They have a very sordid and very unsuccessful history. The most recent attempt was ERM, which crashed and burned in August-September 1992. Prior to that, there was the post-Bretton Woods arrangement (what E-P references as a ''dirty float''), wherein there was simple chaos in forex for 2-3 years after Nixon closed the gold window.
Prior to that, there was the Sterling Bloc in the post-WW II era, whereby the UK attempted to control both Sterling flows and gold flows. It ended when (finally) some boffin figured out that it was impoverishing the nation quite steadily.
Think of government managing the Postal Service (cough), and multiply by 10,000. That's what we'll see if these losers go the route of currency controls.
I can't wait -- we nasty old forex traders will make a megaboatload on this deal.
I certainly agree on the Airbus and hedging, although that is certainly not my profession.
I have no idea about the EurIBOR (is what??), but note my comment on the Italian and German 10-year bonds. The spread took off the same day Prodi managed to get his budget through the Italian parliament (cause and effect unclear at best :-) ) and continued upwards, but the last few days it has stabilized and started to decline.
So, I think A E-P makes some very interesting points (especially for you currency traders!) but he may hyperventilate a little too much.
They never learn!