Final Word from Wednesday, July 30, 2014

German industry reversed itself in recent days and began supporting sector sanctions against Russia. The implications for German manufacturers are huge, and cutting costs is one of the obvious responses. Into the fray at the same time, almost as if by coincidence, came talk of another devaluation of the Czech crown. ČMKOS labor leader Josef Středula got whiff of the possibility and proclaimed that a move toward Kč 28/euro, meaning a depreciation of about another 2%, would be bad for Czech workers. This must have stung over on Příkopy, because the Czech National Bank had touted the currency manipulation on Nov. 7 as being good for the citizenry. Another Czech devaluation would instead be good for Germans who rely on cheap Czech labor. If the CNB acted now, just as sanctions were beginning to bite, it would lead credence to speculation that helping the Germans was also one of the goals of the earlier devaluation. [Czech Republic central bank monetary policy Germany]

Glossary of difficult words

the fray - a situation of intense activity, typically one incorporating an element of aggression or competition; 

to get/catch (a) whiff of something - to hear or gain information about something; 

to sting - to hurt or upset someone; 

Příkopy/Na příkopě - the street in Prague where the Czech National Bank has its headquarters; 

to tout - to promote something by praising the merits of it; 

to bite - to take effect with unpleasant consequences; 

credence - credibility.


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