The one-two punch is the latest in a series of efforts by corporations, central banks and individuals to move money out of crisis-stricken euro-zone countries as the debt crisis envelops an ever-larger part of the continent.
Such currency moves are bets on the future of national economies. The recent capital flight, analyst say, is a vote of no confidence in the euro that some worry could snowball into a series of silent bank runs. If institutions and consumers lose faith in the euro, a massive flight could lead to economic collapse.
“People are not frantic yet, but the concern is increasing and they are thinking, ‘How can I protect myself?’ ” said Enrico Cantarelli, a former adviser to the Italian treasury department who is a managing partner of Phinance Partners, a financial consulting firm.
Smaller firms are also reassessing their exposure. In Rome, Davide d’Atri, chief executive of Soundreef, a start-up that collects royalties on behalf of recording companies from music played in stores and other public venues, said his company’s finances could be devastated if the value of the euro were to drop further. So he has opted to keep most of the company’s cash in British pounds rather than euros. “We don’t have any control of this, and you want control of your finances,” he said.
Uneasiness about the future of the single currency has weakened the euro against nearly all the 16 counterparts in recent months. It is down about 4 percent against the U.S. dollar this year.
Capital flight has been at the root of the European financial crisis since it began more than two years ago. In the beginning, the issue was mostly a reshuffling of money within the euro zone, such as investors moving assets from smaller, troubled countries such as Ireland, Portugal and Greece into more stable euro-zone countries such as Germany.
Starting around July 2011 — when it became clear that some of the larger economies such as Spain and Italy were also in danger — the pace accelerated as investors shed a broader range of euro-zone investments.
Now money is starting to leave the euro zone altogether, said Jens Nordvig, a managing director at Nomura Securities who researchers currency and bond issues.
Nordvig said that in the past two months he has seen echoes of what happened in Mexico and Indonesia when their currencies began to collapse in the 1990s: “This is something very serious to watch, because if this type of dynamic escalates, it really will make the situation look like an emerging market currency crisis.”
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