denominated positions did not cause this currency to lose what it had gained from the deterioration of the dollar, nor did it devaluate it below the levels desired by the Europeans themselves, in particular the economic and financial institutions. Even when the majority of European exports go mostly into the markets of the European Union, especially the euro zone, boosting the remaining segment with further competitiveness in terms of lower prices is more meaningful, and is something strongly sought by the major heavy industries in Europe. It can also be argued that consumers will benefit from lower product prices in retail markets, since the rise in the euro value often led to higher prices, especially when many raw and semi-manufactured materials enter the European products' manufacturing cycle. Also, there are no concerns regarding fuel prices, which declined with the drop in the euro's value, since their increase is connected to the rather fixed U.S consumption. The euro continues to be safely fortified then, and may quickly rise whenever the European Central Bank decides to raise standard interest rates. However, at 1.2 dollars, the present value of the euro is better for the economies of Europe.
