French and German finance ministers stated that the result of Italy’s constitutional referendum does not pose a threat to the single European currency, Reuters reported.
France’s Finance Minister Michel Sapin does not foresee systematic risks to the eurozone in light of the “no” vote on constitutional reforms in Italy. Mr. Sapin said that Italy is a stable economy and the resignation of Prime Minister Matteo Renzi is a purely domestic affair. In response to the question about a weaker euro, he noted that the overvalued euro is not beneficial to European exporters. He added that the ongoing decline in the euro’s value mirrors the dollar’s rally.
Echoing his counterpart, Germany’s Finance Minister Wolfgang Schaeuble also stated that the referendum is Italy’s domestic issue. He said he saw no grounds for a crisis of the shared currency and called on investors to relax. "Italy has to continue in a consistent manner on the path that Prime Minister Renzi has taken economically and politically over the past three years," Schaeuble noted.
Analysts at Citigroup expect the euro to fall 7.5% to 0.98 against the US dollar in the nearest 6-12 months, Rambler News Service reported referring to the bank’s survey. Citigroup experts predict the euro will trade at 1.05 against the greenback in the long term.
Meanwhile, the euro is still easing in the wake of Italy’s referendum which ended with the “no” vote on constitutional amendments proposed by Matteo Renzi. After his defeat, he declared he would step down as Prime Minister.
