At his annual speech to the European Parliament, European Commission President Jose Manuel Barroso urged the European Union to speed up the formation of the bloc’s planned banking union and warned that Europe’s economic recovery remains fragile.
Barroso also warned that the biggest threat to the recovery was political upheaval and complacency by some governments. With the political situation in Italy looking increasingly unstable and the upcoming German elections Barroso is right to be concerned. The Eurozone may have exited its longest recession since the Second World War but the threat of the Euro crisis flaring up again remains very real.
“Make no mistake there is no way back to business as usual. Some people believe that after this, everything will go back to the way it was before. They are wrong. We will not go back to the ‘old’ normal; we have to shape a ‘new’ normal. The recovery is within sight. This should push us to keep up our efforts… we owe it to our 26 million unemployed. With a fragile recovery the biggest downside risk is political” Barroso told parliament.
He added that the regions 28 member states must complete banking reforms to protect consumers when or if banks fail. The European Parliament is expected to vote on legislation establishing the first of three pillars of the banking union, a centralized oversight for the largest banks. However, agreement on a common backstop mechanism remains elusive. The vote takes place on Thursday.
The Euro meanwhile has tumbled to its lowest level since January against the Pound after data showed that the unemployment rate in the UK fell to 7.7%, beating economist forecasts for it to stay steady at 7.8%.
Euro (EUR) Exchange Rates
As of 11:20 am
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3261
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8414
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4254
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6435
The Euro/ Canadian Dollar Exchange Rate is currently in the region of: 1.3729