How does euro have such strong value vs other currencies, while having an inside market that sucks in comparison to like asia or the us?


I literally need to import everything

I dont understand how does euro have such value, when every product is some chinese oem/odm or anyway asian

In: 0

1) Most modern developed economies are service and knowledge based. The costs are predominantly paid out in wages and salaries. (generally > 60%)

2) The EU (except for the COVID and Ukraine situation) generally runs a positive trade balance. In the first quarter of 2023, it exported around 600bn and imported just about the same amount.

3) The total GDP for the EU region is about 17.2 trillion or about 4.3 trillion a quarter or in other words 4,300 billion a quarter. So imports and exports are the minority of EU’s economy.

4) The EU leads in aspects of pharmaceutical, high end manufacturing tools/equipment, lifestyle and luxury goods, financial products, insurance, shipping and many others. The EU is also mostly self sufficient in food production. The key weakness is probably energy and, to a certain extent, semiconductors.

5) Indeed Asia (China especially) has been the hub of low/mid end assembly products (with a significant IP from the EU). So if you consider only consumer electronics etc then you are likely getting a non-representative idea of the EU’s economy.

6) Viewed as a single economic entity, the EU’s GDP is a bit but not much smaller than China’s. (Won’t go into the speculation that China’s GDP stats are likely to be slightly inflated AND skewed because of real estate) Overall the EU is a very productive economic entity with high incomes and stable legal and financial systems. It also scores well in terms of education, social welfare and other non-financial human development metrics making it a fairly sought after place for migration.

All of this and more are the reasons why the currency is relatively stable and strong.

It is backed by the largest trading bloc in the world, made up of a collection of stable democratic countries, those don’t tend to do anything that will drastically devalue their currency unlike for instance china which has been accused of purposefully doing so. Add to that that you need Euros to interect with a market with a gdp of 17.18 trillion usd