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Economy

Euro currency marks 20th anniversary

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The single European currency will celebrate its 20th anniversary on Tuesday.

The euro was born on 1 January, 1999. The euro initially existed only as a virtual currency used in accounting and financial transactions. It became a physical reality for Europeans three years later, and its coins and notes are now used by over 340 million people in 19 European Union countries.

The currency wasn’t immediately loved, with many perceiving its arrival as an unwelcome price hike. In Germany, it was nicknamed the “teuro”, a pun on the German word for expensive.
But the ease of travelling and doing business across borders in the euro area without having to worry about foreign exchange fluctuations quickly won hearts and minds.

Today the euro is more popular than ever despite the rise of eurosceptic, populist movements in a slew of countries.

The euro is now the world’s number-two currency, though it remains some way off from challenging the dominance of the US dollar.

The euro reached a defining moment when the aftershocks of the 2008 financial crisis triggered a eurozone debt crisis that culminated in bailouts of several countries, pushing the currency union to breaking point and severely testing the club’s unity.

Experts say the turbulent time exposed the original flaws of the euro project, including the lack of fiscal solidarity through the pooling of debt, investments and therefore risks, or the lack of a lender of last resort.

“Europeans have benefited from the convenience, stability and security of the euro for 20 years. Although many citizens today have never known any other currency or have forgotten what life was like before, popular support for the common currency continues to grow,” the European Commission says on its website.

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Economy

US launches monopoly investigation into major tech companies

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The US Department of Justice has opened a broad antitrust investigation into tech giants. The department has not said which companies will be investigated specifically but it’s highly likely that Apple, Amazon, Google and Facebook will be swept up in the case.

The investigation will look into how the top tech companies such as Google, Apple, Facebook and Amazon grew in size and expanded their reach into other businesses. Officials are interested in whether the companies have “stifled innovation by thwarting competition unlawfully or otherwise harmed consumers.”

The department’s antitrust division did not name the companies but announced on Tuesday that it was reviewing market-leading “online platforms” to see how they have come to power and whether they engaged in illegal practices that reduced competition and made it difficult for smaller companies to grow.

The investigation raises the prospect that the companies could be fined, forced to change their business models, or in an extreme scenario, broken up.

The Justice Department said it had received a number of complaints against big tech companies that include allegations surrounding search, social media and retail services.

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Economy

Volvo recalls million cars over risk of fire

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Swedish carmaker Volvo is recalling more than a million vehicles worldwide because some of the components in the motor are at risk of melting, a spokesman says.

In the worst-case scenario, the problem could lead to engines catching fire, the spokesman said on Saturday. However, Volvo has not received any complaints of this happening.

According to Swedish broadcaster SVT, the problem affects models with four-cylinder diesel motors manufactured between 2014 and 2019. This includes the V40, V60, V70, S80, XC60 and XC90.

The recall is the second piece of bad news for the Chinese-owned manufacturer this week: On Thursday, Volvo reported a sharp drop in profits in the second quarter of 2019, despite a significant increase in sales.

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Economy

UK wages are growing at fastest rate since 2008

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British workers are enjoying the strongest wage growth since the financial crisis a decade ago as the labor market tightens.

Average earnings excluding bonuses continued to increase an annual 3.3 percent in the three months through November and unemployment fell to 4 percent, matching the lowest rate since 1975, the Office for National Statistics said Tuesday. Separate figures showed the budget deficit unexpectedly widened in December.

British workers are enjoying the long-awaited return of real wage increases.

With earnings forecast to accelerate further, Bank of England policy makers might normally be preparing to raise interest rates to curb inflationary pressures building in the labor market. But mounting concern that Britain could leave the European Union with no deal is expected to stay their hand. Traders put the chance of a hike this year at less than 70 percent.

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