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Date: Sat, 06 Mar 1999 18:15:38 -0600
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Note from Bill Koenig:

The euro continues it's tumble and some of the European economies
are slowing substantially.

Germany has lowered their growth projection for 1999 to 1.5% from
2.8%. Germany is one-third of the euro zone's total economy. Italy,
Europe's third largest economy,  is off too.

It looks like the "oasis" is the American economy for the moment.
How long will it last?

The excerpts below (link included) are from an article in the New
York Times this week. (Thanks to David Hamilton for sending it our
way.) To view the article it might require a short (free)
registration. There main page is http://www.nytimes.com if
registration is necessary.

I recommend the New York Times because they continue to provide
timely and helpful material.  I am also impressed by their concise
format and the eye for the relevant.

_________

The Euro Falls, and Some Find Economic Fault
http://www.nytimes.com/library/financial/030399euro.html


FRANKFURT, Germany�In the two months since the European single
currency was introduced, pretty much the only direction it has
moved is down.

>From a buoyant and technically smooth start-up on Jan. 4, the euro
has steadily slipped against the U.S. dollar. An initial exchange
rate of $1.17 is now around $1.09.

The decline has surprised most experts and puzzled the overseers of
the new currency at the European Central Bank. It could also strain
relations with the United States, where government officials now
loudly complain that Europe has to do more to stimulate world
growth. A weak euro makes that harder, because it increases the
price of imported goods and diminishes European demand for them.

The euro�s troubles reflect a series of economic and political
developments that have taken the shine off Europe and its new
currency. Economic growth has sharply slowed, particularly here in
Germany, while the United States has defied expectations with an
unrelenting pace of torrid growth.

European sluggishness has been notable in Germany, which accounts
for one-third of the euro zone's total economy. On Tuesday, the
German Chambers of Industry and Commerce said companies now expect
the economy to grow only 1.5 percent this year, down from 2.8
percent in 1998. The German central bank has already estimated that
the economy declined 0.4 percent in December. "There are clouds
spreading over the German economy, and the sunshine has
disappeared," said Franz Schoser, the chambers' managing director.

In Italy, Europe's third-largest economy, things are worse. The
Italian government said on Monday that economic growth last year
was only 1.4 percent, far short of its projections.

At the same time, economic expansion has made the United States a
magnet for foreign money, increased the demand for dollars, and
reduced that for euro investments.

"If you look at the two economies," said Stefan Schneider, chief
European economist for Banque Paribas, "they just seem to be going
in opposite directions."


Koenig's International News - Bill Koenig - http://watch.org/
Post Office Box 671164, Dallas, TX 75367
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