Why did the Council of Ministers fail to punish Germany and France?
The euro has done an extraordinary job in penetrating every major central bank’s currency reserve position around the world. It has done an extrordinary job in rising against the dollar, all the way from its low-point in 2000, back up to its original launching point, and beyond – and that in spite of lagging EU area growth. This success came at a high cost, though. During these last two quarters’ phenomenal ascent against the dollar, the US has been able to engineer an incredible “second bubble” stock market rally by injecting unprecedented amounts of liquidity into the system, all the while the dollar was dropping against the euro. This has helped US exports, has severely undercut Europe’s ability to export to other countries, and has contributed to Germany falling into, or getting very close to, a recession this year. The Europeans saw they could not keep this up any longer. Germany is only now coming out of its recession. It was able to do so only as a result of the very deficit spe
