AP Photo

The last few days have reminded me of the speculative attacks on sterling and the Italian lira in September 1992. Europe’s finance ministers and central bankers at the time reacted with anger and incomprehension. Sterling’s central parity in the exchange rate mechanism was as unsustainable then as Greek public finances or Spanish wages are today. Today’s financial markets correctly perceive the eurozone as not addressing the imbalances. They are confused by shifting signals from Germany and France about a bail-out. Investors...