(HS Insider)

Opinion

Column: The fall of the Euro

The Euro reached the same price as the American Dollar last month for the first time since 2002.
<a href="https://highschool.latimes.com/author/etavirps/" target="_self">clement liu</a>

clement liu

August 8, 2022
As of August 5, one Euro is worth 1.01 American dollars. Although this already seems like a very low price for a Euro compared to its price in the past as the price of the Euro was around 1.18 American dollars this time last year, surprisingly, this isn’t the Euro at its worst in recent times. Last month, the value of the Euro became equal to the American dollar for the first time since 2002.

What does this fall in price mean?

For people planning to travel to Europe, this could actually be a good thing. In this scenario, a person deciding to travel to one of the countries that run on the Euro would have to pay less for goods and services there since the conversion rate is so low.

If a person was in one of these countries last Wednesday when a Euro was equal to an American dollar and spent 20 Euros grocery shopping, that would have cost them exactly 20 American dollars rather than a little over $20 that they would’ve spent the day before.

However, this fall in the price of the Euro also has some consequences.

First, similar to the benefits stated earlier, although tourism in European countries may be increased, European tourism in the United States would suffer as Euro conversion to the dollar would decrease the purchasing power of each Euro. This same effect would occur in other countries as well. According to TheEconomicTimes, other countries with currencies tied with the U.S. dollar, such as Japan or Qatar, will also become more expensive for European travelers.

Also, this fluctuation in the price of the Euro can also have an effect on European area exporters and importers as a weaker Euro value can increase or decrease the competitiveness of certain exporters and importers depending on the currency being used.

What is the reason for this fall in price? One is the Russia-Ukraine conflict.

According to The Washington Post, the conflict between these countries led to the upending of food supplies while also increasing energy prices across the world, especially in the EU, where many countries relied on Russian fossil fuels. This means that the conflicts in Ukraine have caused energy prices to increase for Europeans, leading to the value of their money decreasing. 

In other words, the increase in inflation and slow economic growth have caused the rapid decline of the Euro. Although there are many other factors that could have influenced this decrease in value, the Russian-Ukraine conflict rapidly accelerated this decrease.

The future of the Euro’s performance is still uncertain with many questions still present surrounding the economy of many European countries. With the continuation of the Russia-Ukraine conflict among other stressors on the European economies, one thing for sure is that the future of the Euro is not only uncertain but also unstable. 

From Marshall student to Marshall coach and teacher

From Marshall student to Marshall coach and teacher

Joseph Manahan loves John Marshall High School. He graduated in 1995 and has never left. Well, he did for a few years when he went to college, but in 2002, he came back to teach English, geometry, algebra, and coach the Girls' JV & Varsity volleyball teams. He...