Mundell Says ECB Tolerating Euro Gains Worsened Debt Crisis

The European Central Bank worsened the crisis in the region’s most indebted nations by tolerating the euro’s appreciation against the dollar, according to Nobel-prize winning economist Robert Mundell.

Europe’s policy makers “missed a big opportunity” to do a deal with the Federal Reserve that would have enabled them to stop the currency from strengthening as the U.S. central bank bought debt to boost the economy, Mundell said in a Bloomberg Television interview with Sara Eisen. The euro’s advance was a “devastating thing to happen” for the region’s weaker economies and Europe should consider its own form of asset purchases, which tend to weaken the exchange rate, he said.