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Europe needs money for importing energy. This is a life-or-death sort of thing, given how cold it gets in some European countries. Europe also imports large a
by bitmasher9 2y ago
Europe needs money for importing energy. This is a life-or-death sort of thing, given how cold it gets in some European countries. Europe also imports large amounts of electronics and machinery.
- triceratops 2y ago> Europe needs money for importing energy And they can't pay with their own currencies? If they import from other countries, that is? > Europe also imports large amounts of electronics and machinery From the US? Would their other vendors terribly mind taking Euros instead?
- TaurenHunter 2y agoThe global energy market uses the U.S. dollar for pricing and settling transactions since the 70s - the "petrodollar" system. If they EU push hard for it, they may get someone like Norway to accept Euros. However, there are energy contracts locked into dollar-based pricing and many exporters need dollars because they hold dollar-based debt, buy goods in dollars or have a currency peg. For them to accept the relatively unappealing Euros they might ask for a premium to offset conversion costs or risks.
- triceratops 2y agoBut now everyone has the same problem getting dollars because everyone's got tariffs. The EU and their non-American suppliers. If said suppliers need dollars to pay back dollar-based debts, and those debtors aren't in the US, then they are also tariffed. Maybe they're all open to re-denominating debts and contracts in a currency that is easier to obtain and spend.
- TaurenHunter 2y agoSure, there is a greater incentive now to depart the dollar system. But that would be a monumental shift and the path to that goal is a nightmare with all kinds of challenges. Rewiring the entire system would take a decade or more.
- kavalg 2y agoThe last time trading oil with other currencies was on the table, a couple of dictators lost their heads.
- Palmik 2y agoPerfect time to accelerate de-dollarization!