To do so would hurt the euro, says French budget minister Woerth. It would also undermine the Frnco-German relationship, he says. He better mean it.
In the past, European governments would pursue inflationary policies to devalue the debt accumulated by the government. This would lead to currency devaluations and general intra-European chaos every few years. Germany, of course, would not play along, so the deutsche mark would strengthen against the likes of the French Franc, the Lira and the Peseta…
The Stability and growth pact, discussed earlier, keeps that from happening, though clearly the pact is not being adhered to in these trying times.God help the euro if they go that route again.
