The euro has appreciated sharply since July 2012. CEPR Policy Insight 70 argues that the strong euro is not the result of a ‘currency war’. The Eurozone suffers from an overly restrictive monetary policy. The sooner the ECB adopts a more aggressive monetary stance, the sooner the recovery will take hold. Easier Eurozone monetary conditions will lead to a temporarily depreciated Euro, which will support aggregate economic activity and help inflation stay close to 2%.