Euro Takes A Beating After French Vote

Looks like all those Americans who'd like to take a cheap European vacation just might get their wish:

The euro fell more than one percent to its weakest level against the dollar in seven months on Tuesday after France's rejection of the European Union constitution sparked worries about reform prospects in Europe.

Analysts say the euro zone needs deep reforms because of its anemic growth and low confidence, but the French vote underscored voters' distrust of a reform drive that could limit social protection.

In response, French President Jacques Chirac named Dominique de Villepin as the new prime minister, following a government reshuffle in the wake of Sunday's referendum. Villepin was seen as a Chirac loyalist who is unlikely to reintroduce reforms.

I don't think things will get better with the new prime minister. If you remember, ole Dom de Villepin was the snooty Frenchman who led the fight against the US in the UN during the runup to the Iraq war. He was almost single-handedly responsible for "freedom fries" and "freedom toast", which for a brief time even made it on the menu of Air Force One (until some humorless State Department type made them change it).

The Dutch vote on the EU constitution on Wednesday, and right now it appears that they will reject it as well. The French vote may give some of the Dutch cold feet (who wouldn't get cold feet in wooden shoes!), so the rejection could be even larger than the 55-45 margin in France. If they reject it as well, the EU will be severely damaged and the Euro could continue to slide. If that continues, look out Europe, the Yanks are coming!

By the way, for those of you not familiar with the European languages, "EU" is pronounced "Eeeyyyyyeeewww", just as if you stepped in something disgusting.