A strong euro penalizes French exports far more than German ones

Evidence

A Deutsche Bank study dating back to 2014 set the threshold beyond which things start to get complicated for the French economy at 1.24 for a euro. For Italy, this 'pain threshold' went down to 1.17 for a euro. While the German economy, apparently, could bear an exchange rate of up to $1.79 for a euro. In 2017, the IMF estimated that the euro was undervalued by 11–16 per cent in the case of Germany and overvalued by 8–14 per cent in the case of France. All this is summarised in the Louis Gallois report: ‘Simply put, the strong euro strengthens the strong [countries] and weakens the weak [countries].’ — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 301

Categorization

• XREF: Connects to the book’s earlier argument that a strong currency acts as a tax on exports and subsidy on imports — here quantified with specific thresholds. — connects to: Euro pegging diverts trade toward France and blocks local industrialization.; The same strong euro that hurts France devastates African export competitiveness; Euro appreciation against the dollar penalizes franc zone cotton exporters twice — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 642 (+3 more)

Related

• The same strong euro that hurts France devastates African export competitiveness (similarity 0.91)
• Euro appreciation deteriorates franc zone trade balances (similarity 0.87)
• France’s strong-franc policy worsened CFA countries’ competitiveness (similarity 0.86)
• Euro pegging diverts trade toward France and blocks local industrialization. (similarity 0.85)
• Euro appreciation against the dollar penalizes franc zone cotton exporters twice (similarity 0.85)
• An overvalued CFA franc penalised African exports while favouring imports from France (similarity 0.84)
• France’s strong-franc policy transmitted its appreciation shock to the CFA zone (similarity 0.84)
• The 1939 franc zone was designed as a defensive shield for France’s economy (similarity 0.82)
• A strong CFA franc forced colonial trade to flow through metropole markets. (similarity 0.82)
• African economists warned that fixed euro pegging would exclude African economies from global competition (similarity 0.82)
• France’s own anti-inflation policies against the mark caused the CFA overvaluation that forced crisis. (similarity 0.81)
• An overvalued CFA franc was engineered to reorient colonial trade toward France (similarity 0.81)
• The CFA franc’s fixed peg forced colonies to absorb French devaluations helplessly (similarity 0.81)
• The euro’s uncertain fate makes French monetary tutelage an added risk. (similarity 0.81)
• Eurozone membership merged CFA extraction with neoliberal austerity, worsening African prospects. (similarity 0.81)

Broader Connections

• Euro appreciation against the dollar penalizes franc zone cotton exporters twice #expands (0.75) — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 642
• Euro appreciation deteriorates franc zone trade balances #expands (0.70) — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 299
• France’s strong-franc policy worsened CFA countries’ competitiveness #expands (0.65)
• The euro’s uncertain fate makes French monetary tutelage an added risk. #expands (0.60) — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 363