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Eropean Policy Questions


It makes no sense to me why Europe is insisting on a strong euro and high interest rates, for fear of inflation, given the weakness in European periphery and the sovereign debt crisis. A strong euro and high interest rates may be beneficial to some robust economies of the north, but it has a significant negative impact. I understand that northern countries want to maintain the value of their accumulated wealth, but the strong dollar is affecting exports and the high interest rates are affecting investment, consumption and the chances of a recovery. Can’t the Europen leaders and the ECB comprehend why the US is doing the exact opposite?

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