@Walter Hinteler,
Quote:Germany doesn't have an own currency.
It's almost painful, the level of ignorance you display on this thread, Walter.
https://www.forbes.com/sites/miltonezrati/2018/01/23/the-german-swindle-built-into-the-euro/?sh=34d4f0bb27da
The German economy, most especially the German elite, has done very well for itself because of the union and the euro, not a little of it at the expense of the rest of Europe. One need not be a cynic to suspect that such less principled but nonetheless compelling motivations also direct Berlin’s commitment.
The euro was supposed to have had a universally helpful impact on all of Europe. Its designers claimed that it would give the EU stature to rival other powerful economies, the United States, Japan, and China in particular. All Europe would benefit, they said, from the trade increases that would follow as people and business shed worry over currency fluctuations, while the absence of currency risk would keep interest rates low, giving especially smaller, weaker members the advantage of cheaper credit that would encourage more investment and economic development. The trade and growth would deepen economic integration, give residents of the union a greater diversity of goods and services, and create a more unified and resilient European economy. It has of course not turned out this way. Instead the euro has locked in distorting and inequitable currency mispricings, giving some in the common currency, most notably Germany, great advantages over others.
These problems, in no small part, developed from the enthusiasm that accompanied the run up to the euro. High hopes for weaker economies, Greece, Spain, Portugal, and to a lesser extent Italy, bid up the values of their individual national currencies so that they joined the euro at values far above those supportable by their economic fundamentals. The overpricing gave these governments and their populations an inflated sense of their global economic purchasing power, encouraging spending and borrowing beyond their ability to support such behavior. Meanwhile, the inflated currency values put their producers at a competitive disadvantage. With separate currencies, reality would eventually have forced a depreciation that would have rectified both problems. But the euro, once established, locked in the mispricing.
For Germany, the opposite set of conditions prevailed. At the time, it was still suffering from the economic difficulties of its reunification. Its deutschemark was weaker than its economic fundamentals could otherwise have supported. Once that value was locked into the euro, German consumers acquired a deflated sense of their global buying power and so proceeded more cautiously than others in Europe. German producers meanwhile discovered that the euro had effectively locked in pricing for their goods and services well below levels with which they otherwise could have coped. International Monetary Fund (IMF) data suggests that at the euro’s inception, this currency distortion gave German industry a 6% competitive advantage compared with the country’s economic fundamentals.