Germany will say auf wiedersehen to euro

first_img NEXT year will see the first member of the single currency starting to talk seriously about leaving the Eurozone. That country will be the nation with the strongest and the most dynamic economy in Europe. That country will be Germany.The survival of the euro is no longer up for debate. If 2010 has proved anything it is that the productivity divide between core and periphery is too great to be spanned by a single currency. The only real question is how does the breakdown happen and which countries Berlin is prepared to take with it?Labelling countries “winners” and “losers” in this process would though be a mistake. Germany may initially look like a “winner” but there will be considerable pain for the country’s exporters as its new/old currency appreciates rapidly. On the other hand, a country like Ireland will feel much better about its prospects once the pain of separation has passed. Though it must be admitted that the actual breakdown will not be an easy process. Every country in the region has the bulk of its debts in euros. Consequently, for many nations there will need to be a debt restructuring. This will not be a pleasant experience for debtors or creditors, though many are increasingly aware that it is on the horizon. GERMAN DEPARTURE HAS BENEFITSOnce this episode is over, almost everybody will be much happier. The Germans will no longer have to grind their teeth about bailing out the rest of Europe and the rest of Europe will find that growth is now possible with a more competitive currency. Indeed, many countries might be in for a period of strong growth and improved employment similar to that seen when the UK left the European exchange rate mechanism.It must be noted that it’s likely that the euro won’t break down fully. There will remain a group of countries that are close enough economically to remain linked. This is the group of nations, with Germany as the hegemonic power, which from the outset should have pursued integration but critically should also have been brave enough to say “no” to those that did not measure up. In the end they were doing nobody any favours by allowing countries to fudge their entry criteria.The only problem that lies in the way of this rational outcome is that much of Europe is currently burdened by a political elite that can’t admit that it was wrong. There seems to be no desire amongst these politicians to recognise that a single currency was a mistake for many nations and that it’s time to find an exit strategy. The people of Europe need better leadership and they need it now.Guy Johnson co-anchors European Closing Bell weekdays on CNBC Share whatsapp More From Our Partners Astounding Fossil Discovery in California After Man Looks Closelygoodnewsnetwork.orgFlorida woman allegedly crashes children’s birthday party, rapes teennypost.comNative American Tribe Gets Back Sacred Island Taken 160 Years Agogoodnewsnetwork.orgA ProPublica investigation has caused outrage in the U.S. this weekvaluewalk.comBrave 7-Year-old Boy Swims an Hour to Rescue His Dad and Little Sistergoodnewsnetwork.orgKiller drone ‘hunted down a human target’ without being told tonypost.comPolice Capture Elusive Tiger Poacher After 20 Years of Pursuing the Huntergoodnewsnetwork.orgRussell Wilson, AOC among many voicing support for Naomi Osakacbsnews.comPuffer fish snaps a selfie with lucky divernypost.com whatsapp Tags: NULL KCS-content Germany will say auf wiedersehen to euro Show Comments ▼ Sunday 28 November 2010 7:56 pm by Taboolaby TaboolaSponsored LinksSponsored LinksPromoted LinksPromoted LinksYou May LikeMisterStoryWoman Files For Divorce After Seeing This Photo – Can You See Why?MisterStoryTotal PastThe Ingenious Reason There Are No Mosquitoes At Disney WorldTotal PastMoneyPailShe Was Famous, Now She Works In {State}MoneyPailPeople TodayNewborn’s Strange Behavior Troubles Mom, 40 Years Later She Finds The Reason Behind ItPeople TodaySerendipity TimesInside Coco Chanel’s Eerily Abandoned Mansion Frozen In TimeSerendipity TimesNoteabley25 Funny Notes Written By StrangersNoteableyMagellan TimesThis Is Why The Roy Rogers Museum Has Been Closed For GoodMagellan TimesZen HeraldNASA’s Voyager 2 Has Entered Deep Space – And It Brought Scientists To Their KneesZen HeraldElite HeraldExperts Discover Girl Born From Two Different SpeciesElite Heraldlast_img

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