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Germany to leave Euro
Comments
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Loughton_Monkey wrote: »... but surely all you're doing is arguing that the huge cost to Germany of propping up the Euro is slightly smaller than the cost of a 10% shrinkage in their economy..
10% in the first year alone.
I've seen reports elsewhere that indicate the total loss could be as much as 25% of GDP.
Little short of economic Armageddon.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
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Which "artificially weak currency" would that be ?
The EUR is still significantly stronger today than it has been for most of it's existence.
That's such an obfuscation it's bordering on being a "Thrugism".
The issue is not the Euro's current position against other currencies, but rather the relative position of where the Euro is today versus where the DM would be today if Germany left.
There can be no doubt Germany has benefited immensely from being in a currency union with economically weaker countries which have kept the value of the Euro down, allowing Germany a favourable position in extra-EZ trade.
That same currency union has also allowed for a benefit in intra-EZ trade, by preventing German currency appreciation, and so allowing for enhanced capital flows from the periphery to the centre for the last decade.
Without those two wholly artificial advantages, Germany is as stuffed as the rest of them.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
....and Germany was economically crippled by their strong currency for years before the EUR.
The poor man of Europe suddenly leapt to life once they had the artificially weak EUR to prop them up.'In nature, there are neither rewards nor punishments - there are Consequences.'0 -
....and Germany was economically crippled by their strong currency for years before the EUR.
The poor man of Europe suddenly leapt to life once they had the artificially weak EUR to prop them up.
The benefits of the euro go right back to the fixing of national exchange rates with the launch of monetary union on January 1 1999. Thanks to the euro, German exports to its core markets have been unhindered by exchange rate fluctuations for more than a decade and have flourished as a result, ensuring huge trade surpluses with its neighbours.
http://www.thenational.ae/business/germany-should-be-glad-the-euro-leaves-its-mark“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
You mean, like the rich U.S. states are so much worse off because they have to prop up the poor states?Graham_Devon wrote: »Be worse off under their own currency, or be far FAR worse off later down the line, propping up half of the Euro.
(Unless just possibly they got rich by selling to the poor states.)"It will take, five, 10, 15 years to get back to where we need to be. But it's no longer the individual banks that are in the wrong, it's the banking industry as a whole." - Steven Cooper, head of personal and business banking at Barclays, talking to Martin Lewis0 -
Two questions.
Q1. What will it take to save the euro with Germany in it?
Q2. What will it take to save the euro without Germany in it?
Q1 may well be unanswerable - especially without a serious change of attitude in Germany, and that's probably the least likely thing to happen.
Q2 would be a new ball game and there may be a chance."It will take, five, 10, 15 years to get back to where we need to be. But it's no longer the individual banks that are in the wrong, it's the banking industry as a whole." - Steven Cooper, head of personal and business banking at Barclays, talking to Martin Lewis0 -
A useful insight - a sort of reverse Dutch disease. Part of the reason UK manufacturing fared so badly in the 80's was that N Sea oil hugely boosted the strength of GBP, who knows what would have happened to UK manufacturing had we been irrecocably locked to weaker European crrencies at that time, it is an interesting 'what-if'...
No doubt if the German's think they have no option but to support the other EUR countries they would be wise to do there best not to trumpet this in any 'negotiations', in a high stakes poker game showing your cards to the other players before the betting starts is generally not the best strategy but notice the Greeks have all along played the 'kick us out if you think you are hard enough' card and despite the threats, no one has called their bluff yet.....and Germany was economically crippled by their strong currency for years before the EUR.
The poor man of Europe suddenly leapt to life once they had the artificially weak EUR to prop them up.I think....0 -
HAMISH_MCTAVISH wrote: »Not according to the German Finance Ministry.
According to their [the German Finance Ministry's] scenarios, in the first year alone following a euro collapse, the German economy would shrink by up to 10 percent and the ranks of the unemployed would swell to more than 5 million people.
http://www.spiegel.de/spiegel/vorab/zusammenbruch-des-euro-katastrophale-folgen-fuer-deutsche-wirtschaft-a-840554.html
You should probably mention that to them Graham, as the German government seems to think the exact opposite.
The officials were so horrified by their conclusions that they kept all of their analyses confidential, for fear that the costs of rescuing the euro could spin out of control. “Compared to such scenarios, a rescue, no matter how expensive it is, seems to be the lesser evil,” says one Finance Ministry official.
http://www.spiegel.de/spiegel/vorab/zusammenbruch-des-euro-katastrophale-folgen-fuer-deutsche-wirtschaft-a-840554.html
To put that into perspective, our recent recession was the deepest in UK history, and we only lost 6% of GDP.
For Germany to lose 10% in just the first year alone, plus more in additional years, is little short of catastrophic.
Come on Hamish, we all know how inaccurate economic predictions are all the time.
Germany would cope leaving the Euro I'm sure.
And anyway, if they didn't ever think of a get out option[STRIKE] if [/STRIKE] when the Euro goes t*ts up then more fool them.0
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