WASHINGTON — As the uncertainty of the recent German parliamentary elections take hold, the value of the euro currency dropped.
Reuters reported that the drop in the value of the euro, which is the main currency of the euro zone (or the European Union countries that use it as their common fiat currency), is because Angela Merkel’s party was unable to win an outright majority in Sunday’s election.
Now, Merkel’s party has to form a coalition with smaller parties or even her leftist allies to run the country. If she does not do so, law dictates that the runner-up party will have a chance to form a leading coalition for the government (which has not happened in Germany as of late).
The euro zone has faced intense scrutiny after several of euro zone countries have fallen prey to overwhelming pension costs, soaring unemployment and rampant debt: Greece, Cyprus, Italy, Spain, Portugal, Ireland to name a few.