LONDON -- Many commentators seem genuinely surprised at the miserable performance of the euro. How, they ask, can it be that the new currency for most of Western Europe, which was billed to be the rival of the dollar and the world's alternative reserve currency, is now trading against the dollar at 25 percent below its issue value? Against the yen, the story is roughly the same and only a little better against the British pound. What has gone wrong?
The puzzle seems all the deeper in light of reports of strong European economic growth and -- not surprisingly -- booming exports. The euro zone, so the numbers suggest, is really picking up after years of stagnation, with Internet use spreading fast through both consumer and business chains, with major rationalizing of industries, increasing cross-border mergers and acquisitions and real evidence of business dynamism throughout Europe generally.
This extends not just to existing EU members but to the applicant states like Poland, Hungary and Estonia in Central Europe, as well as to the Scandinavian countries, where Norway (not in the European Union) being the most wired state on the European landmass, and Finland is just behind.