A potential exit of Great Britain from the European Union (Brexit) could affect the exchange rate of the sterling, according to a poll made by Bloomberg, which shows that the currency of this country could drop to 1.35 dollars or even lower, within a week from the vote to leave the EU. Such a level has never been reached since 1985. The Bloomberg analysis was conducted on a sample of 34 economists, and 29 of them anticipate the aforementioned evolution. Also, 23 of the polled economists think that the pound will not recover from the 1.35 level earlier than three months after the Brits' vote on the EU exit, scheduled for June 23rd. Seven of the polled specialists think that the British currency will drop below 1.20 dollars immediately after a vote in favor of the Brexit.   The pound has already lost over 2% in 2016, compared to the currencies of the G10 countries (the Group of the ten most developed countries in the world), as the unequal economic recovery and the increasingly weaker outlook for the hike of the policy rate join the fears of a possible exit of Great Britain from the EU. The depreciation is increasingly pronounced after prime-minister David Cameron announced on Saturday the date of the referendum and some politicians decided to launch campaigns for leaving the EU. "A Brexit vote will affect the pound sterling heavily", said Nick Kounis, head of the macroeconomic research division of "ABN Amro Bank" NV of Amsterdam.   He predicts the pound sterling going below 1.20 dollars a week after a potential vote in favor of the Brexit.  Peter Dixon, an economist with "Commerzbank" AG, the London branch, predicts that the pound sterling will fall to 1.25-1.30 dollars a week after a potential vote in favor of the Brexit.

A recession in Europe could lead to the collapse of the Eurozone, as the single currency would buckle under the political turmoil unleashed by a fresh downturn, a leading investment bank has warned.  In a research note titled "Close to the edge", economists at Swiss bank Credit Suisse warned the fate of monetary union hangs in the balance if Europe's policymakers are unable to ward off another global slump and quell anti-euro populism.  "The viability of the euro is contingent on the current recovery," said Peter Foley at Credit Suisse.  "If the euro area were to relapse back into recession, it is not clear it would endure."  Although the bloc's nascent recovery was likely to persist in the coming months, Credit Suisse said there were worrying signs of deterioration emanating from Europe's economies. These include heightened credit stress in the banking sector and market volatility.    Benoit Cœuré , executive board member at the ECB, said the central bank's policy stance could not "become a source of uncertainty" for expectant markets. "In the still fragile environment we face today, what is essential is that policy works to reduce uncertainty," Mr Cœuré  said on Wednesday.  He admitted that the ECB's move into negative interest rates could have adverse effects on the continent's lenders, hinting policymakers would mitigate the impact of its -0.3pc deposit rate on bank profitability. "We are well aware of this issue. We are monitoring it on a regular basis and we are studying carefully the schemes used in other jurisdictions to mitigate possible adverse consequences for the bank lending channel," said Mr Cœuré .

MEPs can claim £120,000 a year in expenses without providing “real proof" of how the money is spent, because EU officials don't want to saddle them with an "administrative burden" which would hamper their freedom, a court heard. EU expenses chief Frank Antoine-Poirel said that only on “very limited occasions” would MEPs be asked for “real proof” of where MEPs allowances ended up. Mr Antoine-Poirel, head of the EU’s Parliamentary Assistance and Members' General Expenditure Unit, admitted he had never seen the bank accounts of long-serving Labour MEP Peter Skinner, who is accused of using his expenses to pay £10,000 to his ex-wife. Skinner, 56, is also alleged to have used some of the cash to repair the gearbox on his ex-wife Julie Skinner's Land Rover Discovery and funded hotel stays, restaurants and jewellery by claiming a maximum £480,000 for support staff over five years. One member of staff, Karen Forbes, was said to have invoiced the former MEP for the South East of England Region, for more than £122,000 in 2005, but worked at Tesco and was actually paid just £525 a month, Southwark Crown Court has heard. Mr Antoine-Poirel, a parliamentary ombudsman tasked with establishing the difference between genuine mistakes and misuse of funds, said: "It would create an administrative burden for members and the consequences on the freedom of actions for the members so we do not want to interfere with their detailed political activities.”

The banks in the Eurozone have done very well in an environment where interest rates are very low, says Benoit Coeure, a member on the board of the European Central Bank (ECB), who adds that their new issues are not caused by the easing of monetary policies.  In his opinion, banks' earnings are low, which diminishes their ability to generate capital, but many of these financial institutions have overcome the impact of the negative interest rates imposed by the Central Bank.  Benoit Coeure also says that the ECB is engaged in ensuring price stability, which sustains bank profitability.  The ECB official said yesterday, in Frankfurt: "Many banks have succeeded in compensating the drop in revenue interest through higher lending volumes, lower interest expenditures, the drop in risk provisions and capital gains".  Coeure's statements seem however seem to minimize the arguments that banks' major problems are caused by non-performing loans, which have nothing to do with the monetary policy. 

"Europe is on the cusp of a largely self-induced humanitarian crisis," UN refugee agency (UNHCR) spokesman Adrian Edwards said on Tuesday. The EU plan for an internal aid mechanism marks a departure for the 28-nation EU, which normally only gives aid to countries outside the bloc, notably in the Middle East and Africa. The EU has an annual aid budget of €1.2 billion for external countries. But the apparent show of European solidarity masks growing criticism of countries that have capped the number of migrants they are willing to let in. European leaders are divided ahead of two summits this month on the migration crisis, with German chancellor Angela Merkel saying that after bailing out debt-hit Greece the country cannot now be allowed to plunge into "chaos". The crisis has also sparked warnings that the EU's Schengen passport-free zone could melt down as more and more states bring back border controls. In a bid to ease the divisions, EU president Donald Tusk is currently touring the Balkan states and Turkey, the main departure point for refugees. Ahead of a crucial EU-Turkey summit on March 7, Mr Tusk said he would press for "a more intensive engagement" from Ankara on a deal signed with the EU in November to limit the flow of refugees.

The crises of mass migration and Greek debt have hit the European Union like an “an out-of-control bulldozer”, forcing its leaders to rethink David Cameron’s call for fundamental reform, the cabinet’s leading Eurosceptic has said.  Iain Duncan Smith, speaking to the Guardian before a Conservative party conference that will see disputes over Cameron’s EU referendum tactics, said the twin crises had changed the debate.  The work and pensions secretary said: “We are getting a better hearing because people are waking up to these things. It is suddenly becoming clear that actually you cannot paper over the cracks and say ‘it’s alright, it’s only the British.’ We still have the crisis over the euro and Greece, and then the rows over Schengen border controls are like nothing I have ever seen. It is massive.”   The two crises had sent “shock waves everywhere”, he said. “Nothing is the same after this thing. The European Union has just been hit by an out-of-control bulldozer that has just gone straight through the middle of them.”

The British pound  saw the biggest decline against the dollar since March 2009, after London mayor Boris Johnson, one of the most popular politicians in the country, said he would start a campaign in favor of the United Kingdom leaving the European Union (Brexit) in the referendum scheduled in June. The pound lost 1.7% at 12:01, on the New York market, to 1.4156 dollars. The pound had earlier lost 1.9% - its biggest decline since March 9th, 2009. All throughout yesterday, the pound fell to 1.4058 dollars - the weakest exchange rate since March 18th, 2009. The British currency weakened against all major currencies yesterday, after having gained significantly at the end of last week. Valentin Marinov, a strategist with "Credit Agricole" SA, states, according to Bloomberg: "The pound is dropping because the agreement achieved by British PM David Cameron in the EU summit (ed. note: - Friday) has not removed the fears concerning a Brexit. The fact that prominent members of the Conservative Party have announced that they are going to be campaigning for Britain's exit from the EU has increased investors' worries over such a possibility". Since the beginning of the year, the pound has lost 4.1%. On Friday night, David Cameron has achieved a special agreement that grants the United Kingdom "a special status in the European Union", but has announced that he has not abandoned the idea of a referendum concerning the United Kingdom's exit from the EU, and set the date of the poll to June 23rd.