the behaviour of European government bonds and the euro over the past month suggests the bloc may well be assuming some of the “exorbitant privilege” the United States has enjoyed for decades as a perceived safe haven and owner of the sole reserve currency.
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Eurozone (and UK) always had high levels of privilege. EUR/USD is the most traded and liquid currency pair.
Many third world countries suffered from currency crises in 2022 but Europe only saw slightly higher inflation, that comes from the privilege.
But never at level of the US, which can run on absurd levels of debt without running out of funding. The Eurozone sovereign debt crisis of 2009 wouldn’t have happened if the EU had the same exorbitant privilege the US does.
