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In 1999 a Euro was worth 71p. Between 2000 and 2002 it was around 60p. From 2003 to 2008 it fluctuated around 65-70p, just a bit below its first issue price.

From 2008 the Euro took off against a falling pound, going above 90p. Since March 10th 2010 the Euro has been in freefall, and has devalued by 8% against sterling.

The Uk devaluation by more than 20% was helpful to UK competitiveness. By the same argument the recent 8% devaluation of the Euro has blunted that advantage.

The Euro was a scheme designed to let Germany export her manufactures to the Euroland area countries at a fixed exchange rate. The other members either had to improve their productivity and control their costs, or live with a perpetual German balance of payments surplus. When the Credit Crunch hit Germany suffered badly, as many countries in Euroland and beyond reined in their purchases of German product, leading to a sharp fall in German output. This reminded the Germans that their manufacturing superiority was a weakness as well as a strength, as it left them vulnerable to larger swings in output and employment given their heavy reliance on exports.

The German government decided to cushion the blow by introducing the Kurzarbiet scheme. This scheme allowed companies to keep employees on who were temporarily surplus to requirements, with the state picking up a large amount of the bill. At one point around 1.5million workers were covered by this scheme. The German government has just decided to continue with it into 2012, even though the economy is now in recovery phase.

The costs of this scheme are part of the cause of the German budget deficit, and further background to why Germany is reluctant to pick up the bills for other countries around Euroland who have had to lay off people in the name of curbing costs and trying to compete with Germany. Earlier this year when the Euro was high against the ppound it was generally quite high, making it even more difficult for the weaker Euroland economies to export their way to prosperity.

Germany has her own keepwork or work share scheme to deal with troubled times, but the rets of Euroland still lacks such a comprehensive scheme. The price of a relatively high Euro, and of German competitiveness, is the high and rising rates of unemployment in Ireland. Spain, Portugal and Greece.