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It’s now currency war

As rightly pointed out by the International Monetary Fund chief Dominique Strauss, currency is being used as a weapon to browbeat adversaries, and look for quick-fix solutions in balancing trade and growth prospects. Though shielded under the garb of sovereignty, this move is likely to offset measures that are collectively being made to pull the ailing economy out of stagnation and crisis. This competitive devaluation by advanced countries has become an unresolved riddle in real politicks for quite some time, and has badly hampered prospects of collectivity and consensus across the board. The US-China row is just a case in point, as other emerging economies’ including South Korea, Brazil, Mexico, India and South Africa, do not trail back, and are seen contemplating ways and means to beef up their coffers by tapping money-minting opportunities.

As if this discord has not been enough, a new crisis is in the making in the heartland of Europe, as eurozone’s debt problems mount. The bloc’s economic stability is up in the air, as countless austerity measures and bailout packages are yet to click. Now the question before each of the respective government of the 27-member European Union is whether they can manage their debt without help from the EU and other external sources or not. With Greece still in shivers, the economic disparity across the region is posing as an irresistible challenge. This is irrespective of the fact that Germany, France and Britain are showing up aptly on the growth ladder, but seem to have little or no remedy to offer for other club members trapped in debt-servicing and lack of trade competiveness.

The pestering fiat disorder is in need of a coherent strategy. Coming close on the heels of recession, which had plunged the world economy to the brink of disaster, it cannot be allowed to go scot-free under any pretext. World leaders who had been brainstorming for regulations and reforms in the monetary organisations have an immediate task to handle on their local front. Let their currency be valued and traded on the benchmarks of growth and competitiveness. Any measure of artificial protectionism will be suicidal for all and sundry.