“I’m not worried about a strong euro. I love a strong euro” – Peer Steinbrück, German finance minister, last week.

Falling in love with a strong currency is not unusual for a German finance minister. I would expect Peer Steinbrück’s fling to be nasty, brutish and short. Since his statement last week, the euro’s exchange rate has risen even further. If the euro continues to appreciate, Germany in particular will suffer from a sustained exchange-rate overshoot, as its economy remains as dependent as ever on a successful export sector. Even though the Germans have a slightly higher exchange-rate pain threshold than the French, we are nevertheless not too far away from that threshold.