Swiss Franc Decision Should Be a Lesson for Euro Critics

European economies, strong and weak, have their doubts about the continent’s common currency. Strong exporters like Germany are weary of bailing out spendthrifts, and spenders like Italy and Greece resent austerity measures imposed on them by their euro partners. Developing rescue packages is an ongoing challenge. But like it or not, Europe realized Tuesday that the euro and other European currencies are inextricably connected, as Switzerland pegged its overvalued Swiss franc to the euro. The Swiss National Bank announced it was prepared to buy foreign currency to lower the franc’s value and spur the economy. “The franc's rise in value is a direct result of loss of confidence in the euro and the dollar in recent months,” reports an article in Spiegel Online. “In a world of globalized finances, there are no islands of bliss,” concluded another article in Financial Times Deutschland. Countries that rely on exports like Switzerland and Germany cannot afford separate, free-floating currencies that skyrocket in value. – YaleGlobal