Dollar-Euro Parity: Europe Pays for Its Mistakes

The main headline on the New York Times website on July 16 was puzzling: “The World Economy Is Imperiled,” it said, “by a Force Hiding in Plain Sight.”

So what is the danger?

In recent years, we have become accustomed to seeing the destruction of the world behind every event. From the rapid economic development of China and the unprecedented modernization of its armed forces, to, of course, the pandemic and the war in Ukraine.

However, the Times headline, as I noted, while alarming, is nevertheless not revealing.

One must read further to find out what is threatening the global economy.

The global economy, therefore, is at risk from the high price of the dollar, the author writes.

I do not intend to get into the technical side of the hugely important subject of currency correlations. And you don’t need to be an expert on this subject to know the importance of the value of the dollar compared to other currencies for each of our wallets.

But I will make a brief historical reference:

After the establishment of the euro, in 2000, and for two years the U.S. dollar had more value than the euro.

But after 2002, the euro gained the upper hand and was trading at 1.60 to the dollar.

This year, the euro has lost about 10% of its value against the dollar and in recent days has reached a practical parity of $1 to 1 euro.

This, in short, means that our vacations in Greece, as well as the Greek products we buy in the U.S., are cheaper than last year.

The opposite is true for Greek vacations in the U.S. and for the purchase of American products.

The Nobel laureate economist Paul Krugman gives a revealing explanation to the question of why the dollar reached parity with the euro in his July 15 article in the Times: “not interest rates, but a major downward revision in investors’ views of European competitiveness, and hence of the perceived long-run sustainable value of Europe’s currency.”

Many of us saw the weakening of Europe’s competitiveness and sounded the alarm. Unfortunately, it seems that one cannot have both a high quality of life and a competitive economy.

In addition, Krugman also writes the following:

“It’s a bit simplified, but not that far from the truth, to say that over the past couple of decades Europe — especially Germany, the core of the Continent’s economy — has tried to build prosperity on two pillars: cheap natural gas from Russia and, to a lesser extent, exports of manufactured goods to China.

“One of these pillars is completely gone, thanks to Vladimir Putin’s bungled invasion of Ukraine. The other pillar is crumbling, as the Chinese economy stumbles, partly because of erratic policies in the face of COVID-19, and also as Chinese human rights violations make dealing with its regime increasingly toxic.

“…leaders — especially in Germany — refused to acknowledge that the problem with autocratic regimes isn’t just that they do evil things, it is that they aren’t trustworthy. Europe is now paying the price for that willful blindness, and the weak euro is a symptom of that price.”

However, something similar is also true in matters of foreign policy with authoritarian regimes, as in the case of Turkey.

No one can rely on them, because they are not reliable.


I read the story in the Associated Press twice to make sure what it said was accurate: The shareholders of Tesla, the electric car maker, have approved the compensation package for CEO, Elon Musk, amounting to about 44.

Top Stories


A pregnant woman was driving in the HOV lane near Dallas.

General News

NEW YORK – Meropi Kyriacou, the new Principal of The Cathedral School in Manhattan, was honored as The National Herald’s Educator of the Year.


1 of 2 Abducted Louisiana Children is Found Dead in Mississippi after Their Mother is Killed

JACKSON, Miss. (AP) — A Louisiana woman was found dead in her home Thursday, and her two young daughters were abducted and found hours later in Mississippi — one dead and the other alive, police said.

ATHENS – Acknowledging disappointing results in the European Parliament elections for New Democracy, Prime Minister Kyriakos Mitsotakis said there won’t be early elections in Greece and dismissed any idea of taking New Democracy further right.

NEW YORK – This year, Leros New York is the standout team in the Premier Division of the Long Island Soccer Football League (LISFL) – and beyond.

ROME - There were multiple triumphs for Greece this week at at the European Athletics Championships in Rome.

LAUSANNE, Switzerland (AP) — The Spanish team for men's soccer at the Paris Olympics got permission Thursday from the IOC to select two players who previously played for other countries.

Enter your email address to subscribe

Provide your email address to subscribe. For e.g. [email protected]

You may unsubscribe at any time using the link in our newsletter.