The point is the Euro could not work as designed and is blowing up after encoutering its first (perhaps externally triggered) crisis.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker

They saw the build-up of "imbalances" and did nothing because "free movement of capital" prevented them from doing so.

In other words, Market fundamentalism, the belief that "the market knows best" and that intervention should be reactive and not proactive. Also possibly they believed (against all evidence from economic history and dynamical systems theory) that the "imbalances" would resolve themselves smoothly and not catastrophically.

Or they just didn't care.

Saying this

"There is nothing we can do to stop foreign exchange borrowing, and we don't even try. As members of the European Union, we have to respect the free flow of capital," he [Hamezc Istvan, director of Hungary's Central Bank] said.

in unconscionable in any case.

The absurd thing is that it all might have worked if there had been some internal capital controls to reduce massive flows of funds from the core to the periphery.

That is what floating currencies do for you.

Replacing a market system that works with a ForEx rationing board that may or may not work is... perhaps to show an excessive enthusiasm for government solutions.

- Jake

Friends come and go. Enemies accumulate.