Once the European Central Bank began collecting assets in earnest at the beginning of 2015 the euro, already weak, dropped to its lowest level in more than a decade. Since then it has barely stirred.
German opposition to the ECB quantitative easing program was led at the time by the Bundesbank and backed by Chancellor Merkel's government even though Germany’s export economy stood to benefit from the falling euro.
Two years of ECB asset purchases succeeded in driving a large swath of European sovereign interest rates below zero. Historically low interest rates did not, however, revive the euro zone economy.
In an interview over the weekend German Finance Minister Schauble said that “When ECB Chief Mario Draghi embarked on the expansive monetary policy, I told him he would drive up Germany's export surplus."
In the Greek debt crisis Germany insisted on a difficult austerity program that put debt repayment far ahead of economic development. It was popular in Germany, detested in Greece and noted by the rest of Europe.
But that was before last year's British vote to leave the European Union and the election of Donald Trump, and this year's strong polling by anti-EU candidates in Holland, France and Italy.
Suddenly European comity is fashionable. Gone is the concern for financial discipline that characterized the long running and punishing Greek debt crisis. "The ECB must make policy that works for Europeans as a whole," Mr. Schauble said in the interview with Tagesspiegel, "It is too loose for Germany." "The euro exchange rate is, strictly speaking, too low for the German economy's competitive position."
With the ECB's main refinancing rate at zero and the bank buying 60 billion euros a month of continental debt, the Finance Minister did not explain how higher interest rates and a more expensive euro would help the economies of Italy, Spain, France, Portugal, Greece and rest of the euro zone when the loosest monetary policy in history has not.
The insistence on fiscal rectitude for Greece was supposed to be example and a warning for the nations of the euro zone. It was meant to reinforce the currency union.. In reality it probably accomplished the opposite, making the members of the monetary union warier than ever of a German led euro zone.
Is Germany making a similar mistake now?
A stronger euro may alleviate a potential German trade dispute with the U.S., whose representative Peter Navarro has called the euro "grossly undervalued." It might be good for Germany's non-EMU foreign relations. The efficient, productive Germany economy can weather a substantially higher currency.
But what will it do for Italy, France, Greece and the rest of the zone except bolster the case of the euro skeptics?
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ECB Assets vs Euro/Usd