"Krone" guest commentary

Must escape the euro trap

Christian Baha is a stock market expert and founded Austria's first stock exchange terminal in 1993, which delivers data in real time. In 1996, he established the world's first hedge fund for private investors. Baha has always pursued the vision of making funds for wealthy individuals accessible to smaller investors.(Bild: Krone KREATIV/stock.adobe.com)

The US share index S&P 500 reacted to Donald Trump's inauguration with an all-time high in the expectation of a booming US economy and debt reduction. Europe, on the other hand, cannot find a way out of the recession. This imbalance is sending the weak euro, which peaked at 1.6 dollars in 2008, on a downward spiral.

The EU's completely misguided debt redistribution policy is costing us purchasing power and prosperity. The euro is approaching the rate of 1 US dollar and could soon fall below the dollar mark. Fatally, this weakness of the euro is triggering a new surge in inflation, as all commodities are traded internationally in dollars.

This means that we will have to dig deeper into our pockets for steel, aluminum, copper, cotton, coffee, cocoa, sugar, gold, silver and palladium. As crude oil, gas, petrol and heating oil are also becoming more expensive due to the strong US dollar and we have neglected to secure cheap gas from Russia, energy prices continue to soar. Our production costs are going up and our competitiveness is going down. It is precisely during this period of weakness that US giants such as Google and Facebook are going head-to-head with the EU with Trump's backing.

The spiral of loss of prosperity can only be broken if we escape the euro trap. De facto, it must not be taboo to think about a return to the schilling. We cannot reform the entire EU. Not alone.