The Tipping Point of the Euro: When Ignoring Pain Spells Peril

Imagine someone unable to feel pain - a superhero at first glance, but vulnerable in reality. For a decade, the Euro Zone has exhibited a similar paradox.

For a decade, the Euro Zone has moved to its own rhythm, bypassing urgent calls to rejuvenate its economy. Through the eyes of Schumpeter, this scenario mirrors 'creative destruction'. It's the philosophy that genuine innovation frequently emerges from the harsh collapse of the obsolete.

Imagine someone immune to pain. At a glance, they seem superhuman, bearing an extraordinary shield against harm. Yet, delve deeper, and this 'advantage' quickly becomes a perilous weakness. Unable to detect danger, they're prone to unforeseen damage.

In the same vein, the Euro Zone has overlooked its internal alarms: its precarious energy position, outdated migration strategies, and a hesitant approach to the artificial intelligence age. Instead, it's been charmed by visions of a sustainable future and the challenge of melding varied fiscal procedures under a unified currency.

Treading the uncertain path of negative interest rates, it teeters on the brink of economic inertia. However, as is the case with all captivating tales full of twists, reality always circles back. The surge in German bond rates to 2.75% may just be the wake-up call the Euro Zone didn't know it needed.

Kind regards,

Guillermo Valencia A

Brazil, 12th October 2023