The AUKUS deal found France diplomatically unprepared, but responded immediately and it now appears to be trying to bypass any bureaucratic and other difficulties that stem the EU’s integrity and to make it an autonomous economic and military power that will not depend on the US anymore.
Given that once again the economic background of the Eurozone is under pressure, especially as a significant increase in inflation is expected, it seems that there will be even more actions towards the establishment of an effective function of the EU, in order for the EU to be fortified and not “get on the sidelines”.
Although France is currently moving in the field of diplomacy and defense, Italy under Mario Draghi seems to be starting its own effort to awaken the EU, but in the economic field.
Mario Draghi stressed that he considers EU fiscal rules for a 2% deficit obsolete and prepared the Commission for even bigger deficits with 3% being the most likely scenario. Μario Draghi, who served on the ECB during the tough years of the European crisis, knows more than anyone how a country's GDP can grow and defy economic cycles.
Mario Draghi's point is that deficit reduction can not be done through disciplinary measures that destroy the economy, but through strong growth that shrinks the deficit. We hope that Mario Draghi will be able to change this destructive mentality in the EU.
All this at a time when the euro is falling with the latest news being negative for the currency, as it seems that a different policy could lead the euro to gain a larger share of investors as funding currency, which means that it should be consistently undervalued. The latest developments bring to light scenarios reported three months ago, which claimed that the exchange rate could fall below 1.1000 and maybe even lower.