Eu economic commissioner Almuna has been watching his Bloomberg, noting exchange rate volatility has increased. He also says the euro has protected “us”, presumably the eurozone.
There is no doubt about that later point. In a crisis as deep as the one we are in now, some of the legacy currencies like the lira, drachma and peseta would have gone the way of the Icelandic Krone. Bond spreads blew out between less credit-worthy EU members and Germany but that alone did not result in currency crises like the ones that cropped up on a yearly basis in the early-1990s.
Currency devaluations as a result of those crises helped keep European economies competitive with one another. Now that currencies no longer act as a relief valve, manufacturing is concentrated in Germany where it is most efficient and leaving less productive eurozone economies as tourist destinations for increasingly wealthy Germans.
