In Europe, EU officials were out warning on Tuesday that the financial crisis is continuing and that investors were now putting their attention on Portugal and Ireland following Greece’s bailout, according to a CNBC interview with former ECB official Bini Smaghi.
From the interview:
“In the past, so many times, we thought that the worst of the crisis was over, and then new waves of instability came in. So it’s no time for complacency—we have to prepare for the worst,” said Smaghi, who worked for the ECB during much of the ongoing euro zone crisis.
Still, the Italian economist, who stepped down from the ECB board last year, said that the single currency could end up as the world’s second reserve currency after the dollar, despite a turbulent year during which many have cast doubt on its future.
“It’s not in the interest of emerging markets to go back to the unipolar system with only the dollar as the safe haven. It’s not good for the world in general to have only a few safe assets. If you think about all the difficulties, all the problems we had during the last two years, the euro exchange rate is still there, and it’s in a range where I would say, it’s relatively strong,” he told CNBC. “There are many people who still believe in the euro and I think this is a currency that is safe.” Read More