The relatively weak exchange rate of the euro has naturally favoured European exports, but that is a short-term advantage, because an economy’s competitiveness needs to be based on factors other than a weak currency. Furthermore, it has increased the cost of our imports. We have realised that as oil prices have risen, so that is a factor which can push up inflation.
And if the exchange rate continues to weaken, that could in the long run impair savers’ confidence in this new currency, both in Europe and beyond. There was a time when one dollar cost over 3 marks and so the mark has been weaker against the dollar than the euro. And at that time no one ever viewed the mark as a bad currency.