Weak Euro To Benefit Larger Economies of EU

Meanwhile, data on Tuesday showed consumer prices in the euro area rose 0.6 percent on the month and fell 0.3 percent on the year in February—a decline less sharp than the 0.6 percent year-on-year fall seen in January.

Still, economists say there are some important caveats to consider when assessing the soft euro’s impact.

For one, the benefits of the weak currency are unlikely to be felt throughout the 19-member euro zone, including uncompetitive, smaller countries such as Greece that need economic growth to help tackle their debt mountains.

“One thing I would say about this move in the euro is that it really favors those in Europe that really need it the least – Germany and France,” Stephen Roach, a senior fellow at Yale University and a prominent economist, told CNBC last week. “They’ve accounted for over 45 percent of all exports over the past five years. The so called PIGS – Portugal, Ireland, Greece and Spain – they are less than half of that.”

via CNBC

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