Reasons behind the euro’s puzzling strength

Why is the euro so strong, when the eurozone’s economy is barely out of recession?

This question puzzles experts and unnerves the area’s political and business leaders.

Since September, the euro has increased its value by more than 4%, to $1.37 yesterday from $1.31. Two separate factors underlie the current, toxic mismatch between the strength of the euro and the weakness of the European economy, and both are related to dysfunctional institutions.