The EU has decided it arbitrarily needs to protect the value of the euro. Specifically:
We now see herd behavior in the markets that are really pack behavior, wolfpack behavior
My question as a New Zealander who has experience the vicious swings in currency myself – why protect the value of the euro? The euro is falling to help buffer the painful adjustment Europe is about to go through given their banking crisis, and they want to waste money trying to prevent this? I don’t understand. Note: Krugman seems to feel a similar way.