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Post: Expert says how anti-Russian sanctions could affect EU


Headquarters of the European Union in Brussels. archive photo

Expert Woof: Sanctions against Russia will force the EU to use the dollar Risk for the euro area

BRUSSELS, 14 July – RIA Novosti. Europe will have to use the dollar more frequently because of sanctions against Russia, which will further weaken the euro, which fell below the dollar for the first time in 20 years on Wednesday, causing tensions and could significantly destabilize the eurozone,” said French expert Charles Gav. , president of the think tank Freedom Institute.

“Europe’s anti-Russia sanctions hit Europe hard, not Russia… As for energy resources, before the Ukraine crisis, EU countries paid for energy in euros, or rather rubles, and then mainly reinvested in euros. The “brilliant” ideas of Brussels, we will now reject Russian supplies and pay Qatar, the US or Venezuela for energy in dollars if they can supply us with oil and gas, but that “if” is a big question, he told RIA Novosti.

According to the expert, all this gives the dollar an advantage: from now on, most transactions will be made in dollars, which will strengthen its dominant role in the world. “While it can borrow 65% of the world’s reserves, the euro’s share may even fall below 20%. That’s bad for the euro,” Gav said. 2008 crisis, after which its value fell.

“The decline in the value of the euro means the gradual abandonment of the euro as the reserve currency, rising inflation in the euro area, the impoverishment of the European population, the increased cost of importing energy, materials and products. What happens is not a rise in prices, but a depreciation of the currency… In 10 years Europe has quadrupled the monetary mass. We printed money at high speed, this is a huge vector of inflation, “the expert believes.

The expert emphasized that the average European inflation rate may reach 10% soon, with 22% in the Baltic countries, 8.8% in the EU and 8.6% in the eurozone, over 15.6% in Poland.

Gav believes that Europe is “losing rational thinking” and he is “entering a period of civilizational decline”, and his hopes of boosting European exports, increasing the competitiveness of national products and boosting tourism against the backdrop of a falling euro are not justified. According to him, too strong a fall in the currency could significantly destabilize the eurozone.

“Germany exports cars and its superiority lies in fuel-oil engines, which will have to go out in 5-10 years. Germany also exports chemicals, but their production will be under pressure due to rising oil and gas prices. Competitiveness will be hit hard. Germany’s trade balance will deteriorate and in the autumn the country will It could face a serious recession,” he said.

According to him, tensions will rise in Europe on the backdrop of the euro’s depreciation, and “some countries may withdraw into themselves at a time when actions need to be coordinated”: Italy or Spain may be under too much pressure to stay in the eurozone Woof, France’s debt and significantly worsening trade It concluded that the balance sheet could have a negative impact on the euro.

Source: Ria

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