Europe's Common Crisis: Money

Under speculators' attack, the E.C. fails to hold its currencies together

WITH THE SPECTACLE OF SEEMING CHAOS IN ITS currency markets, Western Europe is giving the rest of the world a vivid lesson in the connection between economics and politics. Eleven of the 12 European Community states have been trying to keep the value of their money linked together while pursuing divergent domestic policies and grappling with distinct national problems. Inevitably, these internal stresses -- aggravated by well-heeled speculators -- broke the E.C.'s system of guaranteed exchange rates, forcing Britain and Italy to drop out.

Some sort of currency crack-up had seemed likely for months -- especially to the speculators. Germany's high...

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